Nagarro: Considering Increasing My Position

German IT consulting firm Nagarro (OTCPK:NGRRF) is highlighted as a compelling buy following its Q2 2025 results, despite a recent 10% share price decline. The company demonstrates strong revenue growth, solid margins, and a diversified client base, underpinned by a significant €400 million share buyback plan that equates to nearly 75% of its current market capitalization. With an attractive 12.8x P/E valuation and a fair value estimate of €95/share, the stock offers substantial upside potential, supported by its quality and conservative management, notwithstanding macro-related risks.

Analysis

German IT consulting firm Nagarro (NGRRF) is presented as a compelling investment opportunity despite a recent 10% decline in its share price, which the analysis suggests is disconnected from the company's fundamentals. Following its Q2 2025 results, the firm is cited for strong revenue growth and solid margins, supported by a diversified client base. A key factor highlighted is the announcement of a substantial €400 million share buyback program, a figure that represents nearly 75% of Nagarro's current market capitalization, signaling strong management confidence in the stock's value. The company's valuation is described as highly attractive, with a price-to-earnings ratio of 12.8x. This is further supported by a new price target of €65 per share and a fair value estimate of €95 per share, indicating significant potential upside. While the primary risks are identified as macro-related, the report posits that Nagarro's operational quality, profitability, and conservative management style position it to weather market volatility.

Key Decisions for Investors

• Given the attractive 12.8x P/E valuation and the stated fair value of €95/share, investors may view the recent 10% share price drop as a potential buying opportunity, assuming the underlying fundamentals remain robust.
• The €400 million share repurchase plan is a critical catalyst and investors should monitor its execution, as its scale relative to the market cap could provide significant price support and drive shareholder returns.
• It is crucial to weigh the company's strong fundamentals and management confidence against the noted macro-related risks, which could continue to create volatility despite the positive company-specific outlook.