NVNI

We rate Nvni Group Ltd (NVNI) as a Hold with a composite score of 50.0/100 at a current price of $1.18. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in value (77th percentile) and investment (60th percentile), which together account for the majority of the composite score. Offsetting weakness in stability (11th percentile) and momentum (48th percentile) tempers our overall conviction. We assign a Narrow Moat rating (60/100), High uncertainty, and Poor capital allocation.

Key items to watch: the path to profitability. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

Nvni Group Ltd holds a top-quartile position (#0 of 50) within the Services sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 50.0/100 places it at rank #2017 in our full 7,333-stock universe. At $85M in market capitalization, Nvni Group Ltd is a small-cap player in the Services space, which limits certain scale advantages but may allow for more agile strategic execution.

Revenue contraction of -10% combined with momentum at the 48th percentile paints a cautious picture of the near-term business outlook. The market appears to be pricing in continued challenges, and a catalyst for reversal is not clearly visible from current data.

The margin cascade tells an important story: gross margins of 63% (+3.8pp vs sector) narrow to operating margins of 9% (+5.0pp vs sector) and net margins of -40.5%, yielding a gross-to-net conversion rate of -64%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.

At a current price of $1.18, Nvni Group Ltd appears undervalued relative to its fundamentals. Our value factor score of 77/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The stock screens as attractively priced on a majority of these measures, suggesting the market may be underappreciating the underlying fundamentals.

The stock currently trades at EV/EBITDA of 0.8x (discounted to peers), P/S of 0.1x. We evaluate these multiples in the context of both absolute levels and sector-relative positioning to form our valuation view.

We assign a High uncertainty rating to Nvni Group Ltd. Key risk factors include elevated market sensitivity (beta of 1.49), current negative profitability (net margin -40.5%), below-average price stability (11th percentile). The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.

Specific risk factors that inform our assessment include: elevated market sensitivity (beta of 1.49); current negative profitability (net margin -40.5%); below-average price stability (11th percentile). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 11th percentile and quality factor at the 54th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 63% provide a buffer against cost pressures. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile warrants caution and disciplined position management.

We rate Nvni Group Ltd's capital allocation as Poor. Key concerns include negative profitability, weak asset returns (ROA -77.2%). Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — Nvni Group Ltd significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.

Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.

In summary, Nvni Group Ltd receives a Hold rating with a composite score of 50.0/100 (rank #2017 of 7,333). Our quantitative framework assigns a Narrow Moat (60/100, trend: stable), High uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 50/100.

Our analysis supports a neutral stance on Nvni Group Ltd. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.