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Nagarro SE (DE:NA9)
XETRA:NA9
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Nagarro SE
(XETRA:NA9)
Rating:66Neutral
Price Target:
€57.00
▲(6.74% Upside)
Positive Factors
Earnings
FY24 adjusted EBITDA of €146.5m is 7% ahead of the street expectations.
Financial Performance
Preliminary FY24 numbers showed significantly better profitability.
Market Confidence
Having the first-time audit from KPMG should rebuild market confidence and support shares from here on.
Negative Factors
Audit Delay
The publication of the audited '24 report would be delayed by two weeks as the new auditor, KPMG, needs additional time to finalize the process.
Revenue Guidance
Management revised its guidance downward, now expecting revenue to land near the lower end of the previously projected range and adjusted EBITDA margin to come in below the initial target.
Tax Expenses
Net profit was further weighed down by higher income tax expenses linked to withholding taxes on inter-company dividends.
Nagarro SE (NA9) vs. iShares MSCI Germany ETF (EWG)
Market Cap
$735.64M
Dividend Yield1.84%
Average Volume (3M)31.73K
Price to Earnings (P/E)17.9
Beta (1Y)0.84
Revenue Growth5.36%
EPS Growth-24.91%
CountryDE
Employees17,938
SectorTechnology
Sector Strength85
IndustryInformation Technology Services
Share Statistics
EPS (TTM)0.65
Shares Outstanding13,775,985
10 Day Avg. Volume51,657
30 Day Avg. Volume31,728
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.38
Enterprise Value/Revenue1.03
Enterprise Value/Gross Profit4.46
Enterprise Value/Ebitda7.59
Forecast
1Y Price Target
$91.50Price Target Upside71.35% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Nagarro SE Business Overview & Revenue Model
Company DescriptionNagarro SE, a digital engineering company, provides digital engineering and technology solutions in North America, Central Europe, rest of Europe, and internationally. The company offers agile; API management; application development and management; application manages services; accelerated quality and test engineering; artificial intelligence, data and analytics, blockchain, clous, CRM, customer communications, digital commerce solutions, digital marketing and personalization, digital ventures, ECM and portals, emedded systems, enterprise architecture consulting, ERP, identity and access management, internet of things, process consulting, mainframe and legacy, mobility solutions, trainings, product engineering, resilience engineering, security, technical communications, and transformation and modernization services. It serves customers in automotive, banking and financial services, energy and utilities, gaming and entertainment, industry and automation, insurance, ISV, life sciences and healthcare, media and publishing, non-profits and education, public sector, retail and CPG, telecom, and travel and logistics industries. The company was founded in 1996 and is based in Munich, Germany.
How the Company Makes MoneyNagarro SE generates revenue primarily through its digital engineering and technology consulting services. The company's revenue streams include custom software development, system integration, IT consulting, and managed services. Nagarro partners with a wide array of clients across multiple industries, delivering tailored solutions that address specific business challenges. By leveraging its expertise in emerging technologies and maintaining long-term relationships with its clients, Nagarro sustains its revenue growth and market presence. The company's earnings are also bolstered by its strategic acquisitions and global delivery model, enabling it to serve clients efficiently across different geographies.
Nagarro SE Earnings Call Summary
Earnings Call Date:Aug 14, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 14, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture. While Nagarro demonstrated strong revenue performance, client expansion, and operational efficiency, significant challenges were noted due to currency impacts and adjustments in financial guidance, leading to a balanced outlook.Q2-2025 Updates
Positive Updates
Revenue and Growth Performance
Nagarro reported Q2 2025 revenue of EUR 252 million, with an adjusted EBITDA of EUR 30.5 million and a gross margin increase to 33.2% from 30.0% a year ago due to productivity gains.
Client Base Expansion
Increased number of EUR 1 million-plus generating clients, indicating strong client loyalty and satisfaction. NPS for the quarter was a strong 66.
Operational Efficiency
Demonstrated excellent operational efficiency with significant improvements despite currency challenges. Days sales outstanding improved from 88 days to 85 days.
AI and Digital Transformation
Encouraging pickup in activity in data, cloud, and AI, with clients increasingly comfortable with AI, leading to new business opportunities.
Regional and Industrial Growth
Central Europe grew strongly at 9%, with significant growth in automotive and industrial sectors. Strong traction in the Middle East with new public and private sector clients.
Negative Updates
Currency Impact on Financial Performance
The pronounced weakening of the dollar against the euro resulted in a revaluation loss of EUR 18.0 million in H1, significantly impacting adjusted EBITDA.
Guidance Adjustment
Due to current demand trends and cost trajectory, revenue for 2025 is expected at the lower end of the initial guidance. Adjusted EBITDA margin guidance was revised down to 13.5%-14.5% from 14.5%-15.5%.
Decline in Horizontal Tech Revenue
Continued decline in Horizontal Tech revenue, as the company purposefully moves away from this segment over the last decade.
Cash Flow Challenges
Cash outflow of EUR 74 million for the 6-month period ended June 30, 2025, compared to an inflow of EUR 8.8 million for the same period last year.
