Back to Portfolio
SQN

Swissquote Group Holding SA

CHF 413 CHF 6.17B market cap 2026-02-21
Swissquote Group Holding SA SQN BUFFETT / MUNGER / KLARMAN SUMMARY
1 SNAPSHOT
PriceCHF 413
Market CapCHF 6.17B
EVCHF 6.17B
Net DebtCHF -5.3B
Shares14.94M
2 BUSINESS

Switzerland's leading online bank and trading platform, providing securities trading, leveraged forex, crypto custody, and digital banking services to 650K+ accounts across 10 global offices. Revenue split: 34% net interest, 27% fees/commissions, 14% eForex, 13% crypto, 12% trading. 48% non-transaction based. Owns Yuh neobank (285K accounts).

Revenue: CHF 661M Organic Growth: 24.4%
3 MOAT NARROW

Swiss banking license (FINMA-regulated since 2001) creates permanent regulatory moat. 650K+ account switching costs compound with portfolio size. #1 Swiss online broker with 25-year technology lead. Revenue/FTE of CHF 543K demonstrates scale leverage. B2B white-label platform creates distribution without acquisition cost.

4 MANAGEMENT
CEO: Marc Burki (since 1999, founder)

30% dividend payout ratio growing 4x in 4 years. Small buybacks. Strategic M&A (acquired Yuh fully for CHF 180M in 2025). Growth buffer of CHF 230M preserved for inorganic opportunities. Founder owns 11.85% of shares (~CHF 730M).

5 ECONOMICS
52.3% Op Margin
28.9% ROIC
CHF 283.5M FCF
Net cash (bank) Debt/EBITDA
6 VALUATION
FCF/ShareCHF 18.98
FCF Yield4.6%
DCF RangeCHF 420 - 530

Conservative: 8-15% growth, 9.5% discount, 2.5% terminal. Base case uses management 2028 targets (CHF 900M rev, CHF 500M pre-tax profit, 55% margin).

7 MUNGER INVERSION -26.0%
Kill Event Severity P() E[Loss]
Interest rate collapse destroys NII (34% of revenue) -25% 30% -7.5%
Crypto winter eliminates 13% of revenue -20% 25% -5.0%
Saxo/IBKR fee war compresses margins -30% 15% -4.5%
FINMA regulatory action impairs license -40% 10% -4.0%
Founder departure slows innovation -25% 10% -2.5%
Major cyber breach or technology failure -50% 5% -2.5%

Tail Risk: Correlated scenario: Swiss financial crisis + crypto crash + rate collapse simultaneously. Low probability (<5%) but would hit all revenue streams. CHF 6.2B market cap could compress to CHF 1.5-2.0B (CHF 100-135/share).

8 KLARMAN LENS
Downside Case

Swiss rates at 0% crush NII by 40%. Crypto markets crash. Saxo's pricing erodes market share. Revenue stalls at CHF 550M, margins compress to 40%, P/E de-rates to 12x on CHF 170M net income. Bear price: CHF 135/share.

Why Market Wrong

Market classifies Swissquote as a bank (low multiple) when it operates as a fintech platform with 52% margins, 29% ROE, founder-led, and 17% CAGR in client assets. Geographic neglect (Swiss small-cap) and pullback from speculative high create entry window. NII headwind is temporary; platform growth is structural.

Why Market Right

The 2024-2025 boom was crypto-driven and unsustainable. CHF 85.5M crypto revenue (353% growth) masks declining eForex and rate-sensitive interest income. Saxo's fee cuts are eroding Swissquote's pricing power. The stock may be fairly valued at 20x with structurally lower growth ahead.

Catalysts

Crypto market recovery reignites trading volumes. 2028 mid-term targets achieved (CHF 900M revenue, CHF 500M profit). Yuh reaches 500K+ accounts. Additional M&A using CHF 230M growth buffer. Inclusion in major European indices.

9 VERDICT WAIT
A- T2 Resilient
Strong BuyCHF 300
BuyCHF 350
SellCHF 645

Swissquote is a high-quality Swiss fintech compounder with 29% ROE, 52% margins, founder-led, and strong growth runway to CHF 900M revenue by 2028. At CHF 413, the 4% margin of safety is insufficient. Accumulate below CHF 350 (18% MOS) for a 3% portfolio position. Strong buy below CHF 300 for full 5% position.

