Innodata Stock To $44?
Innodata (INOD) stock has jumped 17% during the past day, and is currently trading at $62.01. Our multi-factor assessment suggests that it may be time to reduce exposure to INOD stock. We are primarily concerned current valuation and a price of $44 may not be out of reach. We believe there is not much to fear in INOD stock given its overall Strong operating performance and financial condition. But given its Very High valuation, the stock appears Relatively Expensive.
Below is our assessment:
| CONCLUSION | |
|---|---|
| What you pay: | |
| Valuation | Very High |
| What you get: | |
| Growth | Very Strong |
| Profitability | Moderate |
| Financial Stability | Very Strong |
| Downturn Resilience | Moderate |
| Operating Performance | Strong |
| Stock Opinion | Relatively Expensive |
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Let’s get into details of each of the assessed factors but before that, for quick background: With $2.0 Bil in market cap, Innodata provides AI-enabled software platforms and managed services for data engineering, supporting companies in training AI and machine learning algorithms through digital data solutions.
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[1] Valuation Looks Very High
| INOD | S&P 500 | |
|---|---|---|
| Price-to-Sales Ratio | 8.3 | 3.3 |
| Price-to-Earnings Ratio | 59.0 | 23.7 |
| Price-to-Free Cash Flow Ratio | 48.8 | 20.9 |
This table highlights how INOD is valued vs broader market. For more details see: INOD Valuation Ratios
[2] Growth Is Very Strong
- Innodata has seen its top line grow at an average rate of 48.9% over the last 3 years
- Its revenues have grown 74% from $137 Mil to $238 Mil in the last 12 months
- Also, its quarterly revenues grew 19.8% to $63 Mil in the most recent quarter from $52 Mil a year ago.
| INOD | S&P 500 | |
|---|---|---|
| 3-Year Average | 48.9% | 5.6% |
| Latest Twelve Months* | 73.6% | 6.2% |
| Most Recent Quarter (YoY)* | 19.8% | 7.3% |
This table highlights how INOD is growing vs broader market. For more details see: INOD Revenue Comparison
[3] Profitability Appears Moderate
- INOD last 12 month operating income was $40 Mil representing operating margin of 16.9%
- With cash flow margin of 21.5%, it generated nearly $51 Mil in operating cash flow over this period
- For the same period, INOD generated nearly $34 Mil in net income, suggesting net margin of about 14.1%
| INOD | S&P 500 | |
|---|---|---|
| Current Operating Margin | 16.9% | 18.8% |
| Current OCF Margin | 21.5% | 20.5% |
| Current Net Income Margin | 14.1% | 13.1% |
This table highlights how INOD profitability vs broader market. For more details see: INOD Operating Income Comparison
[4] Financial Stability Looks Very Strong
- INOD Debt was $4.7 Mil at the end of the most recent quarter, while its current Market Cap is $2.0 Bil. This implies Debt-to-Equity Ratio of 0.2%
- INOD Cash (including cash equivalents) makes up $74 Mil of $153 Mil in total Assets. This yields a Cash-to-Assets Ratio of 48.3%
| INOD | S&P 500 | |
|---|---|---|
| Current Debt-to-Equity Ratio | 0.2% | 20.4% |
| Current Cash-to-Assets Ratio | 48.3% | 7.2% |
[5] Downturn Resilience Is Moderate
INOD saw an impact slightly better than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.
2022 Inflation Shock
- INOD stock fell 74.4% from a high of $11.19 on 2 November 2021 to $2.86 on 20 December 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 26 May 2023
- Since then, the stock increased to a high of $93.19 on 8 October 2025 , and currently trades at $62.01
| INOD | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -74.4% | -25.4% |
| Time to Full Recovery | 157 days | 464 days |
2020 Covid Pandemic
- INOD stock fell 36.6% from a high of $1.23 on 3 January 2020 to $0.78 on 1 April 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 22 May 2020
| INOD | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -36.6% | -33.9% |
| Time to Full Recovery | 51 days | 148 days |
2008 Global Financial Crisis
- INOD stock fell 76.8% from a high of $6.25 on 7 January 2008 to $1.45 on 21 November 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 11 September 2009
| INOD | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -76.8% | -56.8% |
| Time to Full Recovery | 294 days | 1,480 days |
But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read INOD Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
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