Nagarro SE (NA9) AI Stock Analysis

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Nagarro SE

(XETRA:NA9)

Rating:65Neutral

Price Target:

€63.00

▲(8.53%Upside)

Nagarro SE's overall stock score is driven primarily by its strong financial performance and strategic initiatives highlighted in the earnings call. However, bearish technical indicators and valuation concerns, such as the absence of a dividend yield, weigh down the score.

Positive Factors

Dividends

Management proposes the distribution of a dividend of €1.0 per share, with a 1.5% yield.

Profitability

Preliminary FY24 numbers showed significantly better profitability.

Revenue Growth

Nagarro management announced new guidance with expected revenue growth, indicating a positive outlook for the company.

Negative Factors

Audit Delays

The publication of the audited '24 report would be delayed by two weeks as their new auditor, KPMG, needs additional time.

Financial Performance

The performance in Q1 was lacklustre with organic constant currency growth of only +1.7% and adj. EBITDA was down 23% YoY.

Margins

The margin of 12.2% fell short of the FY25 guidance range.

Nagarro SE (NA9) vs. iShares MSCI Germany ETF (EWG)

Market Cap

$799.70M

Dividend YieldN/A

Average Volume (3M)56.80K

Price to Earnings (P/E)17.6

Beta (1Y)0.83

Revenue Growth6.49%

EPS Growth-17.67%

CountryDE

Employees17,938

SectorTechnology

Sector Strength83

IndustryInformation Technology Services

Share Statistics

EPS (TTM)N/A

Shares Outstanding13,775,985

10 Day Avg. Volume26,962

30 Day Avg. Volume56,799

Financial Highlights & Ratios

PEG Ratio38.82

Price to Book (P/B)4.68

Price to Sales (P/S)0.00

P/FCF Ratio12.52

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$91.20

Price Target Upside57.10% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

Nagarro SE Business Overview & Revenue Model

Company DescriptionNagarro SE is a global digital engineering company that specializes in providing technology solutions and services. The company operates across various sectors, including automotive, banking, financial services, insurance, life sciences, and telecommunications. Nagarro offers a range of services such as digital product engineering, e-commerce solutions, data analytics, and cloud services, helping businesses navigate their digital transformation journeys.

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:May 15, 2025

(Q1-2025)

% Change Since: -15.56%|

Next Earnings Date:Aug 14, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture with strong revenue growth and strategic initiatives balanced by challenges from currency effects and limited public sector exposure in Germany. Diversification and strategic partnerships are key growth drivers.

Q1-2025 Updates

Positive Updates

Revenue and Growth Metrics

Nagarro reported a revenue of €247 million for Q1 2025 and adjusted EBITDA of €30.2 million with an adjusted EBITDA margin of 12.2%.

Deferred Revenue and Exchange Rate Impact

There was a €5.5 million in deferred revenue and significant negative currency effects amounting to a €5 million impact on adjusted EBITDA.

Industry Diversification

Best performing industry was management consulting and business information. Diversification across industries and clients with top five clients accounting for about 15% of revenue.

Strategic Initiatives

Focus on partnerships with Japan Inc., Edge AI and Edge Computing, and German Mittelstand as areas for growth.

Supervisory Board Strengthening

New additions to the Supervisory Board with experienced leaders like Martin Enderle, Hans-Paul Burkner, and Jack Clemens.

Negative Updates

Currency and Deferred Revenue Effects

Negative currency effects and increase in deferred revenue impacted the financial results, with €5 million negative impact on EBITDA due to exchange rates.

Horizontal Tech Pressure

The horizontal tech sector continued to be under pressure, affecting regional performance.

Limited Public Sector Exposure in Germany

Limited direct exposure to public expenditure in Germany, which is an area the company has been trying to address.

