Analysis and Opinion by Diego García del Río: Verisure Plc ($VSURE)

^{*IBKR stands for Interactive Brokers, the main broker I use.}

Within the expanding universe of residential and commercial protection companies, Verisure Plc ($VSURE) emerges as a solid investment with recurrent growth profile and low relative risk. It is a company dedicated to safeguarding homes and businesses through advanced alarms and 24/7 human responsewith a broad subscriber base, robust financial position y direct access to European and Latin American markets with income potential >1,000 M EUR per segment, and also highlighting its ZeroVision™ star innovation in the prevention of theft.

Before going deeper into the analysis, I leave you with a table with current price and different valuation scenarios, defined by me, Diego García del Río, in accordance with the level of expansion of the customer basethe impact of technological innovationsthe operating and commercial efficiency from 2026 onwards, and the incremental contribution of the complementary services ecosystem in the medium and long term.

*Verisure Plc's ($VSURE) target prices are based on the expected performance of the Organic ARRthe synergy capture after the integration of ADT Mexico, the rate of geographic expansionthe operating margin trajectory, as well as in the progressive reduction of financial leverage and the transition to breakeven and net income generation from 2026 onwards.

The optimistic scenario assumes operational execution above guidance, with ARR growth >12%, frictionless integration, accelerated rollout of innovations such as ZeroVision™, credit rating upgrades and effective dividend announcement in H2 2026. The base scenario discounts an evolution aligned with the current roadmap, with stable recurring growth, gradual margin improvement and balance sheet normalization. The pessimistic scenario incorporates lower-than-expected ARR growth, high churn, delays in integrations, higher financial costs and/or an adverse macro environment that delays deleveraging and shareholder remuneration.

Verisure Plc ($VSURE)

Verisure Plc is a leading professional monitored security services company for homes and small businesses, specializing in integrated intelligent alarm solutions with 24/7 human response. It operates primarily in Europe and Latin America, offering professional installation, continuous monitoring, expert verification and rapid response, including direct contact with law enforcement, as well as protection against intrusion, burglary, fire, physical attack and life-threatening emergencies.

Its approach is based on a recurring subscription model that combines technology with active intervention, especially emphasizing ZeroVision™, a device that generates a harmless, zero-visibility fog within seconds of a verified intrusion, disorienting the intruder and proactively preventing theft. This approach turns passive security into active security, improves deterrence effectiveness and significantly reduces losses compared to traditional systems. Simply put, Verisure detects threats in real time, triggers immediate remote interventions and coordinates professional assistance, offering personalized, high-retention protection.

Founded in 1988 and currently headquartered in London, it has been listed on the Stockholm Stock Exchange since October 2025 following its IPO. At the end of Q3 2025, it had more than 5.9 million customers (more than 6 million after the acquisition in Mexico), with a portfolio growth of 8% year-on-year. Its latest revenue report showed €933 million in Q3 2025 (+9.9% in constant currency), Adjusted EBITDA of €443 million and Adjusted EBIT of €250 million, with an Adjusted EBIT margin of 26.8%. Its ARR (Annualised Recurring Revenue) reached €3,292 million, and guidance for 2025 points to ARR growth of >12% and Adjusted EBIT of €940-950 million.

The company maintains a strong post-IPO financial position, with low churn (~7.4%) and an average customer lifetime of close to 15 years. With continued expansion in key markets, leadership in 14 of 18 countries and an active innovation pipeline, Verisure is positioned to capture a growing residential/commercial security market, with recurring segment revenue potential in excess of €1 billion at maturity and expanding margins towards 30% over the long term, making it very attractive as a solid long-term position.

$VSURE - Fundamental Analysis: Recurring Revenues, Leverage and Financial Normalization

At the time of publication of this analysis, Verisure Plc is in a mature post-IPO operational phase, which highlights some high net losses mainly explained by high financial expenses arising from substantial debt, despite the fact that it maintains positive operating income and a stable recurring revenue model. Its activity is characterized by its presence in the European and Latin American markets with high retention and geographic expansion.

