Nexi (BIT:NEXI): Valuation in Focus After Profit Miss and Cautious Margin Outlook

Nexi (BIT:NEXI) shares faced pressure after the company reported quarterly results with core profit coming in just below consensus. The stock dropped sharply as management adopted a more cautious tone regarding margin expansion.

See our latest analysis for Nexi.

After a challenging quarter, Nexi’s share price has been hit hard, sliding nearly 26% so far this year and currently trading around €3.99. Recent calls for caution around margins, together with abandoned M&A plans and a tough payments sector, have weighed on sentiment. The one-year total shareholder return stands at -27%, and the stock’s three- and five-year total returns show a persistent downtrend, signaling that momentum has lost steam in both the short and long term.

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The sharp decline in Nexi’s valuation raises a pressing question for investors: Is the current price a reflection of ongoing struggles, or does it present a real chance to buy before future growth is recognized by the market?

Most Popular Narrative: 38% Undervalued

Nexi’s most widely followed narrative suggests a fair value significantly above its last close at €3.99. This implies the market is currently discounting strong future earnings potential. With a stated fair value of €6.47, the gap reflects investor expectations of margin and earnings growth that could renew optimism if realized.

“Synergy-driven margin improvements, reduced integration costs, and innovative digital service offerings are driving higher profitability and new growth opportunities. Ongoing integration of recent mergers and realization of associated cost synergies, including the reduction of transformation and integration expenses, are expanding EBITDA margins and generating stronger free cash flow, positioning Nexi for enhanced future earnings.”

Read the complete narrative.

Want to know the engine behind this premium valuation? It's not just about market share. The narrative is built on ambitious assumptions for profitability acceleration and efficiency gains. What bold moves underpin this price? Find out which financial leaps are required to justify this valuation.

Result: Fair Value of €6.47 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the loss of key contracts or persistent regional challenges could quickly undermine recent margin gains and threaten Nexi’s optimistic valuation narrative.

Find out about the key risks to this Nexi narrative.

Another View: Multiples Suggest a Different Story

While the fair value narrative suggests Nexi is undervalued, a look at its price-to-earnings ratio sparks caution. Nexi trades at 15.6x earnings, noticeably higher than its peer average of 13.2x and the industry average of 14.5x. This premium suggests the current price already reflects growth hopes, leaving less upside if momentum fades. On the other hand, Nexi's ratio stands below its fair ratio of 20.7x, indicating that the market could pivot and reassess the company more positively if future performance surprises to the upside. Are investors right to price in a recovery, or is patience warranted?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Nexi Narrative

If you see things differently or want to reach your own conclusions, you can dig into the numbers and build a personal take on Nexi in just a few minutes as well with Do it your way.

A great starting point for your Nexi research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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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.

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