Company Guidance

During the Nagarro Q1 2025 Retail Investors Call, key financial metrics were highlighted, showcasing a revenue of €247 million and an adjusted EBITDA of €30.2 million, translating to an adjusted EBITDA margin of 12.2%. The company also experienced deferred revenue growth from €2 million at the end of 2024 to €5.5 million at the close of Q1 2025. A €5 million negative impact on adjusted EBITDA due to currency exchange rate fluctuations was noted, primarily from the reevaluation of intercompany loans and bank deposits. Despite these challenges, the company maintained its guidance for 2025, citing stronger underlying performance than the numbers suggest. Nagarro's Net Promoter Score (NPS) was reported at 69, reflecting high client satisfaction, although with adjusted survey thresholds. The company emphasized its strategic diversification across industries and geographies, with North America holding steady and Central Europe witnessing 8% growth. Additionally, Nagarro has been actively engaging in partnerships and acquisitions to drive further growth, including a focus on Japan's digital transformation opportunities and the burgeoning Edge AI and Edge Computing sectors.

Nagarro SE Financial Statement Overview

Summary

Income Statement

Balance Sheet

Cash Flow

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
946.77M	912.05M	856.34M	546.04M	430.37M	402.43M
	Gross Profit
205.27M	186.51M	199.25M	106.53M	106.93M	96.55M
	EBIT
120.75M	177.63M	120.85M	47.88M	57.81M	44.75M
	EBITDA
128.94M	123.08M	146.06M	70.65M	66.68M	61.80M
	Net Income Common Stockholders
54.34M	52.14M	77.38M	30.00M	18.45M	25.48M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
44.51M	110.12M	115.81M	109.00M	109.35M	44.97M
	Total Assets
342.01M	679.86M	618.14M	524.87M	386.82M	342.01M
	Total Debt
172.56M	323.44M	272.32M	272.60M	237.74M	184.69M
	Net Debt
128.80M	213.32M	162.16M	166.01M	130.00M	140.93M
	Total Liabilities
282.07M	498.75M	453.46M	428.04M	340.29M	282.07M
	Stockholders Equity
50.25M	181.12M	164.68M	96.83M	43.80M	50.25M
Cash Flow		Free Cash Flow
82.98M	58.18M	78.16M	41.28M	65.87M	37.78M
	Operating Cash Flow
88.92M	65.06M	82.30M	43.96M	69.44M	40.87M
	Investing Cash Flow
-19.85M	-63.70M	-44.48M	-52.80M	-10.12M	-8.01M
	Financing Cash Flow
-16.57M	-6.68M	-28.31M	13.00K	6.48M	-17.14M

Nagarro SE Technical Analysis

Technical Analysis Sentiment

Negative

Last Price58.05

Price Trends

50DMA

65.73

Negative

100DMA

74.38

Negative

200DMA

79.80

Negative

Market Momentum

MACD

-2.53

Positive

RSI

35.74

Neutral

STOCH

31.89

Neutral

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 58.05 is below the 20-day moving average (MA) of 62.23, below the 50-day MA of 65.73, and below the 200-day MA of 79.80, indicating a bearish trend. The MACD of -2.53 indicates Positive momentum. The RSI at 35.74 is Neutral, neither overbought nor oversold. The STOCH value of 31.89 is Neutral, 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 (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GFT	79 Outperform	€608.13M	14.16	16.30%	2.16%	8.63%	-3.90%
SAP	71 Outperform	€317.86B	55.42	12.91%	0.86%	10.51%	203.70%
ADS	70 Neutral	€37.75B	36.93	19.28%	0.95%	12.80%	662.68%
NA9	65 Neutral	$799.70M	17.62	21.45%	―	6.49%	-17.67%
Sector *	62 Neutral	$11.80B	10.37	-7.29%	2.91%	7.39%	-7.96%

* Technology Sector Average

Performance Comparison

DE:NA9

Nagarro SE

58.05

-24.15

-29.38%

DE:SAP

SAP SE

272.35

97.11

55.42%

DE:ADS

adidas AG

211.40

-16.20

-7.12%

DE:GFT

GFT Technologies

23.10

-3.26

-12.38%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.