Innodata (INOD) AI Stock Analysis

• Market Cap: $2.09B
• Dividend Yield: N/A
• Average Volume (3M): 2.50M
• Price to Earnings (P/E): 52.8
• Beta (1Y): 3.52
• Revenue Growth: 112.54%
• EPS Growth: 1256.46%
• Country: US
• Employees: 6,597
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 0.20
• Shares Outstanding: 31,845,621
• 10 Day Avg. Volume: 3,434,561
• 30 Day Avg. Volume: 2,495,791
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.84
• Enterprise Value/Revenue: 7.68
• Enterprise Value/Gross Profit: 18.53
• Enterprise Value/Ebitda: 37.52
• 1Y Price Target: $69.00
• Price Target Upside: 4.72% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 77 Outperform
• Price Target: $49.00 ▼(-25.63% Downside)

Innodata's strong financial performance and positive earnings call sentiment are the most significant factors driving the score. Technical analysis and valuation present mixed signals, suggesting moderate market conditions. The company's strategic focus on AI and robotics, along with raised revenue guidance, underscores a positive growth outlook.

Positive Factors

Revenue Growth

The significant year-over-year revenue growth indicates strong demand for Innodata's services and products, enhancing its market position and supporting long-term business expansion.

Strategic Focus on AI

By focusing on AI and robotics, Innodata is aligning with industry trends, potentially unlocking new revenue streams and maintaining a competitive edge in the technology sector.

Strong Cash Position

A robust cash position enhances Innodata's ability to invest in growth opportunities, manage debt, and navigate economic uncertainties, ensuring long-term financial stability.

Negative Factors

Increased Operating Expenses

While strategic, increased operating expenses can pressure margins and profitability, requiring careful management to ensure these investments yield expected returns.

Free Cash Flow Efficiency

Improving free cash flow efficiency is crucial for sustaining growth and funding strategic initiatives without over-reliance on external financing.

Operational Efficiency

Enhancing operational efficiency is vital for maintaining profitability and competitive advantage, especially as the company scales its operations.

Innodata Business Overview & Revenue Model

Company Description

Innodata Inc. operates as a global data engineering company in the United States, the United Kingdom, the Netherlands, Canada, and internationally. The company operates through three segments: Digital Data Solutions (DDS), Synodex, and Agility. The DDS segment offers AI-enabled software platforms and managed services to companies that require data for training AI and machine learning (ML) algorithms, and AI digital transformation solutions to help companies apply AI/ML for problems relating to analyzing and deriving insights from documents. This segment provides a range of data engineering support services, including data annotation, data transformation, data transformation, data curation, data hygiene, data consolidation, data compliance, and master data management. The Synodex segment offers an industry platform that transforms medical records into useable digital data with its proprietary data models or client data models. The Agility segment provides an industry platform that provides marketing communications and public relations professionals to target and distribute content to journalists and social media influencers; and to monitor and analyze global news channels, such as print, web, radio, and TV, as well as social media channels. It serves banking, insurance, financial services, technology, digital retailing, and information/media sectors through its professional staff, senior management, and direct sales personnel. The company was formerly known as Innodata Isogen, Inc. and changed its name to Innodata Inc. in June 2012. Innodata Inc. was incorporated in 1988 and is headquartered in Ridgefield Park, New Jersey.

How the Company Makes Money

Innodata generates revenue through a multi-faceted business model that includes service contracts, project-based engagements, and subscription-based solutions. Key revenue streams consist of fees from consulting services, custom software development, and ongoing support for their data management platforms. The company also benefits from partnerships with technology firms and industry leaders, which enhance its service capabilities and market reach. Additionally, Innodata's focus on AI-driven solutions provides opportunities for recurring revenue through software licensing and maintenance fees, which contribute significantly to its overall earnings.

Innodata Financial Statement Overview

Summary

Innodata demonstrates strong financial health with significant revenue growth of 12.77% and a healthy net profit margin of 18.71%. The balance sheet shows low leverage with a debt-to-equity ratio of 0.15 and a high return on equity of 62.48%. Cash flow generation is robust, though there is potential to improve free cash flow efficiency.

