Nemetschek Receives Bullish Rating Amidst Share Price Decline

Deutsche Bank upgrades Nemetschek to 'Buy', citing oversold sentiment despite a price target cut. Strong 2025 results and a rising dividend contrast with AI and macro fears halving the stock.

In a notable shift of perspective, Deutsche Bank has upgraded its recommendation for Nemetschek from ‘Hold’ to ‘Buy’. This move by analyst Nicolas Herms presents a direct counterpoint to the persistent weakness in the software company's share price. Herms argues that the prevailing market sentiment has become excessively negative, even as he reduced his price target from €100 to €85. The catalyst for this reassessment is a stock that has fallen by half from its peak valuation.

Institutional Confidence and Shareholder Returns

Despite the challenging price action, key institutional investors are maintaining their stakes. BlackRock retains a 5.06% holding, while Amundi recently reported crossing the disclosure threshold with 3.07% of voting rights. Concurrently, Nemetschek is sending a shareholder-friendly signal. The Annual General Meeting on May 21, 2026, is set to approve a dividend of €0.68 per share for fiscal 2025, representing a 23.6% increase over the prior year. This would mark the thirteenth consecutive annual dividend hike.

The Disconnect Between Performance and Valuation

The current situation presents a paradox. The company's operational performance remains robust. For fiscal 2025, revenue grew by 19.7% to €1.19 billion, while EBITDA saw a disproportionate increase of 23.3%. The proportion of recurring revenue reached 92.2%, a figure that significantly enhances the stability of the business model compared to traditional license frameworks. Revenue from subscription and SaaS offerings climbed 51.2% to €858.7 million.

Looking ahead to 2026, management is guiding for organic revenue growth of 14% to 15%, with an EBITDA margin projected between 32% and 33%.

Nevertheless, the share price has lost more than half its value since the record high set in August 2025. This decline is attributed to two primary concerns: fears that agentic AI could undermine the growth model of established software providers over the long term, and a weaker macroeconomic outlook. Herms views this combined pessimism as overblown, pointing to Nemetschek's clear competitive advantages and the potential for future positive estimate revisions.

Upcoming Catalyst and Valuation Context

Even after the significant decline, with shares trading around €64, the stock is not considered cheap and remains well below its 200-day moving average of €96. This context suggests that the previous peak valuation was simply unsustainable, which explains the magnitude of the subsequent correction.

The next critical test will be the Q1 report, scheduled for release on April 30, 2026. If the company's growth momentum aligns with its own forecasts, Deutsche Bank's upgrade could signal the start of a broader market reassessment. Should it falter, however, the upgrade may remain an isolated positive signal within a still-challenged market environment.