Nemetschek (ISIN: DE0006452907) is one of the leading providers of software solutions for the construction and media industries—a German hidden champion. With its specialized brands, the Munich-based company covers the entire life cycle of construction projects – from planning and execution to the operation of buildings – and complements this portfolio with software for the media and entertainment industry. At its core, it benefits massively from the digitalization of the construction industry. Its software solutions consistently focus on recurring revenue from subscription and SaaS models. International expansion, technological innovations, and AI provided additional fuel for imagination. Until fall 2025, this combination alone created unparalleled euphoria. The stock price constantly reached new all-time highs, but the rally seems to be over.
Source: Stock price
One possible explanation for this clearly lies in the high valuation level, which investors are increasingly questioning. They are therefore taking profits, especially on potential AI losers. “Software eats the world” and “AI eats software” are key narratives. However, this is not yet reflected in the operating figures. Most recently, the annual forecast, which was revised upward for the first half of 2025, was confirmed once again with the Q3 figures. In addition, the company is actively pursuing acquisitions and benefiting from intact megatrends. In short, double-digit growth could still be possible in the long term. The question is whether the champion offers a real buy-the-dip opportunity after a 44 percent sell-off. The following Nemetschek stock analysis reveals more.
Company profile – construction software
The Nemetschek Group specializes in specialized software solutions for the entire value chain of the construction and real estate industry, as well as for media and entertainment. Nemetschek stands for the end-to-end digitalization of complex, project-based industries, particularly the construction and real estate sectors. It positions itself not as an individual software provider, but rather as a technology partner that accompanies the entire life cycle of a building – from initial planning to execution and operation. The goal is to make processes more efficient, transparent, and better connected.
Source: StocksGuide AI
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The group covers different phases of a project and is structured into four clearly defined segments.
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Design
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Build
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Manage
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Media
The Design segment focuses on the early phases of construction and infrastructure projects. Here, Nemetschek offers software for architecture, planning, and modeling, particularly in the area of Building Information Modeling (BIM). Its customers primarily include architects, engineers, and planning offices. And although construction projects are cyclical, the segment itself is strongly characterized by recurring revenues. It also represents the entry point for customers into the Group's ecosystem. In 2024, this area made the largest contribution to revenue, accounting for 49 percent.
In the Build segment, on the other hand, the focus is on the execution and construction phase. This is the software group's second-largest division in terms of revenue, accounting for 34 percent of total revenue. The solutions support construction companies in project management, collaboration on the construction site, document management, and increasingly in mobile and cloud-based applications. The segment benefits particularly from the digitalization of construction and shows high growth rates and strong profitability. With an EBITDA margin of almost 38 percent, no other segment has recently come close to this level of earnings.
With a 12 percent share of sales, the Media division ranked third. It is similarly profitable to the Build segment, but is aimed at customers in the media, visualization, and entertainment sectors. It includes software for 3D animation, visual effects, and digital content. This business is less directly linked to the construction industry and offers the group a certain degree of diversification. However, it is more dependent on investment cycles and external market influences.
The smallest segment, with a 5 percent share of sales, is “Manage.” It covers the operation and use phase of buildings. This involves software for facility management, real estate management, and the long-term optimization of buildings during operation. The segment is significantly smaller than “Design and Build,” but is becoming increasingly important as demands for efficiency, sustainability, and transparency rise. There is also a need for profitability. With an EBITDA margin of just under 13 percent, it is the segment with the lowest profitability.
Technologically, the Munich-based company stands for the transition from analog to digital construction planning. It is also successfully making the shift away from traditional licensed software toward cloud, subscription, and increasingly AI-supported solutions. With a high proportion of recurring revenue, Nemetschek combines long-term customer relationships with continuous product development. At the end of the third quarter of 2025, this accounted for around 92 percent of total revenue. Annualized ARR recently exceeded one billion – and rose by almost 22 percent. Artificial intelligence is also being used specifically to identify planning errors earlier, reduce risks, and increase productivity along the entire process chain. The possible areas of application are diverse, which is why AI can also be a catalyst. The strong M&A activity is also striking.
Acquisitions and strategy
For Nemetschek, acquisitions are a targeted strategic tool and not an end in themselves. The group uses acquisitions to close technological gaps, open up new fields of application, and strengthen existing segments in a targeted manner. The focus is clearly on software companies with high growth potential, a strong cloud and SaaS orientation, and a good strategic fit with the existing portfolio.