Income Statement

Innodata's income statement shows strong revenue growth of 12.77% in the TTM period, indicating a positive trajectory. The company has a healthy net profit margin of 18.71% and a gross profit margin of 31.27%, reflecting efficient cost management. However, the EBIT margin of 13.56% and EBITDA margin of 15.61% suggest room for improvement in operational efficiency.

Balance Sheet

The balance sheet reflects a solid financial position with a low debt-to-equity ratio of 0.15, indicating low leverage. The return on equity is impressive at 62.48%, showcasing strong profitability. The equity ratio of 65.41% suggests a stable capital structure, though the company should monitor its debt levels to maintain financial flexibility.

Cash Flow

Cash flow analysis reveals a robust free cash flow growth rate of 18.80% in the TTM period, highlighting strong cash generation capabilities. The operating cash flow to net income ratio of 1.25 indicates efficient cash conversion. However, the free cash flow to net income ratio of 0.82 suggests that there is room to enhance free cash flow relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	228.14M	170.46M	86.78M	79.00M	69.75M	58.24M
Gross Profit	94.58M	67.07M	31.29M	27.47M	25.73M	19.89M
EBITDA	46.71M	30.13M	5.03M	-6.59M	1.22M	3.54M
Net Income	42.69M	28.66M	-908.00K	-12.01M	-1.80M	617.00K
Balance Sheet
Total Assets	132.62M	113.45M	59.43M	48.04M	59.22M	57.25M
Cash, Cash Equivalents and Short-Term Investments	59.79M	46.90M	13.82M	10.30M	18.90M	17.57M
Total Debt	4.22M	4.66M	5.48M	4.73M	6.31M	7.32M
Total Liabilities	45.98M	50.06M	34.44M	30.00M	32.81M	31.00M
Stockholders Equity	86.72M	63.47M	25.70M	18.77M	29.93M	29.64M
Cash Flow
Free Cash Flow	36.07M	27.27M	339.00K	-7.74M	783.00K	4.25M
Operating Cash Flow	43.80M	35.02M	5.90M	-1.22M	5.15M	5.66M
Investing Cash Flow	-7.73M	-7.74M	-5.07M	-7.03M	-4.37M	-1.38M
Financing Cash Flow	6.91M	6.06M	2.87M	-307.00K	773.00K	2.31M

Innodata Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 65.89
• 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 INOD, the sentiment is Positive. The current price of 65.89 is above the 20-day moving average (MA) of 45.95, above the 50-day MA of 46.42, and above the 200-day MA of 42.88, indicating a bullish trend. The MACD of 5.44 indicates Negative momentum. The RSI at 81.35 is Negative, neither overbought nor oversold. The STOCH value of 95.07 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for INOD.

Innodata Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
INOD	77 Outperform	$2.09B	52.76	73.80%	―	112.54%	1256.46%
FLYW	72 Outperform	1.60B	317.76	0.86%	―	22.20%	0.00%
GDYN	66 Neutral	640.10M	37.33	3.19%	―	22.27%	0.00%
TASK	65 Neutral	1.56B	25.79	11.52%	―	19.04%	24.49%
VYX	50 Neutral	1.77B	-3.79	85.48%	―	-43.28%	15.29%
BBAI	43 Neutral	1.89B	-3.54	-154.12%	―	3.46%	-74.21%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Innodata Corporate Events

Innodata Cleared by DOJ and SEC in Probes

Innodata Inc. announced that both the U.S. Department of Justice and the Securities and Exchange Commission have closed their investigations into the company without recommending any enforcement actions. These investigations were related to a class action lawsuit concerning Innodata’s previous public statements about its artificial intelligence capabilities. The company sees this as a favorable outcome and plans to continue defending itself in the ongoing Securities Class Action lawsuit, for which a motion to dismiss was filed on March 7, 2025.