Innodata (INOD): Reassessing Valuation After Zacks Rank #1 Upgrade and Earnings Estimate Revision

Innodata (INOD) just caught fresh attention after earning a Zacks Rank of #1 Strong Buy, with consensus earnings estimates jumping roughly 14% over the past 3 months and fueling renewed investor interest.

See our latest analysis for Innodata.

That bullish earnings revision comes on top of a sharp move in the stock. Innodata’s share price is now at $59.07 after a 7.34% 1 day share price return, a 43.72% 90 day share price return, and a 3 year total shareholder return of 1,869%, which suggests momentum is still very much on the side of long term holders.

If Innodata’s run has you thinking about what else could surprise to the upside, this is a good moment to explore high growth tech and AI stocks for other fast moving opportunities in the space.

With earnings expectations climbing, a 59% discount to analyst targets, and triple digit multi year returns, investors now face a key question: is Innodata still undervalued, or is the market already pricing in its next leg of growth?

Most Popular Narrative Narrative: 37.0% Undervalued

Compared to Innodata’s last close at $59.07, the most popular narrative sees fair value materially higher, framing today’s price as a sizable discount.

Fair Value Estimate has increased from $86 to $93.75, reflecting a notable upward revision in the company’s projected value.

Revenue Growth assumptions have climbed from 15.05% to 23.46%, suggesting higher expected sales increases than previously forecasted.

Read the complete narrative.

Curious what kind of revenue runway and profit margins are baked into that higher fair value, and what future earnings multiple it all depends on? The narrative unpacks bold growth assumptions, shifting profitability, and a punchy valuation hurdle that Innodata is expected to clear. Want to see exactly how those moving pieces add up to this price tag?

Result: Fair Value of $93.75 (UNDERVALUED)

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

However, heavy reliance on a few large tech clients and rising operating costs could quickly pressure margins if anticipated AI demand falls short.

Find out about the key risks to this Innodata narrative.

Another View: Rich Multiples, Different Story

While the narrative points to a 37% discount to fair value, our DCF view is much harsher. Innodata is trading at $59.07 versus a fair value of just $12.07. That implies the stock is overvalued and raises the question: are investors paying far ahead of fundamentals?

Look into how the SWS DCF model arrives at its fair value.

Build Your Own Innodata Narrative

If you see the story differently or want to dig into the numbers yourself, you can craft a personalized thesis in just minutes: Do it your way.

A great starting point for your Innodata 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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