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Nemetschek (XTRA:NEM) Reports Strong Q2 Earnings, Is The 21% Undervalued View Justified?

Simply Wall St · 1d ago

Nemetschek stock reacts to Q2 2026 earnings jump

Nemetschek (XTRA:NEM) is back in focus after reporting second quarter 2026 earnings with higher sales, revenue and net income, alongside increased earnings per share from continuing operations.

See our latest analysis for Nemetschek.

The strong Q2 report has arrived after a sharp short term rebound in Nemetschek's share price, with a 24% 7 day share price return and 22% 30 day share price return. However, the year to date share price return has fallen 26% and the 1 year total shareholder return has declined 48%, which points to improving momentum from a weaker longer term backdrop.

If Nemetschek's recent swing has you reassessing the sector, it could be a good moment to broaden your search and review 56 AI infrastructure stocks

The rebound in Nemetschek after its Q2 results puts you at a crossroads. Is this a fresh entry point that fairly reflects the new earnings picture, or does it make more sense to wait for a cheaper valuation reset?

Most Popular Narrative: 21% Undervalued

Nemetschek's most followed narrative sets a fair value of €85.08 per share, compared with the latest close at €67.20. This frames the recent Q2 reaction in a very different light.

Strong momentum in transitioning customers from perpetual licenses to SaaS/subscription models (with recurring revenue now at record highs and subscription/SaaS revenue growing at ~75%) enhances revenue visibility, increases customer retention, and provides operating leverage that supports both revenue and margin growth.

Read the complete narrative.

Want to see what sits behind that recurring revenue story? The narrative leans heavily on future revenue expansion, higher margins and a premium earnings multiple to reach its fair value.

Result: Fair Value of €85.08 (UNDERVALUED)

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

However, Nemetschek's story can change quickly if integration of deals like HCSS drags on margins or if international expansion results in more volatile revenue than expected.

Find out about the key risks to this Nemetschek narrative.

Another View: Nemetschek looks expensive on earnings multiples

The narrative and fair value estimate suggest Nemetschek is undervalued at €67.20 compared with a €85.08 fair value. On earnings multiples, the picture is less generous. The stock trades on a P/E of 33.3x versus 27.1x for peers, 21.9x for the wider European software group and a fair ratio of 24.9x.

This higher multiple means you are paying more for each euro of Nemetschek earnings than for peers or the level implied by the fair ratio. This could leave less room for error if growth or margins fall short. Which set of assumptions do you trust more when putting fresh capital to work?

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

XTRA:NEM P/E Ratio as at Jul 2026
XTRA:NEM P/E Ratio as at Jul 2026

Next Steps

With sentiment on Nemetschek clearly mixed after Q2, it makes sense to move quickly and review the full picture of 3 key rewards and 1 important warning sign

Looking for more investment ideas beyond Nemetschek?

If Nemetschek's Q2 update has sharpened your focus, it is worth lining up a few fresh ideas that fit different portfolio needs using the Simply Wall Street Screener.

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.