🧠 ULTRATHINK Deep Philosophical Analysis

SQN - Ultrathink Analysis

The Real Question

The surface question is whether Swissquote is a good investment at CHF 413. But that misses the deeper inquiry entirely.

The real question is: Can a regulated Swiss bank behave like a Silicon Valley growth company for two more decades?

Swissquote has done something genuinely rare. It has compounded client assets from CHF 3 billion to CHF 76 billion over fifteen years. It has grown net income at 26% annually for five years. It maintains a 52% operating margin while simultaneously growing headcount, expanding internationally, integrating crypto custody, and launching a neobank. It has done all of this inside the straitjacket of Swiss banking regulation, with a FINMA capital ratio 2.1x the minimum.

The companies that achieve this kind of disciplined growth under regulatory constraint are the ones that endure. Think of Visa inside the payment regulation framework. Think of S&P Global inside the rating agency oligopoly. The regulation that appears to be a burden is actually the moat. It keeps out the quick-and-dirty competitors who might otherwise commoditize the business.

So the real question is not about Swissquote's past. It is about whether the specific combination of Swiss regulation, founder leadership, and digital-first architecture can continue generating 20%+ ROE for the next decade. If yes, almost any price under CHF 500 will look cheap in hindsight. If no -- if Swissquote is actually a cyclical beneficiary of crypto mania and falling rates masquerading as a structural compounder -- then CHF 413 is expensive.

Hidden Assumptions

Assumption 1: Net interest income is structural. The market assumes NII (34% of revenue) is a tailwind-driven windfall that will evaporate as Swiss rates hit zero. But this assumption ignores second-order effects. When rates fall, client cash balances actually increase -- people shift from bonds to cash. Swissquote's client deposits grew from CHF 8.6B to CHF 11.4B precisely during the rate-cutting cycle. More deposits at lower margins can equal similar total NII. The assumption of linear NII decline is probably wrong.

Assumption 2: Crypto is a cyclical windfall. True, crypto revenue exploded 353% in 2024. But zoom out: Swissquote is not a crypto exchange. It is a regulated Swiss bank that happens to offer crypto custody alongside stocks, bonds, forex, and savings accounts. The crypto capability was additive to an already-profitable platform. When crypto cools, Swissquote doesn't lose customers -- they just trade less crypto and more stocks. The accounts remain. The deposits remain. The cross-selling continues.

Assumption 3: Fee competition will compress margins. Saxo Bank cut fees dramatically in 2024. The assumption is that Swissquote must follow, compressing margins. But Swissquote's revenue model is fundamentally different from a pure-play broker. Only 27% of revenue comes from commissions. The rest is interest income, trading spreads, custody fees, and crypto margins. You cannot price-war your way into a Swiss banking license, a regulated crypto custody solution, or a trusted brand with a 25-year track record. Fee competition primarily affects the commodity brokerage layer, which is Swissquote's smallest revenue segment.

Assumption 4: The stock's pullback from CHF 706 signals deterioration. The stock doubled in eight months and then halved. This feels alarming. But the underlying business didn't halve. Revenue grew 13% in H1 2025. Pre-tax profit reached a record CHF 185M. Net new money hit a record CHF 5.2B. The pullback was entirely multiple compression from a speculative overshoot. The business is executing better than ever. The stock just got ahead of itself.

The Contrarian View

For the bears to be right, the following must all be true simultaneously:

  1. Swiss interest rates stay at zero for 5+ years, AND Swissquote fails to grow deposits fast enough to offset margin compression, AND it cannot reprice its lending book. This requires a Japan-style monetary environment in Switzerland -- possible but not the base case given SNB's historically moderate policies.

  2. Crypto becomes permanently irrelevant -- not just cyclically quiet, but structurally dead. This requires Bitcoin to fail as a store of value, Ethereum to fail as a smart contract platform, and regulated Swiss crypto custody to have zero value. This seems very unlikely given the trajectory of institutional adoption.

  3. Saxo and Interactive Brokers win the Swiss market -- they overcome the trust deficit of foreign brokers in a country where banking relationships are quasi-sacred, AND Swiss retail investors abandon their existing accounts with all their portfolio history, tax records, and banking integration. Switching costs in Swiss banking are enormous and culturally reinforced.