Company Guidance
During the Nagarro SE First Half 2025 Earnings Call, the company provided detailed guidance and discussed various metrics. For Q2 2025, Nagarro reported revenue of EUR 252 million and an adjusted EBITDA of EUR 30.5 million, resulting in an EBITDA margin of 12.1%. Gross margin improved to 33.2%, up from 30.0% in the same period last year. The company faced a EUR 18.0 million negative impact on adjusted EBITDA due to currency fluctuations, specifically the weakening of the dollar against the euro. For the full year 2025, Nagarro adjusted its revenue guidance to the lower end of EUR 1,020 million to EUR 1,080 million and revised its adjusted EBITDA margin expectation to between 13.5% and 14.5%, down from the initial 14.5% to 15.5% target. The company also noted a strong Net Promoter Score (NPS) of 66 and highlighted its diverse client base, with 188 accounts generating over EUR 1 million each. Additionally, Nagarro mentioned strategic initiatives and partnerships in Japan, the German Mittelstand, and Edge AI and IoT as future growth drivers. The company is also progressing in strengthening its corporate governance and exploring ways to mitigate currency impact on financial results.Nagarro SE Financial Statement Overview
Summary
Nagarro SE demonstrates strong revenue growth and operational efficiency, with robust cash flow metrics. However, a high debt-to-equity ratio and slight decline in net income pose minor concerns.Income Statement
Nagarro SE has shown consistent revenue growth, with a notable increase from 2020 to 2025. The TTM (Trailing-Twelve-Months) data indicates a gross profit margin of 19.73% and a net profit margin of 4.47%. However, there is a slight decline in net income compared to the previous annual report. EBIT and EBITDA margins are strong at 8.80% and 13.73% respectively, reflecting good operational efficiency. Overall, the income statement reflects positive growth trends and stable profitability, though the net income fluctuation poses a minor concern.75
Positive
Balance Sheet
The company's balance sheet shows a moderate debt-to-equity ratio of 1.82, indicating a relatively high reliance on debt. The equity ratio stands at 26.52%, which suggests a reasonable level of stability. Return on equity (ROE) is 21.63%, highlighting effective use of equity to generate profits. While the company's leverage is a potential risk, the overall balance sheet demonstrates a balance between growth and stability.70
Positive
Cash Flow
Nagarro SE has a robust operating cash flow, with a strong free cash flow growth rate of 34.94% compared to the previous year. The operating cash flow to net income ratio is 1.98, indicating efficient cash generation relative to reported net income. The free cash flow to net income ratio is also healthy at 1.79. Overall, the cash flow statement reflects strong cash generation capability and efficient capital management, positioning the company well for future growth.80
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 988.41M | 971.99M | 912.05M | 856.34M | 546.04M | 430.37M |
| Gross Profit | 227.56M | 251.69M | 186.51M | 199.25M | 106.53M | 106.93M |
| EBITDA | 133.69M | 137.55M | 122.18M | 146.06M | 70.65M | 66.68M |
| Net Income | 40.14M | 49.16M | 52.14M | 77.38M | 30.00M | 18.45M |
Balance Sheet | ||||||
| Total Assets | 728.43M | 795.70M | 679.86M | 618.14M | 524.87M | 386.82M |
| Cash, Cash Equivalents and Short-Term Investments | 129.09M | 197.41M | 123.33M | 115.81M | 109.00M | 109.35M |
| Total Debt | 367.55M | 384.09M | 323.44M | 272.32M | 272.60M | 237.74M |
| Total Liabilities | 574.39M | 573.04M | 498.75M | 453.46M | 428.04M | 340.29M |
| Stockholders Equity | 154.04M | 222.66M | 181.12M | 164.68M | 96.83M | 43.80M |
Cash Flow | ||||||
| Free Cash Flow | 76.77M | 79.15M | 58.18M | 78.16M | 41.28M | 65.87M |
| Operating Cash Flow | 84.98M | 86.52M | 65.06M | 82.30M | 43.96M | 69.44M |
| Investing Cash Flow | -16.02M | -16.84M | -63.70M | -44.48M | -52.80M | -10.12M |
| Financing Cash Flow | -72.28M | 9.86M | -6.68M | -28.31M | 13.00K | 6.48M |
Nagarro SE Technical Analysis
Negative
53.40
Price Trends
56.20
Negative
59.27
Negative
71.01
Negative
Market Momentum
-0.94
Negative
45.72
Neutral
86.78
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:NA9, the sentiment is Negative. The current price of 53.4 is below the 20-day moving average (MA) of 53.70, below the 50-day MA of 56.20, and below the 200-day MA of 71.01, indicating a bearish trend. The MACD of -0.94 indicates Negative momentum. The RSI at 45.72 is Neutral, neither overbought nor oversold. The STOCH value of 86.78 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DE:NA9.
Nagarro SE Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $735.64M | 17.92 | 20.97% | 1.84% | 5.36% | -24.91% | |
61 Neutral | $35.62B | 8.22 | -10.94% | 1.88% | 8.86% | -10.36% | |
| ― | €539.64M | 44.94 | 6.72% | 0.93% | ― | ― | |
| ― | €707.52M | 39.30 | 3.11% | ― | ― | ― | |
| ― | €458.07M | 12.03 | 15.59% | 2.89% | ― | ― | |
| ― | €525.12M | 25.87 | 16.15% | ― | ― | ― | |
| ― | €487.36M | 20.17 | 15.66% | 1.69% | ― | ― |
* Technology Sector Average
Performance Comparison
DE:NA9
Nagarro SE
51.60
-23.00
-30.83%
GB:0N5I
adesso AG
82.60
17.45
26.78%
GB:0O0F
CANCOM SE
22.60
-4.10
-15.36%
GB:0O2W
GFT Technologies
17.50
-3.36
-16.11%
GB:0NJB
SNP Schneider Neureither & Partner AG (Schneider Neureither & Partner AG)
74.80
17.80
31.23%
GB:0W19
DATAGROUP
59.30
19.26
48.10%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.