A key example is the acquisition of GoCanvas in 2024 for around €770 million. The main aim of this acquisition is to significantly expand the Build segment. In particular, Nemetschek is strengthening mobile, cloud-based applications for construction execution and construction site processes. In 2025, the acquisition of Firmus AI marked a step towards artificial intelligence. However, the goal is not to view AI as an isolated function, but to integrate it deeply into existing workflows, for example for automated analysis, error detection, and risk minimization. Acquisitions here serve primarily to build speed and expertise, rather than driving developments exclusively internally.
Source: StocksGuide Charts
However, the sharp rise in intangible assets, particularly goodwill, could be cause for concern. These are covered by rapidly increasing cash flows, however. And despite numerous acquisitions, the number of outstanding shares has not been diluted. Net debt also remains within limits.
Source: StocksGuide AI
A key component of the Group's strategy is the consistent transition to subscription and SaaS models. Nemetschek has been driving this change for several years and is now well advanced. The majority of revenue is now recurring. Investors love this because it reduces dependence on one-off sales and significantly increases the visibility, predictability, and scalability of the business. Short-term transition effects are deliberately accepted in order to achieve more stable growth and higher margins in the long term. At the same time, Nemetschek is pursuing a clear internationalization strategy. Growth outside the domestic market is above the group level, and the focus is specifically on regions with high structural potential. In markets such as India and Saudi Arabia, the group is expanding its local presence in order to be closer to customers and better meet regional requirements. Internationalization not only serves to diversify sales, but also to provide long-term protection against economic fluctuations in individual markets. The Group's strategy follows a clear vision: Nemetschek wants to become the leading open software provider for the entire life cycle of buildings. The focus is on open standards, a networked brand portfolio, and coverage of all project phases. Growth is to be structural, international, and profitable, supported by recurring revenues, technological innovation, and selective acquisitions. In the long term, the company aims to benefit from key megatrends such as digitalization, automation, sustainability, and productivity pressures in the construction industry.
Source: StocksGuide AI
The market in which Nemetschek operates is structurally attractive, but operationally challenging. This is primarily because the construction and real estate industry is highly fragmented, cyclical, and dependent on external factors such as interest rates, regulation, and the economy. Many players have recently been cautious about investing, resulting in projects being postponed or divided into smaller phases. Longer decision-making processes could quickly lead to slower short-term growth in individual segments.
Opportunities and risks of Nemetschek
At the same time, however, this also presents a great opportunity. Productivity pressure in the construction industry is high, and digitalization is no longer a “nice-to-have” but increasingly a necessity. Software for planning, construction, and operation helps to reduce costs, avoid errors, and use resources more efficiently. Those who do without it risk a competitive disadvantage. Above all, however, Nemetschek could benefit from the fact that the digital maturity of many customers is still quite low, which opens up great catch-up potential in the long term. Opportunities also arise from the shift to cloud, SaaS, and AI. Recurring revenues increase stability, while AI functions create real added value, for example through earlier error detection or better decision support. In addition, international growth markets offer additional momentum as infrastructure projects and urbanization progress there.
On the risk side, in addition to the operational challenges already mentioned, macroeconomic uncertainties, geopolitical tensions, and potential trade barriers are the main concerns. Rising tariffs, higher costs, or a further decline in willingness to invest could weigh on demand. Dependence on exchange rates is also a major risk for internationally active corporations. Added to this are integration risks from acquisitions and increased competitive pressure from other software providers and large platforms.
Source: StocksGuide AI
Nemetschek traditionally operates in a highly fragmented competitive environment that is characterized by specialized software providers as well as large, global platform providers. Competitors come from both the traditional CAD/BIM software world and the cloud and SaaS sector. In the design segment, the company competes primarily with established providers such as Autodesk and Bentley Systems, which also offer solutions for architecture, engineering, and construction planning. Nemetschek differentiates itself here through open standards, interoperability between different brands, and a SaaS model strongly focused on recurring revenues. In the build segment, competitors include Trimble and providers of specialized project management and construction site solutions. Nemetschek sets itself apart from them through the integration of mobile and cloud-based workflows, AI-supported functions, and the connection to its own design tools. In the “manage” segment, Nemetschek competes with facility and asset management software, such as that offered by Planon and Accruent. The advantage here lies in seamless integration throughout the entire construction and life cycle. In the media segment, the Nemetschek Group's brands compete with providers of visualization and animation software such as Autodesk, Adobe, and smaller specialist providers. The challenge here is to offer innovative tools that meet both the creativity requirements and efficiency needs of customers.