The company has a market capitalization of ~EUR 12,408 B, which places it as the largest company in the world in terms of market capitalization. large-cap within the security services sector, 1,292 billion, well above the average of its peers ('1,292 billion) and the sector as a whole ('89.814 billion). With a beta of ~1.24 reflects a slightly higher volatility than the market, consistent with a risk profile associated with cyclical exposure and financial leverage.

In terms of valuation, VSURE trades with a P/E ratio of -65.2x, 190.4m, reflecting net TTM losses of EUR -190.4m, clearly worse than its peers (14.8x) and the sector (12.5x). Its PEG N/A indicates indefiniteness (due to limited data) versus expected growth (revenue CAGR ~9.4%), while its P/B of 2.1x outperformed peers (1.2x) and sector (1.4x), driven by tangible asset value and subscriber base. Its P/S of 3.4x, also above peers and sector, points to a margin premium in expansion and revaluation potential conditioned to a post-2026 deleveraging.

From the operating standpoint, it generates revenues of 3,651 B EUR, 651.4 million, well above those of its peers (EUR 651.4 million), with operating income of EUR 343.6 M, 52.4 million, compared to EUR 52.4 million in the comparable group. Still, it recorded net TTM losses of EUR -190.4 million, in contrast to profits in the comparable group. This divergence is consistent with a high debt burden (EUR 8,084 B) and a strategy focused on growth through acquisitions and innovation. Projections point to a revenue CAGR of over +9.4%, 3.8%, compared to +3.8% for the same period last year, supporting a progressive improvement after financial stabilization.

The balance sheet reflects strength in scale, 16,048 B EUR in total assets and a gross profit of 1,758 B EUR, but with total debt of 8,084 B EUR (~50% of the assets), significantly higher than that of peers, but manageable thanks to recurring cash flow of the underwriting model. Although there are no specific liquidity metrics available, the recurring revenue profile provides a stable operating runway with no immediate dilution. The Projected revenue CAGR (~9.4%) reinforces the thesis of improvement after operational milestones and gradual deleveraging.

In terms of profitability, VSURE's net metrics are still negative, but the company has a solid operational base. Indicators such as the ROA and the ROIC are not very representative at this stage, as the net profit and NOPAT are penalized by the high financial leverage and for the post-IPO investment and integration phase, rather than a lack of efficiency of the underlying business. The company generates positive operating income and expanding margins, so that these metrics tend to underestimate the real economic profitability of the model, which will be more adequately reflected as the model materializes. progressive deleveraging and the capture of synergies.

In terms of potential short squeeze, based on publicly available data, does not determine a potential short interest or float shorted, it shows low levels with no current indications of upward pressure in this direction.

$VSURE - Growth Catalysts and Value Re-rating

The main events that may determine Verisure's valuation trajectory are as follows:

• Q4 2025 - Financial Results and Earnings Call (February 12, 2026)2025 fourth-quarter results release, with a focus on the organic ARR growth >10%, expanding margins (Adjusted EBIT expected from €940-950 million by 2025) and updates on the integration of ADT Mexico, which raised the customer base to more than 6 million. This event is key to confirm the ARR growth guide >12% and could exceed consensus expectations, reinforcing the visibility towards breakeven in 2026 and enabling a tactical revaluation of +10-15% by post-IPO institutional flows.

• Q1 2026 - Geographic expansion and technological innovationPossible breakthrough announcements in key markets such as France (more than 1 million customers) and Latin America following the acquisition of ADT Mexico, together with the ZeroVision™ rollout in new segments. The confirmation of low churn (~7-8%) y high lifetime value (~15 years) would reinforce the attractiveness of the subscription model and could catalyze upward revisions to the average target price (~18,73 EUR, upside ~45%), especially if you keep a revenue CAGR close to 9% per year.

• H1 2026 - Strengthening governance and possible rating upgrades: Following the recent changes in the board, with two new independent directors effective February 2026, In addition, an improvement in governance and risk perception is expected. This could lead to additional credit rating upgrades, reducing the financial cost and attracting institutional and ESG capital. The combination with the inclusion in the STOXX Europe 600 could generate passive inflows and enable a valuation rebound of +15-20% from depressed post-IPO levels.

