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Nagarro SE (DE:NA9)
XETRA:NA9
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Nagarro SE
(XETRA:NA9)
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Rating:68Neutral
Price Target:
€73.00
▲(15.97% 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
Sustained top-line expansion (17.8% TTM; Q3 +9.4% CC) reflects strong demand for digital engineering services and successful client engagements. Recurring T&M, fixed-price and managed-service contracts plus distributed delivery help stabilize revenue and support durable growth over the next 2–6 months.
Cash Generation
Robust free cash flow growth and a high FCF-to-net-income ratio indicate high-quality earnings and strong cash conversion. This enhances financial flexibility for reinvestment, share buybacks, or debt reduction, supporting the company's strategic options over a multi-month horizon.
Margin Improvement & Efficiency
Material margin expansion and peak adjusted EBITDA point to effective cost controls, productivity gains and improved delivery efficiency. Combined with initiatives like Fluidic Intelligence, these efficiency levers can sustainably lift profitability and competitive positioning over coming quarters.
Negative Factors
High Leverage
Significant leverage (debt/equity ~2.39 and disclosed net leverage ~1.7x) increases refinancing, interest and covenant risk. High leverage reduces balance sheet flexibility to pursue organic investments or weather slower demand, constraining strategic options if macro headwinds persist.
Low Net Profit Margin
Despite healthy gross margins, a low net margin (~4.1%) shows limited earnings conversion after operating costs and non‑operational items. This exposes the company to profit volatility from wage, subcontractor or SG&A swings and means margin recovery must be maintained to improve long-term returns.
Demand & FX Headwinds
A subdued client demand environment combined with persistent currency volatility can depress near-term bookings and compress reported revenue and margins. These structural revenue and translation risks reduce visibility and can limit the durability of recent growth until demand or FX stabilizes.
Nagarro SE (NA9) vs. iShares MSCI Germany ETF (EWG)
Market Cap
€853.52M
Dividend Yield1.29%
Average Volume (3M)53.35K
Price to Earnings (P/E)17.4
Beta (1Y)0.74
Revenue Growth5.63%
EPS Growth-7.19%
CountryDE
Employees17,938
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)1.69
Shares Outstanding12,922,297
10 Day Avg. Volume51,109
30 Day Avg. Volume53,355
Financial Highlights & Ratios
PEG Ratio-4.61
Price to Book (P/B)4.74
Price to Sales (P/S)1.09
P/FCF Ratio13.33
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
€92.70Price Target Upside47.25% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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 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:Nov 14, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Apr 24, 2026
Earnings Call Sentiment Positive
The earnings call presented a strong performance in revenue and profitability, with significant margins and strategic share buyback initiatives. However, challenges such as a subdued demand environment and foreign exchange headwinds were noted. Overall, the highlights significantly outweigh the lowlights, indicating a positive sentiment.Q3-2025 Updates
Positive Updates
Strong Q3 Revenue Growth
Revenue growth reached 9.4% year-over-year at constant currency, tracking to the guidance provided earlier, demonstrating business model strength despite macroeconomic challenges.
Profitability Outperformance
Gross margins came in at 33.1%, over 300 basis points better than guidance. Adjusted EBITDA margins were over 17%, the highest level since 2022, reflecting efficiency measures.
Share Buyback Program
Nagarro announced extinguishing approximately 75% of treasury shares and buying back EUR 20 million worth of stock, indicating confidence in the company's long-term outlook.
Sustainability Rating Improvement
Nagarro's sustainability commitment was validated by an EcoVadis Gold Star rating, placing it in the top 5% of assessed companies.
Negative Updates
Subdued Demand Environment
The demand environment is described as subdued, with challenges such as foreign exchange noise affecting the early stages of benefiting from new initiatives.
Foreign Exchange Headwinds
Significant headwind from foreign exchange rates, especially between the dollar and euro, impacted revenue and adjusted EBITDA, presenting challenges throughout the year.
Company Guidance
During Nagarro SE's Q3 2025 earnings call, the company provided detailed guidance and updates on its financial performance and strategic initiatives. The firm's revenue growth reached 9.4% year-over-year at constant currency, and its gross margin for Q3 was reported at 33.1%, exceeding expectations by over 300 basis points. The adjusted EBITDA margin also surpassed expectations, reaching over 17%, the highest since 2022. This was attributed to efficiency measures and operational discipline. The company is committed to enhancing shareholder returns, announcing the extinguishment of approximately 75% of its treasury shares and a EUR 20 million stock buyback program. Despite a subdued demand environment and foreign exchange challenges, Nagarro maintains its guidance for 2025, emphasizing the potential of its Fluidic Intelligence initiative to drive significant productivity improvements for clients. The company also highlighted its robust liquidity position, with a net leverage ratio of 1.7x and a cash balance of EUR 129.4 million.Nagarro SE Financial Statement Overview
Summary
Nagarro SE shows strong revenue growth and effective equity utilization, but faces challenges with high leverage and moderate profitability margins. Positive cash flow trends support financial stability, but improvements in cost management and debt reduction are needed.Income Statement
Nagarro SE shows a healthy revenue growth rate of 17.8% in the TTM, indicating strong business expansion. The gross profit margin is moderate at 23.02%, while the net profit margin is relatively low at 4.06%, suggesting room for improvement in cost management. The EBIT and EBITDA margins are decent at 9.90% and 13.53%, respectively, reflecting stable operational efficiency.75
Positive
Balance Sheet
The company has a high debt-to-equity ratio of 2.39, indicating significant leverage, which could pose financial risks. However, the return on equity is strong at 20.03%, showing effective use of equity to generate profits. The equity ratio is low, suggesting a reliance on debt financing.60
Neutral
Cash Flow
Nagarro SE demonstrates a solid free cash flow growth rate of 16.11% in the TTM, indicating improved cash generation. The operating cash flow to net income ratio is 0.44, suggesting moderate cash conversion efficiency. The free cash flow to net income ratio is high at 0.90, reflecting strong cash flow relative to net income.70
Positive
| 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
Negative
62.95
Price Trends
72.91
Negative
62.17
Positive
59.69
Positive
Market Momentum
-0.71
Positive
39.39
Neutral
35.86
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 62.95 is below the 20-day moving average (MA) of 69.30, below the 50-day MA of 72.91, and above the 200-day MA of 59.69, indicating a neutral trend. The MACD of -0.71 indicates Positive momentum. The RSI at 39.39 is Neutral, neither overbought nor oversold. The STOCH value of 35.86 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | €503.88M | 14.40 | 13.78% | 2.65% | 3.28% | -26.16% | |
68 Neutral | €853.52M | 17.45 | 24.22% | 1.29% | 5.63% | -7.19% | |
65 Neutral | €836.73M | 48.41 | 3.09% | 3.78% | -0.61% | -52.28% | |
65 Neutral | €596.39M | 22.79 | 19.08% | ― | 20.52% | 84.19% | |
62 Neutral | €591.50M | 26.83 | 13.54% | 1.43% | 7.30% | -15.88% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
56 Neutral | €476.56M | 35.11 | 6.82% | 0.85% | 12.37% | 196.11% |
* Technology Sector Average
DE:NA9
Nagarro SE
62.95
-25.02
-28.44%
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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.