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1. Company Snapshot

1.a. Company Description

Nagarro 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.

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1.b. Last Insights on NA9

Nagarro SE's recent performance was negatively impacted by the challenging economic landscape, with the pan-European STOXX Europe 600 Index experiencing a decline of about 1.4% due to geopolitical tensions and inflation concerns. The company's significant individual investors ownership, with 42% stake, may lead to key decisions being influenced by personal interests rather than long-term strategic goals. Additionally, the strategic business transfer of Notion Edge France, while expanding Nagarro's CX offerings, may also increase operational complexity and costs.

1.c. Company Highlights

2. Nagarro SE's Q3 2025 Earnings: Strong Performance and Bullish Outlook

Nagarro SE reported a strong Q3 2025, with revenue growth accelerating to 9.4% year-over-year at constant currency. The company's adjusted EBITDA margins reached over 17%, the highest level since 2022, driven by efficiency measures such as the margin support program. Gross margin was 33.1%, exceeding guidance by over 300 basis points. While actual EPS was not disclosed, the company's financial performance was robust, with a significant reduction in SG&A expenses, down EUR 12 million sequentially.

Publication Date: Nov -23

📋 Highlights
  • Revenue Growth Acceleration:: Achieved 9.4% year-over-year revenue growth at constant currency, reflecting strong operational momentum.
  • Adjusted EBITDA Margin Expansion:: Margins reached 17%, the highest since 2022, with a target of 18% in the medium term.
  • Gross Margin Surpassing Guidance:: Gross margin hit 33.1%, exceeding guidance by 300 basis points, driven by efficiency programs.
  • Share Buybacks and Capital Allocation:: Completed EUR 52M in buybacks and plans an additional EUR 20M, reflecting disciplined capital use.
  • Fluidic Intelligence Strategy:: AI-driven Fluidic Forge platform aims to unlock productivity gains, with EUR 20M+ revenue expected from Japanese joint ventures by 2027.

Operational Discipline and Client Satisfaction

Nagarro's operational discipline and focus on delivering quantifiable business impact to clients have led to improved client satisfaction scores and a strong pipeline of new high-value contracts. The company's long-term focus on delivering a superior client experience remains the primary driver of its sustained success. Nagarro aims to double its revenues within this decade by doing more for its existing 187 clients that generate over EUR 1 million in revenue each.

Financial Position and Capital Allocation

The company's financial position remains strong, with a cash balance of EUR 129.4 million and a net leverage ratio of 1.7x. Nagarro has outlined a commitment to a disciplined capital allocation policy, including share buybacks, dividends, and M&A. The company has bought back EUR 52 million worth of stock to date and intends to buy back another EUR 20 million. With a P/E Ratio of 21.93 and an EV/EBITDA of 8.58, the market appears to have priced in Nagarro's growth prospects.

Inorganic Growth Strategy and AI Transformation

Nagarro's inorganic growth strategy remains highly disciplined, focused on synergistic tuck-in opportunities to fill specific technological, geographical, and client-specific gaps. The company aims to achieve significant double-digit productivity gains through AI, which will be a key driver of transformation across industries. As Nagarro's CEO believes, "AI will create opportunities for companies like Nagarro, as enterprises need experts to implement and integrate AI solutions."

Growth Prospects and Valuation

Nagarro expects to return to double-digit growth in the medium term, with analysts estimating revenue growth at 6.8% next year. The company's ROE is 20.03%, indicating strong profitability. With a P/S Ratio of 0.91, the market appears to be pricing in Nagarro's growth prospects. The company's Net Debt / EBITDA ratio is 1.84, indicating a manageable debt burden. Overall, Nagarro's strong financial performance, operational discipline, and growth prospects make it an attractive investment opportunity.

3. NewsRoom

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Nagarro awarded Gold Medal for business sustainability by EcoVadis

Dec -02

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Nagarro expands in Japan with the acquisition of Inaho Digital Solutions

Nov -26

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Nagarro's (ETR:NA9) Soft Earnings Are Actually Better Than They Appear

Nov -22

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Nagarro SE (NGRRF) Q3 2025 Earnings Call Highlights: Strong Profitability Amid Soft Demand

Nov -20

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November 2025's European Stocks That May Be Trading Below Estimated Value

Nov -17

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Nagarro releases Q3 2025 results with 9.4% YoY revenue growth in constant currency and 27.2% YoY increase in Adjusted EBITDA; announces share redemption and buyback

Nov -14

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3 European Stocks Estimated To Be Trading Below Intrinsic Value By Up To 39.3%

Nov -06

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European Market: 3 Stocks That Could Be Trading Below Fair Value

Nov -06

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.99%)

6. Segments

Automotive, Manufacturing and Industrial

Expected Growth: 8%

Nagarro SE's 8% growth in Automotive, Manufacturing, and Industrial segments is driven by increasing demand for electric and autonomous vehicles, Industry 4.0 adoption, and rising investments in digital transformation. Additionally, growing need for supply chain optimization, IoT integration, and cybersecurity solutions also contribute to this growth.

Financial Services and Insurance

Expected Growth: 9%

Nagarro SE's 9% growth in Financial Services and Insurance is driven by increasing demand for digital transformation, rising adoption of cloud-based services, and growing need for cybersecurity solutions. Additionally, the segment benefits from the company's expertise in AI-powered analytics, regulatory compliance, and customer experience management, enabling clients to navigate complex financial markets and mitigate risks.

Retail and CPG

Expected Growth: 7%

Nagarro SE's 7% growth in Retail and CPG is driven by increasing e-commerce adoption, rising demand for digital transformation, and growing need for omnichannel experiences. Additionally, the shift towards experiential retail, investments in AI-powered supply chain management, and focus on sustainability also contribute to this growth.