  4. Marc Burki loses his edge -- after 27 years of unbroken execution, the founder stumbles. He misallocates the CHF 230M growth buffer. He overpays for acquisitions. He fails to adapt the platform to AI-driven finance. The co-founder Buzzi cannot pick up the slack.

The bears need all four. Any one failing makes Swissquote a CHF 8-10B company within five years. The conjunction of all four is a low-probability scenario, perhaps 10-15%.

Simplest Thesis

Swissquote is Switzerland's Goldman Sachs for the retail investor -- a platform that becomes more valuable with every account it adds, every franc it custodies, and every product it integrates, all protected by a banking license that competitors cannot replicate.

Why This Opportunity Exists

The opportunity exists because of three forces that have nothing to do with Swissquote's business quality:

First, the crypto hangover. The stock ripped to CHF 706 on crypto euphoria. When Bitcoin corrected, Swissquote traded down in sympathy, even though crypto is only 13% of revenue and the company survived the 2022 crypto winter with barely a scratch. The market is punishing Swissquote for being associated with crypto, ignoring that the crypto capability is pure optionality grafted onto a stable banking platform.

Second, interest rate fear. The SNB has cut rates to near-zero. NII will decline. But the market is extrapolating the worst case without considering Swissquote's deposit growth or its ability to earn on a larger balance sheet at lower margins. When rates rose, Swissquote was a "rate beneficiary." When rates fell, it became a "rate victim." The truth is that it is neither -- it is a platform business that earns on assets, and assets are growing at 17% annually regardless of rate direction.

Third, geographic neglect. CHF 6.2B market cap in Zurich. No major index inclusion. Limited analyst coverage outside Switzerland. European small-cap funds are out of favor. Passive flows bypass this stock entirely. This is the purest form of structural mispricing: not because anyone is wrong about the business, but because not enough people are looking.

What Would Change My Mind

I would abandon this thesis if:

  1. Net new money turns negative for two consecutive quarters. This would signal that Swissquote's growth engine -- new clients bringing new assets -- has stalled. Not because of market declines (which reduce assets but not inflows), but because of genuine client attrition or competitive loss.

  2. The capital ratio drops below 18%. This would mean either hidden losses on the investment portfolio, unexpected loan defaults, or reckless expansion. The 23.5% ratio is the financial fortress. If the fortress weakens, the investment thesis crumbles.

  3. Marc Burki sells more than 20% of his personal stake. Founders selling is the strongest negative signal in investing. If the man who built this company over 27 years is reducing his exposure, he knows something I do not.

  4. A competitor launches a regulated Swiss crypto bank at significantly lower cost. This would invalidate the assumption that Swissquote's integrated banking + crypto offering is defensible. Today, no Swiss competitor offers this combination at scale. If one emerges, the moat narrows.

  5. Operating margins fall below 40% for two consecutive years. This would indicate that scale advantages are not real, that competition is commoditizing the platform, or that expenses are structurally growing faster than revenue.

The Soul of This Business

Every company has a soul -- the irreducible essence that explains why it succeeds when others fail.

Swissquote's soul is the marriage of Swiss conservatism and technological ambition.

This is a company founded by two electrical engineers who worked at the European Space Agency. They did not build a bank. They built a technology platform and then wrapped a banking license around it. The technology came first. The regulation came second. This sequencing matters enormously.

Traditional Swiss banks -- UBS, Credit Suisse (now absorbed), Julius Baer -- have technology as a cost center. They are banks that use technology. Swissquote is a technology platform that happens to be a bank. The distinction is visible in the numbers: CHF 543K revenue per employee versus CHF 250-350K at traditional Swiss banks. The distinction is visible in the culture: 21% of employees are in technology, and the CEO has an engineering degree.

This soul -- technology-first, regulation-as-moat -- is what makes the competitive position potentially durable. You cannot disrupt Swissquote by being a better bank (regulation prevents it). You cannot disrupt it by being better technology (because it already is the technology). You would need to be both simultaneously, which is precisely what the FINMA licensing process is designed to prevent.

The vulnerability is that souls can atrophy. If Burki retires and is replaced by a traditional banker, the technology-first DNA could erode. If FINMA imposes onerous new requirements that consume R&D bandwidth, the innovation engine could stall. If the company becomes complacent after reaching CHF 100B in client assets, the startup hunger could fade.

