Nordex (XTRA:NDX1) Margin Surge Reinforces Bullish Narrative Despite Premium Valuation

Nordex (XTRA:NDX1) continued its remarkable earnings improvement, with profitability rising at an annual rate of 20.3% over the past five years and a dramatic jump of 384.7% in the latest year. Net profit margins climbed to 1.5%, up from 0.3% a year earlier. Revenue is forecast to grow 7.1% annually, topping the 6.1% pace of the wider German market. With earnings projected to increase 33.7% per year going forward, the company stands out for both ongoing growth and a strong margin turnaround. However, recent share price volatility and premium valuation multiples keep investor sentiment mixed.

See our full analysis for Nordex.

Next up, we will see how these headline numbers hold up against the broader market narratives and whether consensus expectations are put to the test or given fresh validation.

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Service Margins Surge on Contract Retention

• Nordex’s service segment EBIT margin reached 17.7% in Q2, with management targeting 18 to 19% in the next year, powered by nearly 100% service contract retention in Germany.
• According to the analysts' consensus view, recurring, high-margin service revenues are driving a structural shift in profitability.
  • Consensus narrative notes these strong margins and high contract capture rates support Nordex’s potential for multi-year earnings improvement, even as hardware project margins remain cyclical.
  • Analysts highlight the contrast between robust service performance and the risks from international competition and delayed turbine technology investment.

Bulls and bears alike are watching how multi-year service contracts can drive resilience. Read the full Nordex Consensus Narrative. 📊 Read the full Nordex Consensus Narrative.

Order Backlog Hits €14.3 Billion Milestone

• Order intake soared 83% year over year in Q2, pushing the total backlog to €14.3 billion and cementing Nordex’s European market leadership for forward project delivery.
• In the analysts' consensus view, this outsized backlog serves as a springboard for accelerated topline growth through execution.
  • The multi-year backlog, combined with stable supply chains, positions Nordex to convert contracts into revenue and expanding EBITDA margins in the coming quarters.
  • Consensus narrative calls out the growing pipeline as key to offsetting regional and competitive pressures, provided order fulfillment stays on track and margins are defended.

Valuation: Premium Price Meets DCF Upside

• Nordex trades at €26.82 per share, well below its DCF fair value of €41.79, yet its 58.7x Price-to-Earnings Ratio remains sharply higher than the industry’s 22.8x.
• Analysts’ consensus view sees this valuation gap as a real tension point.
  • While strong earnings projections could eventually justify a premium, current multiples demand that growth stays well above the sector for several years to come.
  • At €26.82, shares are also 10% below the 26.81 analyst average price target, challenging investors to weigh robust forecasts against execution and competitive risks.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Nordex on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

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A great starting point for your Nordex research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

See What Else Is Out There

Nordex’s premium valuation and volatile share price highlight the risk that current growth expectations may prove hard to sustain if execution or industry trends falter.

If you want to focus on a margin of safety, use these 840 undervalued stocks based on cash flows to find companies trading below their fair value with more room for upside.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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