Disrupting the pathology playbook with AI; INITIATE with BUY

Aiforia sits at the forefront of this transformation. The company has developed a leading AI-powered image analysis platform that automates key tasks within the pathology workflow, helping laboratories and hospitals dramatically increase efficiency and diagnostic accuracy. For instance, a research study evaluated how well Aiforia’s AI fared against pathologists, in measuring cell growth in gastrointestinal neuroendocrine tumors. This study found that Aiforia’s AI model outperformed pathologists in both accuracy and reliability.

Market leadership for a reason. Aiforia has won 100% of the European clinical tenders it has entered (>30% market share), reflecting its exceptional competitive quality. Its platform currently covers 60% of known cancer types (target of >80% within the next few years), with half of its models already holding regulatory approval, more than any other competitor. Aiforia’s AI delivers granular, cellular-level insights, enabling more precise and reliable diagnoses. With a strong research pedigree, including collaborations with leading universities, Aiforia is consistently the solution of choice in academic studies and published research.

Digital pathology is reaching a critical inflection point, with global adoption for disease diagnosis set to accelerate from 22% in 2024 to 50% by 2029. This rapid market transformation, combined with Aiforia’s unique positioning, underpins the company’s ability to outpace the broader pathology AI market, which is expected to grow at 21% CAGR, while Aiforia is projected to achieve a 52% CAGR (FY29e € 23m sales, eNuW) over the same period. This growth is driven by both an increasing customer base and a sharp rise in the number of slides processed for existing clients.

Leveraging a capital-light, software-based model, the company offers excellent scalability with minimal client churn in a maturing market. Like other leading healthcare technology firms, Aiforia is expected to deliver strong operating leverage, converting top-line growth into sustainable profitability, with EBIT margins projected at 27-32% at maturity (eNuW).

We see Aiforia as a structural growth story with a clear pathway to scale and profitability. Its technology directly addresses one of healthcare’s most pressing challenges, the diagnostic capacity gap, while offering investors exposure to the broader theme of AI-enabled medical automation. We initiate coverage with a BUY rating and a € 3.50 price target based on our DCF valuation.