But today, at CHF 413 per share, you are buying a company that just posted a 52% operating margin, grew revenue 24%, added 76,000 accounts, and guided for CHF 900M in revenue by 2028. The soul is alive. The question is only the price.

And at the right price -- CHF 300 to 350 -- this is exactly the kind of founder-led, moat-protected, digitally-leveraged compounder that creates generational wealth.

Executive Summary

Investment Thesis (3 sentences): Swissquote is Switzerland's dominant online bank and trading platform, compounding client assets at 17% CAGR and net income at 34% CAGR over five years, driven by structural shifts toward digital finance, crypto custody, and international expansion. The company earns a 29% ROE with 52% operating margins, has a FINMA-regulated banking license with 23.5% capital ratio (vs 11.2% minimum), and is run by its founder-CEO who owns 12% of shares. At CHF 413, the stock trades at 20x trailing earnings after a 40% pullback from its all-time high of CHF 706, offering a quality compounder at a reasonable but not bargain price.

Key Metrics Dashboard:

Metric Value Assessment
P/E (TTM) 20.3x Fair for quality
Forward P/E 18.1x Attractive
P/B 5.4x Rich for bank
ROE (5yr avg) 27.5% Exceptional
Operating Margin 52.3% World-class
Net Margin 44.5% Outstanding
Revenue CAGR (5yr) 14.1% Strong
Net Income CAGR (5yr) 26.4% Excellent
Dividend Yield 1.45% Modest
FCF Yield (owner earnings) 4.6% Decent
Capital Ratio 23.5% 2.1x FINMA minimum
Insider Ownership ~12% (founder) Aligned

Recommendation: WAIT / ACCUMULATE below CHF 350

Phase 0: Opportunity Identification (Klarman)

Why Does This Opportunity Exist?

  1. Pullback from Speculative High: SQN rallied from CHF 300 (end 2024) to CHF 706 (Aug 2025) -- a 135% surge driven by crypto mania and record H1 2025 results -- then corrected 40% as crypto cooled and Swiss interest rates fell to 0%. The stock's beta of 1.26 amplifies both directions.

  2. Interest Rate Headwind Narrative: Swiss National Bank cut rates to near-zero by H2 2025. Net interest income (34% of 2024 revenue) faces compression. The market is pricing in NII decline, creating a bearish narrative despite offsetting growth in trading and crypto.

  3. Small-Cap European Neglect: Despite CHF 6.2B market cap, Swissquote has limited coverage outside Switzerland. It's not in major European indices. Foreign investors are underexposed to Swiss small/mid-caps. This creates structural undervaluation.

  4. Banking Sector Discount: Banks trade at low multiples. Swissquote is classified as a bank but operates more like a fintech/platform with 50%+ margins, 29% ROE, and asset-light growth. The sector label suppresses the multiple.

Conclusion: The opportunity exists due to a combination of cyclical pullback, sector misclassification, and geographic neglect. The business quality deserves a premium fintech multiple, not a banking discount.

Phase 1: Risk Analysis (Inversion Thinking)

How Could This Investment Lose 50%+ Permanently?

Risk 1: Interest Rate Collapse Destroys NII (P = 30%, Impact = -25%) Net interest income was CHF 224M in 2024 (34% of revenue). With SARON at 0% and ECB/Fed cutting, NII could decline 30-40% (CHF 70-90M hit). However, management targets only 40% non-transaction revenue by 2028 (down from 48%), suggesting they're already pivoting. Expected loss: -7.5%.

Risk 2: Crypto Winter (P = 25%, Impact = -20%) Crypto was 13% of 2024 revenue (CHF 85.5M) and grew 353% YoY. A sustained crypto collapse could erase this. But Swissquote survived the 2022 crypto winter (revenue only fell 13.5%). Crypto is additive optionality, not existential dependency. Expected loss: -5.0%.

Risk 3: Competitive Disruption from Saxo/IBKR (P = 15%, Impact = -30%) Saxo slashed fees in 2024, becoming the cheapest Swiss broker. Interactive Brokers is the foreign heavyweight. If Swissquote loses pricing power, margins compress. But the Swiss banking license, local trust, and 650K+ account relationships create significant switching costs. Expected loss: -4.5%.

Risk 4: Regulatory/FINMA Action (P = 10%, Impact = -40%) FINMA ordered Swissquote to reduce suspicious activity in 2024. Serious regulatory action could impair the banking license. However, Swissquote has maintained its license since 2001 and capital ratios far exceed minimums. Expected loss: -4.0%.

