TOMRA is down 70% — and I think the market is missing somethingTOMRA Systems ASAOSL_DLY:TOMRisbergCapitalA summary of my analysis — the full report (around 30 pages) is available here. Tomra Full Report https://risbergcapital.substack.com/p/tomra-a-market-leader-at-a-discount TOMRA (OSE:TOM) is down roughly 70% from its 2021 peak, trading at around NOK 97 versus a peak of about NOK 320 (at the time of writing). The simple explanation is that 2021 was a bubble when the stock traded at around 34x EV/EBITDA, which was never sustainable. But the market now seems to have concluded that the whole business is the problem, and I think that’s wrong. The business itself is in good shape. Collection, the reverse vending machines, and TOMRA’s largest and most profitable division, holds a dominant global position and most of its revenue is recurring service income that keeps coming in regardless of new sales. The Food division has come through its own rough patch and is growing again. The thing dragging the stock is the Recycling division, the sorting business, which is going through a genuinely weak stretch. However, that weakness is cyclical, not structural. It comes from low plastic prices and customers holding back on investment, not from TOMRA losing to competitors. Meanwhile, a major regulatory tailwind is coming into force, and the market seems to be completely ignoring it! The EU’s new packaging regulation, PPWR, begins to apply in August 2026 and requires a large share of plastic packaging to contain recycled material from 2030 and includes a jump from near zero to 35% recycled content within four years. That can’t be met without exactly the kind of sorting and collection infrastructure TOMRA builds. On top of that, deposit return schemes (DRS) are rolling out across Poland, the UK, Portugal, and more markets. In other words, the market is pricing TOMRA as if today’s depressed earnings are permanent, right before a regulatory wave that legislation is actively forcing into place. At NOK 97, the stock trades at around 17x EBITA on depressed earnings, below its own historical median of about 21x. In my base case, the analysis points to roughly a double over the coming years, and meaningfully more in a more optimistic scenario. (My model uses 2032 as a checkpoint, though a re-rating could come sooner or later.) My base case still only assumes TOMRA reaches about half of its own stated growth ambition. The most interesting thing about the setup is the asymmetry. Even my most pessimistic scenario produces a slightly positive return, because the recurring revenue base in the business makes it hard to construct a real revenue decline. The downside is limited; the upside is significant if the regulation plays out as planned. It’s of course not without risk.. Recycling order intake could stay weak through 2026, competitors like Envipco could take share in new deposit markets, and the market could keep valuing the business as a generic industrial for a long time. I go through all the risks in detail in the full analysis. The full report is around 30 pages and covers each division, the competitive landscape, the balance sheet, two separate valuation methods (DCF and SOTP), and all the assumptions behind the numbers. The full reasoning is here: Tomra Full Report https://risbergcapital.substack.com/p/tomra-a-market-leader-at-a-discount Everything written here is my own analysis and opinion, not financial advice. Always do your own research.