Concentrix (NASDAQ:CNXC) recently posted an impressive 46.83% year-over-year revenue increase in its Q1 earnings report, taking its quarterly revenue to $2.38 billion. The company is poised for significant growth with its recent debut on the Fortune 500 list, impressive revenue growth, healthy financial standing, solid commitment to AI and technology solutions, and promising market share gain. Despite this, the stock trades at a discount, presenting an optimal buying opportunity.
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Concentrix Portfolio
Concentrix is a global provider of technology-infused customer experience (CX) solutions. It offers a wide range of services, including CX process optimization, technology innovation, front-and back-office automation, analytics, and business transformation services.
Their diverse client portfolio includes entities from industries such as technology and consumer electronics, retail, travel and e-commerce, communications and media, banking, financial services and others, as well as global IPOs, social brands, and banks.
Concentrix’s Recent Financial Results & Outlook
The company recently reported second-quarter results for 2024. Revenue was $2.38 billion, exceeding analysts’ forecasts of $2.35 billion and marking a 47.4% year-over-year increase from $1,614.7 million. Operating income was $150.2 million, lower than the $162.6 million reported in the same quarter of the prior year. The decrease is primarily due to higher intangible loan repayment and planned integration expenses from the company’s recent merger with Webhelp. Nevertheless, non-GAAP operating income was $321.1 million, an improvement from last year’s $220.6 million, with earnings per share (EPS) of $2.69, exceeding the consensus expectations of $2.63.
The company announced a quarterly dividend of $0.3025 per share and a repurchase of 0.7 million shares for $40.3 million.
Management has given guidance for the third quarter, including reported revenues between $2.350 billion and $2.400 billion. Operating income is predicted to be between $172 million and $181 million, with non-GAAP EPS expected to be $2.76 to $3.04.
The expectations for the Fiscal year 2024 include reported revenue between $9.580 billion to $9.675 billion. Operating income is expected to range from $696 million to $724 million, and non-GAAP EPS is projected at $11.40 to $12.07.
What Is the Price Target for CNXC Stock?
Analysts following the company have mostly been constructive on the stock. For instance, Barrington analyst Vincent Colicchio, a five-star analyst according to Tipranks ratings, has given a Buy rating. He points toward a combination of factors impacting Concentrix’s performance and potential for growth. His optimism relies on the company’s impressive revenue growth, surpassing the firm’s and analysts’ consensus forecast, indicating a strong market position.
Concentrix is rated Moderate Buy overall, based on four analysts’ recommendations and price targets. The average price target for CNXC stock is $89.75, representing a potential upside of 36.03% from current levels.
Since becoming a public entity, the stock has seen a significant decline in value, dropping around 58% over the past three years. However, the stock has risen by 11% in the past 90 days. The shares trade toward the lower end of their 52-week price range of $53.87 – $105.18 and demonstrate positive price momentum, trading above the 20-day (61.83) and 50-day (62.00) moving averages. The stock trades at a relative value, with a P/S ratio of 0.46x compared to the Information Technology Services industry average of 1.96x.
Closing Thoughts on CNXC
Concentrix is a global provider of customer experience (CX) solutions enriched with technology and diversified clientele and offers promising growth prospects. Its recent impressive financial results, positive price momentum, and the stock’s relative value suggest it is a compelling opportunity with potential upside.