• Mid-2026 - Full integration of acquisitions and M&A pipelineThe completion of the integration of ADT Mexico would allow the company to capture synergies >€100 million per year, accelerating growth in Latin America, with segment revenue potential > €1 billion. In addition, the market is speculating on new transactions of Selective M&A in adjacent verticals, positioning VSURE as the sector consolidatorwith a speculative upside of +30% before the announcement of a relevant deal.

• H2 2026 - Dividends and operating breakevenThe beginning of the payment of dividends (anticipated in the guidance) along with the achievement of breakeven profitability, backed by a high EPS growth y Estimated ROE ~8-9% at 3 years, would validate the recurring revenue model with target margins close to 30%. This milestone could trigger a rerating of multiples, reducing the risk premium associated with the leverage and enabling a accumulated revaluation of +25-40% towards high valuation scenarios.

• Target acquisition potential (M&A)Verisure's IPO: Following the IPO, several investment communities rank Verisure as one of the most important possible acquisition target, given its scale (~6 million customers in 18 countries) and a valuation still below IPO price (€13.25). An eventual buyout process with premium of the 30-50% would be a significant catalyst for the stock, although this scenario remains highly speculative and dependent on sectoral dynamics.

Revaluation Scenarios

In a upward scenario, considering higher financial results in Q4 2025 with ARR growth >12%, successful integration of acquisitions such as ADT Mexico, accelerated rollout of ZeroVision™ in new markets, together with credit rating upgrades and announcement of initial dividends in H2 2026the target price would be between 20-24 EURwhich implies a upside potential from +60% to +92% from current levels (~12.50 EUR). This scenario assumes low churn (<7%), robust geographic expansion in Latin America and Europe, potential strategic alliances or M&A transformer, and a ramp of margins towards >30% as of 2027. Under this framework, the market capitalization would expand towards 20,600-24,700 M EUR, reflecting a premium rating according to security companies with recurring SaaS models in a mature phase.

In a base scenario, with execution aligned to current guidance, solid but unexceptional results are expected in Q4 2025, with progress in expansion and operating efficiencies in H1 2026, together with breakeven in 2026 and strengthening governance. This case contemplates manageable post-financing debt (~8,000 M EUR), The company's strategy is to maintain low short interest and moderate expansion of multiples. The target price would be between 17-20 EUR, equivalent to a revaluation from +36% to +60%, backed by a structurally large market for security services and a constructive analytical consensus, with an estimated capitalization of 17,500-20,600 M EUR.

In a bearish scenario, conditioned by weak financial results, such as ARR growth <8%, high churn due to competitive pressure, delays in integrations beyond mid-2026 or increased financing costs due to a high interest rate environment, the price could fall back towards 8-10 EUR, involving a downside risk from -20% to -36%. This scenario would assume high opex (>€250 M per quarter), deterioration of institutional confidence, pressure on the valuation of the company and 8,200-10,300 M EUR and a deferral of the dividend roadmap until 2028 or later.

$VSURE - Technical Analysis: Technical Structure and Key Levels after the Post-IPO Correction

Following its IPO in October 2025, with an initial peak in €16,616, Verisure has experienced a significant post-IPO correction. From those levels, the stock has pulled back by 19.72% and 24.90%, a common pattern in large IPOs, where initial private investors and pre-IPO holders often engage in profit-taking. Still, signs of stabilization are beginning to appear, with mixed signals on the indicators pointing to a possible short-term rebound. As the price approaches the key support of €11,50, The selling pressure seems to be moderating in favor of a more selective accumulation, although the underlying bias remains bearish.

The daily chart reflects a horizontal trend channel in the medium term, with a bearish bias after the loss of a relevant support, which introduces a negative signal for the longer-term trading range. This context suggests a sideways or slightly declining development, with no clearly defined support levels below the recent lows.