Source: Revenue TTM
In terms of capitalization and revenue, Autodesk and Adobe are the industry leaders. However, there are signs of headwinds. Only Nemetschek has shown solid share price gains over the past three years. But even here, share price gains are increasingly crumbling. On the one hand, this is because AI could take over more and more functions that were previously performed by CAD/BIM software. It remains to be seen whether this narrative will actually be confirmed. Looking at revenue development, only Trimble shows weaknesses in growth.
The latest Nemetschek quarterly figures from September 2025
In the third quarter of 2025, Nemetschek continued its strong growth while also improving its profitability. Revenue rose by 16 percent, driven primarily by the subscription and SaaS business, which now forms the core of the group. Annual recurring revenue grew faster than total revenue and exceeded the one billion euro mark for the first time. This underscores the high visibility and predictability of the business. At the same time, operating profit grew disproportionately. EBITDA grew significantly faster than revenue, increasing the margin to over 32 percent in the quarter. Earnings per share also rose significantly, showing that growth is directly benefiting shareholders and is not being eroded by rising costs. The only downside, however, is that growth has slowed noticeably compared to the previous quarter. At the end of the first half of the year, revenue growth of almost 19 percent was still being reported.
Source: Financial data
In the Design segment, Nemetschek once again achieved double-digit revenue growth of 11.6 percent. The main drivers were subscription and SaaS revenues, as well as targeted multi-year contracts to help customers transition to the new model more quickly. The margin remained solid despite the effects of the transition and external special charges. The Build segment developed particularly dynamically, once again growing very strongly at 26.6 percent, even though the basis for comparison from the previous year was higher. Here, Nemetschek also benefited from the acquisition of GoCanvas. The significant increase in the EBITDA margin to 37.7 percent shows that the segment is operating at a high level of profitability despite the integration of new business areas. In the Manage segment, growth was more moderate at 7.3 percent, but profitability improved noticeably. New large orders ensured more stable development and a significantly higher margin of 12.7 percent than in the previous year (7.2 percent). The Media segment, on the other hand, developed more cautiously, as can be seen from the decline in revenue of -0.3 percent. This is primarily due to external effects and customers' reluctance to invest. Adjusted for special effects, this segment could also have achieved solid growth. On a positive note, however, profitability not only remained stable, but the EBITDA margin even improved slightly to 37.5 percent in the quarter. Adjusted for special effects, the segment would have achieved solid growth, albeit significantly weaker than the other business areas. The expansion of AI expertise is also strategically important. With the acquisition of Firmus AI, Nemetschek is strengthening its capabilities in automated analysis and early risk detection, particularly in the Build segment.
Nemetschek forecast for 2026
Based on the strong results for the first nine months of 2025, Nemetschek continues to anticipate high revenue growth for the full year, significantly above the market level and driven by both organic growth and acquisitions. Specifically, the company expects currency-adjusted revenue growth of between 20 and 22 percent. A relevant portion of this will come from the acquisition of GoCanvas, which is contributing significantly to growth. However, the majority will continue to come from ongoing business and strong demand for subscription and SaaS solutions. Nemetschek is also confident on the earnings side. Despite the temporary dilutive effect of the GoCanvas acquisition, the Executive Board expects an EBITDA margin of around 31 percent for the full year. It is therefore quite possible that the high level of profitability can be maintained even in a phase of strong growth and ongoing integration. At the same time, Nemetschek points out that the outlook is based on stable economic conditions. Possible burdens from geopolitical tensions, rising tariffs, or subdued investment willingness are not included in the forecast and continue to represent external risk factors for the rest of the year. The same applies to the increasingly strong euro.
Source: Sales and Margin forecast
A similar picture emerges when looking at analysts' forecasts. Sales of EUR 1.2 billion are expected for 2025, which corresponds to growth of just over 20 percent. According to analysts, the net margin will increase to 19.2 percent. In the long term, the growth course should be maintained. Analysts consistently expect double-digit growth. Taking economies of scale into account, the net margin could rise to around a quarter of sales by 2033.
