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Nagarro SE (DE:NA9)
XETRA:NA9
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Nagarro SE
(XETRA:NA9)
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Rating:66Neutral
Price Target:
€57.00
▲(10.14% Upside)
Nagarro SE's overall stock score reflects strong financial performance and growth potential, tempered by high leverage and recent cash flow challenges. Technical indicators suggest a bearish trend, while valuation metrics indicate moderate pricing. The earnings call highlighted both operational strengths and currency-related challenges, resulting in a balanced outlook.
Positive Factors
Negative Factors
Nagarro SE (NA9) vs. iShares MSCI Germany ETF (EWG)
Market Cap
$701.20M
Dividend Yield1.9%
Average Volume (3M)33.16K
Price to Earnings (P/E)16.7
Beta (1Y)0.85
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. Volume24,797
30 Day Avg. Volume33,163
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 Cap1.45
Enterprise Value/Revenue1.03
Enterprise Value/Gross Profit4.46
Enterprise Value/Ebitda7.59
Forecast
1Y Price Target
$83.00Price Target Upside60.38% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
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 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: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
51.75
Price Trends
53.23
Negative
56.34
Negative
66.85
Negative
Market Momentum
-0.72
Negative
52.20
Neutral
75.56
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 51.75 is above the 20-day moving average (MA) of 50.55, below the 50-day MA of 53.23, and below the 200-day MA of 66.85, indicating a neutral trend. The MACD of -0.72 indicates Negative momentum. The RSI at 52.20 is Neutral, neither overbought nor oversold. The STOCH value of 75.56 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
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | 541.12M | 25.52 | 14.56% | ― | 24.02% | 74.15% | |
69 Neutral | 756.37M | 40.65 | 3.48% | 4.05% | -0.29% | -48.23% | |
68 Neutral | 519.85M | 21.22 | ― | 1.58% | 11.88% | -3.36% | |
67 Neutral | 462.28M | 11.94 | 17.14% | 2.74% | 5.12% | -20.33% | |
67 Neutral | 656.44M | 53.56 | 6.92% | 0.74% | 12.68% | ― | |
66 Neutral | $701.20M | 16.69 | 20.97% | 1.90% | 5.36% | -24.91% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
Performance Comparison
DE:NA9
Nagarro SE
51.75
-23.49
-31.22%
GB:0N5I
adesso AG
100.60
37.04
58.28%
GB:0O0F
CANCOM SE
24.70
-2.35
-8.69%
GB:0O2W
GFT Technologies
18.18
-3.17
-14.85%
GB:0NJB
SNP Schneider Neureither & Partner AG (Schneider Neureither & Partner AG)
74.20
15.80
27.05%
GB:0W19
DATAGROUP
63.30
23.35
58.45%
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.