Shares of The NAGA Group AG (XETR: N4G) surged to their highest level in four months after research firm SMC maintained its "BUY" rating while setting a price target that implies 130% upside potential from current levels.

German Fintech NAGA Shares Sees 130% Upside on Merger Synergies

The Hamburg-based fintech company's stock closed at €0.69 on May 27, with SMC Research setting a price target of €1.60. Analysts describe cautious revenue and margin estimates while maintaining confidence in the company's growth trajectory.

As a result, N4G shares on the German stock exchange are up nearly 9% today (Wednesday, May 28, 2025), testing the EUR 0.76 level — the highest since January. If the stock reaches the EUR 1.60 target forecasted by SMC, it would mark the highest value since July 2023.

NAGA reported a 7% revenue increase to €16.4 million in the first quarter of 2025, marking its return to growth after streamlining unprofitable operations in 2024. However, the company's EBITDA fell to €1.0 million from €2.0 million year-over-year, primarily due to increased marketing expenditure of €1.6 million compared to the same period last year.

SMC analyst Holger Steffen noted the company's improved operational metrics, including a 10.5% increase in daily trades per user to 2.3 and a 13.4% rise in copied trades to 945,000. Customer lifetime value increased 14.2% to €3,300, though customer acquisition costs rose 50.3% to €1,200 due to higher marketing spend.

"The increased number of trades and, in particular, the higher volume of copied trades were the main drivers behind the 7% growth in revenue," Steffen wrote in the research note.

Key Performance Indicators

NAGA Merger Synergies and UK Expansion

The analysis highlighted benefits from NAGA's completed merger with Key Way Group, parent company of CAPEX.com, which created a user base of approximately 1.5 million across more than 100 countries. The integration is expected to generate annual cost savings of up to €9 million.

NAGA also acquired Trade Capital UK for GBP 1.24 million in November 2024, providing regulatory authorization to re-enter the British market after withdrawing in 2021. The company estimates the UK opportunity could generate€6.5 million in revenue by 2026 with an EBITDA contribution of €2.5 million.

Financial Projections and Targets

For 2025, NAGA maintains guidance for revenue of €74 million, representing 19% growth, with an EBITDA margin target of 17% compared to 13% in 2024. SMC's estimates are slightly more conservative, projecting revenue of €72.1 million and a 14.7% EBITDA margin for the current year.

The research firm's model shows revenue reaching €225.1 million by 2031 with operating margins of 30%. SMC uses a discount rate of 8.4% and applies a 20% safety discount on target margins in its valuation methodology.

“Despite a distinctly positive EBITDA, the net result was still clearly negative last year due to high scheduled depreciation on investments," the report noted, citing this as a key weakness alongside the company's dependence on volatile capital market conditions.

Financial Performance Comparison Table

Market Position and Risks

NAGA operates a financial "SuperApp" combining social trading, stock investing, cryptocurrency services, and neo-banking features. The platform includes a physical VISA card with automatic crypto conversion and cashback functionality.

SMC rated the forecast risk as "slightly above average" at four points on a six-point scale, citing the volatile capital market environment's substantial impact on NAGA's business results. The firm also noted concerns about the effectiveness of marketing measures and ambitious margin targets for 2025-2026.

The company's shares have traded between €0.30 and €1.14 over the past 12 months, with current levels representing significant recovery from earlier lows.