INOD in Focus on Q2 Earnings Beat and Huge Short-Term Price Upside

Innodata Inc. INOD has established itself as a crucial partner in the artificial intelligence (AI) revolution providing high-quality data needed to train advanced language models. This mid-cap data engineering service provider for AI applications reported second-quarter 2025 adjusted earnings per share of $0.20, beating the Zacks Consensus Estimate of $0.11. 

Quarterly revenues of $58.39 million jumped 79% year over year, outpacing the Zacks Consensus Estimate by 3.6%. Buoyed by the strong second-quarter performance, INOD raised its 2025 revenue growth guidance to 45%+ year over year, from its previous forecast of 40%.

Growing AI Applications

INOD is expected to benefit from the massive demand for supplying state-of-the-art data engineering to large language model building and maintenance over the long term. Innodata currently supports five of the seven hyperscalers within the Magnificent 7 domain. Five of these companies raised their 2025 AI-centric capital expenditure on the last-reported earnings conference call. 

The long-term growth of Innodata’s business model is set to be backed by big techs, other big enterprises, industry-specific demand, federal agencies, public relations and healthcare. One of the most promising aspects of INOD’s strategy is its successful customer diversification efforts.

INOD has launched a GenAI Test and Evaluation Platform focused on Large Language Model validation and risk benchmarking. The platform, built on NVIDIA Corp.’s NVDA NIM microservices, enables testing for hallucination, prompt-level adversaries and reliability scoring. 

With MasterClass as the first customer and a broader rollout planned through a global consulting partner in the second half of 2025, the platform positions Innodata to deepen integration with Big Tech’s next wave of GenAI investment.

Favorable Estimate Revisions for INOD Stock

Innodata has an expected revenue and earnings growth rate of 41.9% and -23.6%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has remained the same over the last 30 days. 

INOD has an expected revenue and earnings growth rate of 3.4% and 54.8%, respectively, for next year. The Zacks Consensus Estimate for next-year earnings has improved 2.9% over the last 30 days. 

INOD Stock at Huge Discount to 52-Week High

The stock price of Innodata is currently trading at a discount of 38.6% from its 52-week high. Despite facing tough competition from TaskUs Inc. TASK and Palantir Technologies Inc. PLTR, the stock price of INOD has provided double-digit returns (10.3%) year to date beating the broad-market benchmark — the S&P 500 index. 

INOD currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. 

Robust Short-Term Upside for INOD Shares

The average short-term price target of brokerage firms represents an increase of 53.2% from the last closing price of $43.58. The brokerage target price is currently in the range of $58-$75. This indicates a maximum upside of 72.1% and no downside. Therefore, the risk-reward ratio is extremely beneficial for this stock. 

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This article originally published on Zacks Investment Research (zacks.com).

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