Innodata: Expensive Today But The Growth Story Is Getting Stronger (Rating Upgrade)

Investor Overview 3.03K Followers Follow Summary Innodata upgraded to Buy as client diversification, margin expansion, and AI-driven growth strengthen the investment case. Q2 2026 revenue surged 58% to $92.1M, adjusted EBITDA rose 92%, and gross margin reached 49%, reflecting operational leverage. Client concentration risk has improved but remains material, with two clients contributing 71% of revenue; further diversification is needed. At $55, INOD trades at 45x 2026E and 32x 2027E EPS, but a shift toward proprietary AI datasets and 20%+ growth could justify higher multiples. akinbostanci/E+ via Getty Images In my previous article on Innodata ( INOD ) from July 2025, I found the stock interesting, but I found the risk/reward ratio not yet convincing enough. The stock price was around $49 at the time. Innodata was growing extremely This article was written by Investor Overview 3.03K Followers Follow I'm a passionate investor from the Netherlands with 12 years of stock market experience. My articles usually contain a good overview of important investment criteria. A stock for my portfolio is of interest to me if the company has the following characteristics:1. Companies that are growing in both revenue, earnings and free cash flow.2. Companies that have excellent growth prospects.3. Stocks with favorable valuations.I prefer steadily growing companies with high free cash flow margins, dividend stocks and stocks with generous share repurchase programs.Disclaimer: My articles do not provide financial advice, they reflect my own findings and insights. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.