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Nagarro SE (DE:NA9)
XETRA:NA9
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Nagarro SE
(XETRA:NA9)
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Rating:69Neutral
Price Target:
€60.00
▲(11.32% Upside)
Nagarro SE's overall stock score reflects strong financial performance and a fair valuation, tempered by technical indicators showing mixed signals and challenges highlighted in the earnings call. The company's high leverage and currency impacts present risks that need careful management.
Positive Factors
Revenue Growth
Strong revenue growth indicates successful market penetration and client acquisition, supporting long-term business expansion.
Client Base Expansion
Expanding client base with high-value contracts enhances revenue stability and demonstrates effective client relationship management.
Operational Efficiency
Operational efficiency improvements reduce costs and enhance profitability, providing a competitive advantage in the tech services industry.
Negative Factors
High Leverage
High leverage can limit financial flexibility and increase risk during economic downturns, potentially impacting long-term growth.
Currency Impact
Currency fluctuations pose a risk to profitability, affecting financial performance and necessitating strategic hedging measures.
Cash Flow Challenges
Negative cash flow impacts the company's ability to invest in growth opportunities and may strain financial resources if not addressed.
Nagarro SE (NA9) vs. iShares MSCI Germany ETF (EWG)
Market Cap
$753.55M
Dividend Yield1.83%
Average Volume (3M)23.25K
Price to Earnings (P/E)17.9
Beta (1Y)0.91
Revenue Growth5.36%
EPS Growth-24.91%
CountryDE
Employees17,938
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)0.65
Shares Outstanding13,775,985
10 Day Avg. Volume23,522
30 Day Avg. Volume23,246
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 Cap1.35
Enterprise Value/Revenue1.03
Enterprise Value/Gross Profit4.46
Enterprise Value/Ebitda7.59
Forecast
1Y Price Target
$74.86Price Target Upside38.89% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Nagarro SE Business Overview & Revenue Model
Company DescriptionNagarro SE (NA9) is a global technology consulting and services company that specializes in digital transformation, software engineering, and IT services. The company operates in various sectors, including automotive, healthcare, financial services, and consumer goods, providing innovative solutions that enhance operational efficiency and customer engagement. Nagarro's core offerings include custom software development, cloud services, data analytics, and digital experience design, aimed at helping businesses navigate complex digital landscapes and leverage emerging technologies.
How the Company Makes MoneyNagarro generates revenue primarily through its consulting and IT services, which are billed based on project engagements, time-and-materials contracts, and fixed-price contracts. The company has established key revenue streams from software development projects, system integration, and maintenance services. Additionally, Nagarro benefits from long-term partnerships with major clients across various industries, allowing for recurring revenue opportunities and the ability to scale projects. The company's focus on digital transformation services positions it well to capitalize on the growing demand for innovative technology solutions, further enhancing its earnings potential.
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 profitability, supported by efficient operations. However, the high leverage on the balance sheet presents potential risks that need careful management. The cash flow position is stable, with good cash conversion metrics, although recent free cash flow growth has been negative.Income Statement
Nagarro SE has shown strong revenue growth, particularly in the TTM period with a significant increase of 79.9%. The company maintains healthy gross and net profit margins, although there is a slight decline in margins compared to the previous year. The EBIT and EBITDA margins are stable, indicating efficient operational management. Overall, the income statement reflects robust growth and profitability, with minor concerns regarding margin compression.78
Positive
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio, which indicates significant leverage and potential risk if not managed properly. However, the company has a reasonable return on equity, suggesting effective use of equity to generate profits. The equity ratio is moderate, reflecting a balanced asset structure. While the company is leveraging debt for growth, the high debt levels could pose risks in volatile market conditions.65
Positive
Cash Flow
Nagarro SE's cash flow statement shows a slight decline in free cash flow growth in the TTM period, but the company maintains a strong free cash flow to net income ratio, indicating good cash conversion. The operating cash flow to net income ratio is moderate, suggesting adequate cash generation from operations. Despite the recent dip in free cash flow growth, the overall cash flow position remains solid, supporting ongoing operations and investments.72
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
Neutral
53.90
Price Trends
52.12
Positive
54.89
Negative
65.04
Negative
Market Momentum
0.69
Negative
59.53
Neutral
77.01
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:NA9, the sentiment is Neutral. The current price of 53.9 is above the 20-day moving average (MA) of 51.72, above the 50-day MA of 52.12, and below the 200-day MA of 65.04, indicating a neutral trend. The MACD of 0.69 indicates Negative momentum. The RSI at 59.53 is Neutral, neither overbought nor oversold. The STOCH value of 77.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DE:NA9.
Nagarro SE Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | €473.34M | 12.22 | 15.59% | 2.75% | 5.12% | -20.33% | |
72 Outperform | €538.21M | 25.52 | 16.15% | ― | 24.02% | 74.15% | |
69 Neutral | $753.55M | 17.94 | 20.97% | 1.83% | 5.36% | -24.91% | |
69 Neutral | €800.49M | 43.02 | 3.11% | 3.85% | -0.29% | -48.23% | |
68 Neutral | €526.52M | 21.49 | 15.66% | 1.58% | 11.88% | -3.36% | |
67 Neutral | €642.38M | 52.39 | 6.72% | 0.77% | 12.68% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
DE:NA9
Nagarro SE
53.90
-33.78
-38.53%
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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.