Nagarro SE (NA9) AI Stock Analysis

• Market Cap: €985.33M
• Dividend Yield: 1.23%
• Average Volume (3M): 53.35K
• Price to Earnings (P/E): 20.1
• Beta (1Y): 0.83
• Revenue Growth: 5.63%
• EPS Growth: -7.19%
• Country: DE
• Employees: 17,938
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 1.69
• Shares Outstanding: 12,922,297
• 10 Day Avg. Volume: 51,109
• 30 Day Avg. Volume: 53,355
• PEG Ratio: -4.61
• Price to Book (P/B): 4.74
• Price to Sales (P/S): 1.09
• P/FCF Ratio: 13.33
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €93.00
• Price Target Upside: 87.42% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 68 Neutral
• Price Target: €85.00 ▲(71.30% Upside)

Nagarro SE's overall stock score is driven by strong earnings call performance and positive financial trends, despite high leverage and valuation concerns. The technical indicators suggest bullish momentum, but potential overvaluation and market conditions warrant caution.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong business model resilience and ability to adapt to macroeconomic challenges, supporting long-term expansion.

Profitability Improvements

Improved profitability margins reflect operational efficiency and cost management, enhancing long-term financial stability and shareholder value.

Share Buyback Program

The share buyback program demonstrates management's confidence in the company's future prospects and commitment to enhancing shareholder returns.

Negative Factors

High Leverage

High leverage can increase financial risk and limit flexibility, potentially impacting the company's ability to invest in growth opportunities.

Subdued Demand Environment

A subdued demand environment may hinder revenue growth and delay the realization of benefits from new initiatives, affecting long-term performance.

Foreign Exchange Headwinds

Foreign exchange volatility can affect financial results, posing challenges to maintaining stable margins and consistent earnings growth over time.

Nagarro SE Business Overview & Revenue Model

Company Description

Nagarro 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 Money

Nagarro 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 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.

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.

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.00B	971.99M	912.05M	856.34M	546.04M	430.37M
Gross Profit	234.87M	251.69M	186.51M	199.25M	106.53M	106.93M
EBITDA	145.02M	137.55M	123.08M	146.06M	70.65M	66.68M
Net Income	48.79M	49.16M	52.14M	77.38M	30.00M	18.45M
Balance Sheet
Total Assets	750.30M	795.70M	679.86M	618.14M	524.87M	386.82M
Cash, Cash Equivalents and Short-Term Investments	137.26M	197.41M	123.33M	115.81M	109.00M	109.35M
Total Debt	371.93M	384.09M	323.44M	272.32M	272.60M	237.74M
Total Liabilities	577.55M	573.04M	498.75M	453.46M	428.04M	340.29M
Stockholders Equity	172.76M	222.66M	181.12M	164.68M	96.83M	43.80M
Cash Flow
Free Cash Flow	89.13M	79.15M	58.18M	78.16M	41.28M	65.87M
Operating Cash Flow	98.72M	86.52M	65.06M	82.30M	43.96M	69.44M
Investing Cash Flow	-19.46M	-16.84M	-63.70M	-44.48M	-52.80M	-10.12M
Financing Cash Flow	-82.03M	9.86M	-6.68M	-28.31M	13.00K	6.48M

Nagarro SE Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 49.62
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:NA9, the sentiment is Positive. The current price of 49.62 is below the 20-day moving average (MA) of 72.54, below the 50-day MA of 58.49, and below the 200-day MA of 59.85, indicating a bullish trend. The MACD of 6.27 indicates Negative momentum. The RSI at 85.09 is Negative, neither overbought nor oversold. The STOCH value of 91.52 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DE:NA9.

Nagarro SE Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GFT	77 Outperform	€447.01M	11.54	13.78%	2.71%	3.28%	-26.16%
SHF	69 Neutral	€541.12M	25.73	19.08%	―	20.52%	84.19%
D6H	68 Neutral	€529.85M	21.63	15.66%	1.51%	11.88%	-3.36%
NA9	68 Neutral	€985.33M	20.14	24.22%	1.23%	5.63%	-7.19%
COK	64 Neutral	€746.91M	40.14	3.09%	3.68%	-0.61%	-52.28%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
ADN1	56 Neutral	€596.68M	48.66	6.82%	0.85%	12.37%	196.11%

Nagarro SE Corporate Events

Nagarro SE’s Earnings Call: Strong Growth Amid Challenges

Nagarro SE’s recent earnings call conveyed a positive sentiment, underscored by robust revenue and profitability figures. The company showcased significant margins and strategic initiatives like share buybacks, despite facing challenges such as a subdued demand environment and foreign exchange headwinds. Overall, the highlights of the call significantly outweighed the lowlights, indicating a strong performance and an optimistic outlook.

Nagarro SE’s Earnings Call: Mixed Signals and Strategic Shifts

Nagarro SE’s recent earnings call painted a mixed picture for investors. The company showcased impressive revenue performance, client expansion, and operational efficiency. However, these positives were tempered by challenges such as currency impacts and adjustments in financial guidance, resulting in a balanced outlook for the future.