On February 5, the stock hit a record low of €11,520, The level is relevant as liquidity swept below the psychological threshold of €12,00. Subsequent recovery, with closure in €12,104 and bullish candlestick formation suggests institutional interest defending the area, although the negative net volume indicates that the selling pressure has not yet disappeared.

The first relevant technical zone is located at €13,954, The area is in line with Fibonacci retracements of the post-IPO decline and former reference levels. A sustained overcoming of this area would open the way towards €14,90 y €15,34.

The RSI is currently moving at 41,07 after having marked oversold readings in early February. In companies with recurring revenues such as Verisure, RSI recoveries from levels below 30 have historically signaled short to medium-term technical rebounds, albeit still at an early stage, also showing a descending channel, which it broke to the upside.

During the February fall, a significant increase in volume was observed (around 48-50%), typical of capitulation episodes. Even so, the volume balance remains negative, which limits the conviction of the bullish scenario.

At current prices, the stock is trading at between a 29% and a 32% below of the average consensus ratings, which are in the range of €18,00-18,73, This maintains a favorable risk/return asymmetry if the stabilization and breakeven scenario is consolidated in 2026.

Synthesis

Verisure Plc is a large-cap residential and commercial security sector company with direct exposure to the structural growth of the professional monitored protection services, with a model based on recurring subscriptions that combines proprietary technology and human intervention 24/7. Its differential proposal is supported by an installed base of more than 6 million customers, high retention and a platform for continuous innovation, highlighting ZeroVision™ as an active deterrent that significantly increases effectiveness compared to traditional systems. As of the date of publication of this analysis, the company is at a post-IPO mature operational phase, with positive operating income and expanding margins, although it is still recording net losses mainly due to a lack of high debt structure associated with its historical strategy of growth and integration.

On a valuation level, VSURE trades with metrics distorted by this leverage, reflected in a Negative PER (-65.2x), while its multiples P/B (2.1x) y P/S (3.4x) incorporate a premium over peers that discounts scale, recurrence and geographic leadership rather than current earnings. Classic profitability metrics (ROA, ROIC) are not very informative at this stage, as they are penalized by financial expenses and the time lag between investment and integration, rather than by a weakness in the underlying business. The focus should be on the ARR growth (>12%)the recurring cash flow generation and the progressive reduction of leverage, with an operating breakeven forecast for 2026 and target margins of close to 30% long-term.

From the technical point of view, the stock has gone through a relevant post-IPO correction, with a fall close to 25-30% from highs and a stabilization process after episodes of capitulation. The area 11,50-12,00 EUR has acted as an institutional defense area, with early signs of accumulation, although the underlying structure remains fragile and dependent on confirmation. At current prices, VSURE trades ~30% below consensus (18.00-18.73 EUR), The risk-return asymmetry is favorable if the baseline scenario is consolidated.

The catalysts that will determine the trajectory of the stock are mainly concentrated in a confirmation of the organic growth of ARR, capture of synergies after the integration of ADT México, possible rating upgrades, dividend commencement in H2 2026, and an active pipeline of Selective M&A to reinforce its role as a sector consolidator. The market is currently discounting a combination of proper operational execution, gradual deleveraging and margin normalization, but is not yet assigning full value to financial optimization scenarios.

As with other recurring growth theses with high initial leverage, Verisure is not an immediate revaluation story, but rather a transition thesis. If the company fulfills its roadmap, reaches breakeven in 2026, initiates shareholder remuneration and accelerates deleveraging, the asymmetry is progressively inclined upwards, with scenarios that place the value at 17-20 EUR in base case y 20-24 EUR in optimistic scenarios 12-24 months. Conversely, poor execution, delays in integrations or a persistently high rate environment could prolong the balance sheet penalty and keep the stock in depressed ranges.

VSURE, unlike pre-commercial biotechs, does not rely on binary clinical catalysts, but rather on financial discipline, operational execution and market timing. Its valuation trajectory during 2025-2027 will be dominated by its ability to transform recurrence and scale into visible net profitability, rather than the growth itself.