Risk 5: Key Man Risk - Marc Burki (P = 10%, Impact = -25%) Founder-CEO since 1999. Co-founder Paolo Buzzi is Deputy CEO and CTO. But Burki is the visionary. His departure could slow innovation and growth. Mitigated by Buzzi's long tenure and strong institutional processes. Expected loss: -2.5%.

Risk 6: Cyber Attack / Technology Failure (P = 5%, Impact = -50%) As an online bank, a major breach could be catastrophic. Swiss regulation mandates strong controls, and Swissquote invests heavily in technology (21% of FTE in technology). Expected loss: -2.5%.

Total Expected Risk-Adjusted Downside: -26.0%

Bear Case Summary (3 sentences):

Swiss rates at 0% crush NII by 40%, crypto markets crash eliminating 13% of revenue, and Saxo's aggressive pricing erodes Swissquote's market share in the core Swiss market. Revenue stalls at CHF 550M, margins compress to 40%, and the stock de-rates to 12x earnings on CHF 170M net income. Bear price target: CHF 135.

Sell Triggers (Non-Price):

  1. Capital ratio drops below 15% (sign of hidden losses)
  2. Quarterly account growth turns negative for 2+ quarters
  3. Marc Burki sells significant portion of his 12% stake
  4. FINMA imposes material restrictions on operations
  5. Net new money turns negative for full year

Phase 2: Financial Analysis

ROE Decomposition (DuPont)

Year Net Margin Asset Turnover Equity Multiplier ROE
2024 44.5% 5.0% 11.7x 28.9%
2023 41.0% 5.3% 11.1x 26.5%
2022 38.6% 4.0% 13.8x 23.2%
2021 40.9% 5.2% 14.7x 36.6%
2020 26.7% 4.6% 16.9x 22.4%

Note: Banking DuPont is distorted by client deposits (liabilities). The equity multiplier reflects banking leverage (client deposits), not financial risk. Key insight: ROE is driven by improving margins (26.7% to 44.5%), not increasing leverage. This is the best kind of ROE improvement.

Owner Earnings

Owner Earnings (2024) = Net Income + D&A - CapEx
= CHF 294.2M + CHF 45.8M - CHF 56.5M
= CHF 283.5M

Owner Earnings per Share = CHF 283.5M / 14.94M shares = CHF 18.98

ROIC Analysis

For an asset-light banking platform, ROIC on invested capital (equity + debt - excess cash):

Invested Capital = Equity + Debt - Excess Cash
= 1,133 + 210 - 0 = ~1,343M (all equity is operational for a bank)

ROIC = NOPAT / Invested Capital
= 294.2 / 1,016 (avg equity) = 28.9%

With WACC estimated at 9-10% (Swiss equity risk premium + beta 1.26), ROIC of 29% generates massive value: ROIC/WACC spread of ~19 percentage points.

DCF Valuation

Assumptions:

  • Base owner earnings: CHF 283.5M (2024)
  • Growth rates: 15% (2025-2028, per management 2028 targets), 10% (2029-2031), 5% (2032-2035)
  • Terminal growth: 2.5%
  • Discount rate: 9.5% (risk-free 1.5% + equity risk premium 5% + beta premium 3%)

Conservative DCF (10-year):

Year Owner Earnings PV Factor PV
2025 326.0 0.913 297.8
2026 374.9 0.834 312.6
2027 431.2 0.762 328.6
2028 495.8 0.696 345.1
2029 545.4 0.635 346.6
2030 599.9 0.580 348.0
2031 659.9 0.530 349.7
2032 693.0 0.484 335.3
2033 727.6 0.442 321.6
2034 764.0 0.404 308.6

PV of Cash Flows: CHF 3,394M Terminal Value: CHF 764M x (1.025) / (0.095 - 0.025) = CHF 11,193M PV of Terminal: CHF 11,193M x 0.404 = CHF 4,522M Enterprise Value: CHF 7,916M Per Share: CHF 530

Conservative DCF (lower growth, 8% years 1-4):

Using 8% near-term growth (accounting for NII headwind): Fair value CHF 420/share.