Travel and Logistics

Expected Growth: 11%

Nagarro SE's Travel and Logistics segment growth of 11% is driven by increasing demand for digital transformation in the travel industry, rise of e-commerce and online booking platforms, and growing need for efficient logistics and supply chain management. Additionally, investments in AI, IoT, and data analytics are enhancing operational efficiency and customer experience, further fueling growth.

Life Sciences and Healthcare

Expected Growth: 12%

Nagarro SE's 12% growth in Life Sciences and Healthcare is driven by increasing demand for digital healthcare solutions, growing adoption of cloud-based services, and rising investments in precision medicine and personalized healthcare. Additionally, the need for efficient clinical trials, regulatory compliance, and patient engagement platforms also contribute to this growth.

Public, Non-profit, Education

Expected Growth: 6%

Nagarro SE's 6% growth in Public, Non-profit, and Education segments is driven by increasing demand for digital transformation, need for cost-effective solutions, and government initiatives for digital literacy. Additionally, the rise of online learning platforms, focus on STEM education, and growing adoption of cloud-based services also contribute to this growth.

Energy, Utilities and Bldg Automation

Expected Growth: 10%

Nagarro SE's 10% growth in Energy, Utilities, and Building Automation is driven by increasing demand for renewable energy sources, grid modernization, and smart building technologies. Additionally, rising energy efficiency standards, government incentives, and growing adoption of IoT and AI in buildings are contributing to this growth.

Horizontal Tech

Expected Growth: 13%

Nagarro SE's Horizontal Tech segment growth of 13% is driven by increasing demand for digital transformation, cloud adoption, and cybersecurity services. Additionally, the company's strong presence in emerging markets, strategic partnerships, and investments in innovation are contributing to its growth momentum.

Management Consulting and Business Information

Expected Growth: 8%

Nagarro SE's Management Consulting and Business Information segment growth is driven by increasing demand for digital transformation, cloud adoption, and data analytics. The company's expertise in IT consulting, strategy development, and operational improvement enables clients to navigate complex business environments. Additionally, the growing need for process optimization, cost reduction, and innovation fuels the segment's 8% growth.

Telecom, Media and Entertainment

Expected Growth: 9%

Nagarro SE's 9% growth in Telecom, Media and Entertainment is driven by increasing demand for digital transformation, 5G adoption, and cloud-based services. Additionally, rising consumption of online content, growth in gaming and esports, and investments in cybersecurity and data analytics are contributing to this growth.

7. Detailed Products

Digital Transformation

Nagarro SE provides digital transformation services to help businesses adapt to changing market conditions and stay ahead of the competition.

Cloud Services

Nagarro SE offers cloud services to help businesses migrate, manage, and optimize their cloud infrastructure for improved agility, scalability, and cost savings.

Artificial Intelligence and Machine Learning

Nagarro SE provides AI and ML services to help businesses automate processes, gain insights, and make data-driven decisions.

Cybersecurity

Nagarro SE offers cybersecurity services to help businesses protect themselves from cyber threats and ensure the confidentiality, integrity, and availability of their data.

Data Analytics

Nagarro SE provides data analytics services to help businesses gain insights, optimize operations, and make data-driven decisions.

IT Consulting

Nagarro SE offers IT consulting services to help businesses optimize their IT operations, improve efficiency, and reduce costs.

8. Nagarro SE's Porter Forces

Forces Ranking

Threat Of Substitutes

Nagarro SE operates in a niche market with limited substitutes, but the threat of substitutes is still present due to the evolving nature of the IT industry.

Bargaining Power Of Customers

Nagarro SE's customers are primarily large enterprises, which have limited bargaining power due to the customized nature of the services provided.

Bargaining Power Of Suppliers

Nagarro SE relies on a network of suppliers for various services, but the company's size and reputation mitigate the bargaining power of suppliers.

Threat Of New Entrants

The IT industry is highly competitive, and new entrants can easily disrupt the market with innovative solutions, posing a significant threat to Nagarro SE's market share.

Intensity Of Rivalry

The IT industry is highly competitive, with many established players, which leads to intense rivalry among companies, including Nagarro SE.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 61.95%
Debt Cost 7.52%
Equity Weight 38.05%
Equity Cost 12.74%
WACC 9.51%
Leverage 162.79%

11. Quality Control: Nagarro SE passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Addnode Group

A-Score: 4.3/10

Value: 1.9

Growth: 8.1

Quality: 6.0

Yield: 2.5

Momentum: 4.0

Volatility: 3.3

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Adesso

A-Score: 4.2/10

Value: 5.3

Growth: 7.1

Quality: 3.4

Yield: 0.6

Momentum: 7.0

Volatility: 2.0

1-Year Total Return ->

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Nagarro

A-Score: 4.0/10

Value: 6.3

Growth: 8.1

Quality: 4.8

Yield: 1.9

Momentum: 0.5

Volatility: 2.3

1-Year Total Return ->

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Nayax

A-Score: 3.5/10

Value: 0.2

Growth: 8.1

Quality: 5.1

Yield: 0.0

Momentum: 5.0

Volatility: 2.3

1-Year Total Return ->

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SQLI

A-Score: 2.8/10

Value: 3.3

Growth: 3.6

Quality: 4.1

Yield: 0.0

Momentum: 4.0

Volatility: 2.0

1-Year Total Return ->

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NNIT

A-Score: 2.6/10

Value: 6.3

Growth: 2.0

Quality: 2.7

Yield: 0.0

Momentum: 0.0

Volatility: 4.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

77.45$

Current Price

77.45$

Potential

-0.00%

Expected Cash-Flows