Key figures for Nemetschek from the HGI analysis
The HGI analysis shows that Nemetschek continues to have a strong growth profile with high profitability. With an HGI score of 14 out of 18 points, the company is positioned in the upper range and offers an attractive combination of growth and high margins at a favorable valuation. The main criticism is the moderate growth, which was fueled in part by external acquisitions. But first, let's take a closer look at the highlights of the HGI analysis.
Source: HGI strategy
Nemetschek performs particularly well in terms of gross margin (96 percent) and the Rule of 40 score (58 percent). The latter indicator shows very high operational efficiency coupled with solid revenue growth. Current revenue growth of 25 percent based on the last twelve months is also above average, albeit slightly lower than the margins and the Rule of 40 score. The EV/sales factor of 8.3 is attractive. All three indicators received the maximum score of three points. The remaining indicators in the HGI analysis each received two points. The debt ratio of 0.57 is moderate and leaves room for further investments or acquisitions. Although the PEG ratio of 1.4 is not particularly favorable, it could still be considered fair for a growth stock.
Valuation of Nemetschek
The valuation of Nemetschek shares shows that the market has already priced in the high growth and strong profitability. With an EV/sales ratio of 8.3, the share is in the upper range for software companies. Measured by the expected P/E ratio of 38.5, the share is certainly expensive. The EV/FCF ratio of 25 looks somewhat better. This ratio shows that the stock may be reasonably valued in relation to free cash flow, especially given its high profitability and stable, recurring revenues. Taking into account the expected revenue growth of 20 percent, the valuation could indeed be within the realm of possibility. However, the high growth rates are also distorted by extraordinary inorganic growth.
Source: Dividends
And even though Nemetschek pays dividends, the expected dividend yield of 0.7 percent is rather low. This shows that Nemetschek reinvests most of its cash flow in growth, acquisitions, and product development. The payout ratio is only around one-third of profits. At the same time, the company has established itself as a solid dividend growth stock. Not only is its long history of dividend payments impressive, but so is the continuity of its dividend increases. However, this is not enough to earn it top scorer status in the dividend strategy – mainly due to its low yield.
Source: Price/Earnings
Looking at the history of the valuation, a multiplier of 57 has been paid on average over the last ten years. Currently, we are significantly below that at 43. However, we are still above the 20-year average. There are reasons why the stock was historically highly valued. Not only does the company operate in a megatrend market, but it also generates a large portion of its revenue from subscriptions and SaaS models, which it can increase by double digits. There are also moats due to lock-in effects and industry standards. This captured the imagination of investors. At the time, however, no one realized what AI was really capable of. In the future, artificial intelligence could increasingly deliver the products that Nemetschek programs. Nevertheless, I believe the long-term prospects are not bad. AI could also act as a catalyst here, so the equity story still seems intact. Last but not least, investments in AI and acquisitions could also enable double-digit sales growth rates in the future. In view of these facts, I consider the stock to be quite attractive with a free cash flow multiplier of 25. However, the decisive factor will be the development of sales growth.
Conclusion on Nemetschek
Nemetschek is a fast-growing and profitable company with a clearly focused business model. It relies on recurring subscription and SaaS revenues, international expansion, and technological innovations. The Design and Build segments are driving growth, while the Manage and Media segments round out the portfolio. Strategic acquisitions and the integration of AI further strengthen the group's position. Despite a short-term price correction, the fundamental situation remains robust: the company is financially sound and the long-term growth prospects are attractive. In fact, from a historical perspective, the recent price slump could be an opportunity to buy, provided that AI is not a disruptor and there is little competitive headwind in other areas. In the long term, the megatrends are likely to remain intact. The digitalization of the construction industry is far from complete. This is also indicated by the continued double-digit growth rates.
Source: Target price
The majority of analysts continue to rate Nemetschek shares positively: 54 percent recommend “buy,” 33 percent “hold,” and only 13 percent advise caution. The average price target is €124.95, while the current price is €73.75. This results in a theoretical price potential of around 69 percent over one year. The ratings are based on 22 estimates and thus represent a solid basis for the consensus opinion. Anyone who is also uncertain can set an alert in aktien.guide. A P/E ratio marker of 38 on a 20-year average would be a good indication to take another look at the stock.
The author and/or persons or companies associated with StocksGuide own or may own shares of Nemetschek. This article represents an expression of opinion and does not constitute investment advice. Please note the legal information.