DCF Range: CHF 420 - CHF 530 per share

Owner Earnings Multiples

Multiple Value/Share Rationale
15x Owner Earnings CHF 285 Standard fair value
18x Owner Earnings CHF 342 Quality premium
20x Owner Earnings CHF 380 High-quality compounder
22x Owner Earnings CHF 418 Comparable fintech
25x Owner Earnings CHF 475 Growth premium

Graham Number

Graham Number = sqrt(22.5 x EPS x BVPS)
= sqrt(22.5 x 19.70 x 75.84)
= sqrt(33,599)
= CHF 183

Current price is 2.26x the Graham Number. This is not a Graham bargain but reflects the exceptional quality.

Intrinsic Value Estimate

Method Value Weight
DCF (conservative) CHF 420 30%
DCF (base) CHF 530 20%
20x Owner Earnings CHF 380 25%
22x Owner Earnings CHF 418 15%
Forward P/E 18x on CHF 24 EPS (2026E) CHF 432 10%

Weighted Intrinsic Value: CHF 430

Margin of Safety at CHF 413: (430 - 413) / 430 = 4.0% -- INSUFFICIENT

Phase 3: Moat Analysis

Moat Sources

1. Swiss Banking License & Regulatory Moat (NARROW-to-WIDE)

  • FINMA banking license since 2001 is a significant barrier. New entrants cannot simply replicate regulated Swiss banking.
  • Deposits protected under Swiss depositor protection (CHF 100K per depositor).
  • Capital ratio of 23.5% vs 11.2% minimum provides fortress-level safety.
  • This is the most durable moat source: regulatory barriers do not erode.

2. Switching Costs (NARROW)

  • 650,000+ account holders with linked bank accounts, securities portfolios, and banking relationships.
  • Cost to switch: re-transfer securities (time, potential tax events), change bank details, learn new platform.
  • Average client tenure is long -- 54% of 2024 revenue came from clients acquired before 2021.
  • Yuh app creates younger client relationships with decades of potential lifetime value.

3. Scale Advantages (NARROW)

  • Revenue/FTE of CHF 543K demonstrates operating leverage.
  • Fixed technology platform serves incremental clients at near-zero marginal cost.
  • 1,217 FTE generates CHF 661M revenue -- extraordinary efficiency.
  • Expenses grew 16.5% while revenue grew 24.4% in 2024: classic operating leverage.

4. Brand Trust (NARROW)

  • #1 Swiss online broker by accounts. "Swissquote" is synonymous with online investing in Switzerland.
  • Swiss domicile = trust premium for banking (safe, neutral, well-regulated).
  • International expansion benefits from "Swiss bank" brand cachet.

5. Network Effects (EMERGING)

  • B2B2C white-label platform (PostFinance, others) creates distribution without customer acquisition cost.
  • Yuh (285K accounts, now fully owned) provides a second growth vector.
  • Not yet a true network effect (more users don't directly benefit other users), but the platform effect strengthens with scale.

Moat Durability

Threat Severity Timeline Mitigation
Saxo/IBKR fee competition 3/5 2-5 years Banking services, Swiss trust, product breadth
Neobank disruption (Revolut) 2/5 3-7 years Full banking license vs e-money license
Crypto-native exchanges 2/5 Ongoing Regulated custody, integration with traditional finance
AI-powered robo-advisors 2/5 5-10 years Already integrating AI (SwissquoteGPT)
Traditional Swiss banks going digital 3/5 3-5 years 25-year technology lead, lower cost structure

10-Year Moat Trajectory: WIDENING -- Regulatory moat is permanent, switching costs compound with account growth, scale advantages accelerate with digital leverage.

Moat Rating: NARROW (trending toward WIDE)

Phase 4: Decision Synthesis

Management Assessment

Marc Burki, CEO since 1999 (Founder)

  • Co-founded Swissquote in 1996 after working at European Space Agency
  • Owns 11.85% of shares (CHF ~730M at current prices) -- massive skin in game
  • Has grown the company from startup to CHF 6.2B market cap over 27 years
  • Capital allocation: 30% payout ratio, small buybacks, strategic M&A (Yuh acquisition for CHF 180M)
  • Growth buffer of CHF 230M above internal 18% capital limit preserved for M&A opportunities
  • Dual leadership with co-founder Paolo Buzzi (CTO/Deputy CEO) provides continuity

Capital Allocation Track Record:

