Intrinsic Value Nemetschek SE (NEM.DE)

• Previous Close: €73.95
• Intrinsic Value: €100.36
• Upside potential: +36%

Stock Valuation Context

Business Model And Market Position

Nemetschek SE is a leading provider of software solutions tailored for the architecture, engineering, construction (AEC), and media & entertainment industries. The company operates through four distinct segments—Design, Build, Manage, and Media & Entertainment—each addressing specialized needs within its respective market. Its Design segment, featuring brands like Allplan and Vectorworks, focuses on BIM and CAD solutions, serving architects and engineers globally. The Build segment, anchored by Bluebeam, delivers 5D BIM tools for construction workflows, while the Manage segment offers property and facility management software under Crem and Spacewell. The Media & Entertainment segment, driven by Maxon, provides 3D modeling and animation tools for creative professionals. Nemetschek’s diversified portfolio and strong brand recognition position it as a key player in niche software markets, with a focus on innovation and integration across the AEC value chain. Its global footprint, particularly in Europe and the Americas, underscores its competitive edge in a fragmented industry.

Revenue Profitability And Efficiency

Nemetschek reported revenue of €995.6 million in its latest fiscal year, with net income of €175.4 million, reflecting a net margin of approximately 17.6%. The company generated robust operating cash flow of €306.8 million, demonstrating efficient conversion of revenue into cash. Capital expenditures were modest at €13.7 million, indicating a capital-light business model typical of software firms. Diluted EPS stood at €1.52, underscoring consistent profitability.

Earnings Power And Capital Efficiency

The company’s earnings power is supported by high-margin recurring revenue streams, typical of subscription-based software models. Nemetschek’s capital efficiency is evident in its ability to generate significant operating cash flow relative to its revenue base. With a disciplined approach to capital allocation, the company maintains a strong balance between reinvestment and shareholder returns.

Balance Sheet And Financial Health

Nemetschek’s balance sheet is solid, with €205.7 million in cash and equivalents against total debt of €569.9 million. The debt level is manageable given the company’s cash flow generation and low capital intensity. Its financial health is further supported by a market capitalization of €13.6 billion, reflecting investor confidence in its long-term stability.

Growth Trends And Dividend Policy

Nemetschek has demonstrated steady growth, driven by demand for BIM and digital transformation in the AEC sector. The company pays a dividend of €1.03 per share, aligning with its commitment to returning capital to shareholders while retaining sufficient funds for organic and inorganic growth initiatives. Its growth trajectory is supported by cross-selling opportunities and geographic expansion.

Valuation And Market Expectations

With a market cap of €13.6 billion and a beta of 0.696, Nemetschek is perceived as a relatively stable investment within the technology sector. The company’s valuation reflects its leadership in niche software markets and its ability to sustain high margins. Market expectations are likely anchored to its continued execution in expanding its subscription revenue base.

Strategic Advantages And Outlook

Nemetschek’s strategic advantages include its diversified software portfolio, strong brand equity, and focus on BIM and digital workflows. The outlook remains positive, supported by tailwinds in AEC digitization and media content creation. The company’s ability to innovate and integrate acquisitions will be critical to maintaining its competitive position in evolving markets.

Sources

Company filings, Bloomberg