Here's What Analysts Are Forecasting For Nagarro SE (FRA:NA9) After Its Annual Results

Shareholders might have noticed that Nagarro SE (FRA:NA9) filed its annual result this time last week. The early response was not positive, with shares down 2.7% to €69.05 in the past week. Results were roughly in line with estimates, with revenues of €912m and statutory earnings per share of €3.86. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Nagarro

After the latest results, the three analysts covering Nagarro are now predicting revenues of €991.0m in 2024. If met, this would reflect a solid 8.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to expand 18% to €4.62. Before this earnings report, the analysts had been forecasting revenues of €1.00b and earnings per share (EPS) of €4.85 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at €114, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Nagarro, with the most bullish analyst valuing it at €170 and the most bearish at €85.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Nagarro's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 8.6% growth on an annualised basis. This is compared to a historical growth rate of 24% over the past five years. Compare this to the 28 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 8.6% per year. Factoring in the forecast slowdown in growth, it looks like Nagarro is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Nagarro. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Nagarro. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Nagarro going out to 2026, and you can see them free on our platform here..

Plus, you should also learn about the 3 warning signs we've spotted with Nagarro .

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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.