Use of Capital 2024 Assessment
Dividends CHF 64M (22% of owner earnings) Conservative, growing 4x in 4 years
Buybacks CHF 27M Small but positive
Organic CapEx CHF 57M Technology investment
M&A (Yuh) CHF 180M (2025) Strategic, now fully owned
Retained ~CHF 235M Funds growth buffer

Grade: A- (Excellent)

Position Sizing

Position Size = Base(3%) x (MOS/Target) x (Quality/100) x (1-Risk) x Catalyst
= 3% x (4%/20%) x (85/100) x (1-0.26) x 0.85
= 3% x 0.20 x 0.85 x 0.74 x 0.85
= 0.32%

At current prices, position size is negligible. This confirms the WAIT recommendation.

Expected Return (Probability Tree)

Scenario Probability 3-Year Return Weighted
Bull (CHF 900M rev by 2028) 25% +65% (CHF 680) +16.3%
Base (meets guidance) 45% +25% (CHF 515) +11.3%
Moderate Bear (NII decline) 20% -15% (CHF 350) -3.0%
Bear (recession + crypto crash) 10% -50% (CHF 205) -5.0%
Expected 3-Year Return 100% +19.5%
Annualized ~6.1%

Expected return of 6.1% annualized is below the 12%+ threshold for a compelling investment. Need a better entry price.

Price Targets

Level Price P/E Condition
Strong Buy CHF 300 14.4x (on 2026E ~CHF 21) 30% MOS
Accumulate CHF 350 16.7x 18% MOS
Fair Value CHF 430 20.5x IV estimate
Take Profits CHF 520 24.8x 20% above IV
Sell CHF 645 30.7x 50% above IV

Monitoring Metrics

Metric Current Warning Action
Quarterly NNM CHF 2.0B+ < CHF 1.0B Review thesis
Account Growth +13% < +5% Reduce target
Operating Margin 52.3% < 40% Review thesis
Capital Ratio 23.5% < 18% Sell trigger
Crypto % Revenue 13% > 25% Reassess risk
Marc Burki Ownership 11.85% Any material sale Sell trigger

Recommendation

INVESTMENT RECOMMENDATION
Company: Swissquote Group Holding SA    Ticker: SQN
Current Price: CHF 413    Date: 2026-02-21

VALUATION SUMMARY
Method                    Value/Share    vs Current
Graham Number             CHF 183        Premium
20x Owner Earnings        CHF 380        -8% MOS
DCF (Conservative)        CHF 420        +2% MOS
DCF (Base)                CHF 530        +22% MOS
22x Owner Earnings        CHF 418        +1% MOS

INTRINSIC VALUE ESTIMATE: CHF 430 (weighted)
MARGIN OF SAFETY: 4% -- INSUFFICIENT

RECOMMENDATION: WAIT

STRONG BUY PRICE:   CHF 300 (30% below IV)
ACCUMULATE PRICE:   CHF 350 (18% below IV)
FAIR VALUE:         CHF 430
TAKE PROFITS:       CHF 520
SELL:               CHF 645

QUALITY GRADE: A-
TIER: T2 Resilient
POSITION SIZE: 3% at accumulate price
CATALYST: Crypto market recovery + NII stabilization
PRIMARY RISK: Interest rate compression on NII
SELL TRIGGER: Capital ratio < 18%, Burki sells shares

Megatrend Resilience

Megatrend Score Notes
China Tech Superiority +1 Immune -- Swiss-focused, no China exposure
Europe Degrowth 0 42% international but primary market is resilient Switzerland
American Protectionism +1 Immune -- Swiss domicile, no US operations
AI/Automation +1 Benefits from AI (SwissquoteGPT, efficiency)
Demographics/Aging +1 Wealth transfer to digital-native generation benefits
Fiscal Crisis 0 Swiss banks exposed to financial system risks
Energy Transition +1 Immune -- digital, minimal energy footprint

Total: +5 | Tier: T2 Resilient

Sources

Document Source Key Data
Annual Report 2024 Swissquote IR Full financials, strategy
Annual Report 2023 Swissquote IR Historical comparisons
FY2024 Results Presentation Swissquote IR Detailed P&L, guidance
H1 2025 Interim Report Swissquote IR Latest results, updated guidance
StockAnalysis.com Third-party 5-year financials, cash flow, balance sheet
CompaniesMarketCap Third-party Historical price data
Swissquote IR website Primary Reports, presentations