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Aker Solutions ASA's (OB:AKSO) Stock's On An Uptrend: Are Strong Financials Guiding The Market?

Simply Wall St · 4d ago

Most readers would already be aware that Aker Solutions' (OB:AKSO) stock increased significantly by 13% over the past three months. Given the company's impressive performance, we decided to study its financial indicators more closely as a company's financial health over the long-term usually dictates market outcomes. Particularly, we will be paying attention to Aker Solutions' ROE today.

ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. In simpler terms, it measures the profitability of a company in relation to shareholder's equity.

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How Is ROE Calculated?

The formula for return on equity is:

Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity

So, based on the above formula, the ROE for Aker Solutions is:

24% = kr2.5b ÷ kr10b (Based on the trailing twelve months to September 2025).

The 'return' refers to a company's earnings over the last year. Another way to think of that is that for every NOK1 worth of equity, the company was able to earn NOK0.24 in profit.

Check out our latest analysis for Aker Solutions

Why Is ROE Important For Earnings Growth?

So far, we've learned that ROE is a measure of a company's profitability. Depending on how much of these profits the company reinvests or "retains", and how effectively it does so, we are then able to assess a company’s earnings growth potential. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don’t share these attributes.

Aker Solutions' Earnings Growth And 24% ROE

To begin with, Aker Solutions has a pretty high ROE which is interesting. Further, even comparing with the industry average if 21%, the company's ROE is quite respectable. As a result, Aker Solutions' remarkable 61% net income growth seen over the past 5 years is likely aided by its high ROE.

Next, on comparing with the industry net income growth, we found that Aker Solutions' growth is quite high when compared to the industry average growth of 46% in the same period, which is great to see.

past-earnings-growth
OB:AKSO Past Earnings Growth January 7th 2026

The basis for attaching value to a company is, to a great extent, tied to its earnings growth. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. Is Aker Solutions fairly valued compared to other companies? These 3 valuation measures might help you decide.

Is Aker Solutions Using Its Retained Earnings Effectively?

Aker Solutions has a significant three-year median payout ratio of 65%, meaning the company only retains 35% of its income. This implies that the company has been able to achieve high earnings growth despite returning most of its profits to shareholders.

Besides, Aker Solutions has been paying dividends for at least ten years or more. This shows that the company is committed to sharing profits with its shareholders. Based on the latest analysts' estimates, we found that the company's future payout ratio over the next three years is expected to hold steady at 65%. Still, forecasts suggest that Aker Solutions' future ROE will drop to 14% even though the the company's payout ratio is not expected to change by much.

Conclusion

In total, we are pretty happy with Aker Solutions' performance. Especially the high ROE, Which has contributed to the impressive growth seen in earnings. Despite the company reinvesting only a small portion of its profits, it still has managed to grow its earnings so that is appreciable. That being so, according to the latest industry analyst forecasts, the company's earnings are expected to shrink in the future. Are these analysts expectations based on the broad expectations for the industry, or on the company's fundamentals? Click here to be taken to our analyst's forecasts page for the company.