Concentrix (CNXC) AI Stock Analysis

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Concentrix

(NASDAQ:CNXC)

77Outperform

Concentrix's strong revenue growth and effective debt management are significant positives, providing a solid foundation in the competitive IT services industry. The stock's attractive valuation further enhances its appeal, while the positive earnings call underscores strategic initiatives and potential growth areas. However, some caution is warranted due to sectoral challenges and debt levels.

Positive Factors

Earnings

Concentrix reported fiscal Q1/25 non-GAAP EPS of $2.79, which exceeded the forecast and the FactSet consensus forecast.

Revenue Growth

The company's strong sales pipeline and new generative AI services should generate sequential revenue growth over the balance of fiscal 2025.

Negative Factors

Financial Forecast

The 12-month price target has been reduced to $54 from $70 due to a reduction in fiscal 2025 revenue, adjusted EBITDA, and non-GAAP EPS forecasts, reflecting slowing growth.

Operating Margin

Guidance for F2Q implies operating margin decelerating from 13.6% in F1Q to 13.4%.

Concentrix (CNXC) vs. S&P 500 (SPY)

Market Cap

$3.12B

Dividend Yield2.6%

Average Volume (3M)1.20M

Price to Earnings (P/E)12.2

Beta (1Y)1.02

Revenue Growth21.67%

EPS Growth-17.91%

CountryUS

Employees450,000

SectorTechnology

Sector Strength49

IndustryInformation Technology Services

Share Statistics

EPS (TTM)3.99

Shares Outstanding63,883,476

10 Day Avg. Volume1,330,041

30 Day Avg. Volume1,204,446

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.30

Price to Cash Flow (P/CF)2.50

P/FCF Ratio2.40

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$64.50

Price Target Upside32.12% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering4

Concentrix Business Overview & Revenue Model

Company DescriptionConcentrix Corporation (CNXC) is a leading global provider of customer experience (CX) solutions and technology. The company operates across multiple sectors, including technology, automotive, financial services, healthcare, consumer electronics, and retail. Concentrix offers a wide range of services designed to enhance customer interactions and optimize business processes, including customer care, sales, technical support, and consulting services. With a presence in numerous countries, the company is committed to delivering innovative and customized solutions to meet the unique needs of its clients.

How the Company Makes MoneyConcentrix makes money primarily through providing outsourced customer experience solutions and business process outsourcing (BPO) services. The company's revenue model is based on long-term contracts with clients who pay for its services, which include customer support, technical support, sales, and back-office processing. Revenue is generated through a combination of fixed-rate contracts, where clients pay a predetermined fee, and variable-rate contracts, where earnings are tied to specific performance metrics or outcomes. Concentrix benefits from economies of scale and a diverse client base across various industries, which helps stabilize its revenue streams. Additionally, the company has strategic partnerships with leading technology providers that enhance its service offerings and contribute to its financial performance.

Concentrix Financial Statement Overview

Summary

Concentrix demonstrates substantial revenue growth and solid cash flow generation, supported by a healthy balance sheet with low leverage. However, declining profitability margins and a decrease in free cash flow present challenges. The company's financial health is stable, but attention to improving profit margins and cash flow efficiency will be crucial for enhancing financial performance.

Income Statement

Positive

Concentrix shows a strong revenue growth trajectory with a 35.2% increase from 2023 to 2024. The gross profit margin for 2024 is 35.9%, indicating efficient cost management. However, the net profit margin decreased to 2.6% from 4.4% in 2023, suggesting rising expenses or other operational challenges. The EBIT and EBITDA margins are stable at around 6.2% for EBIT, but EBITDA margin dropped significantly from 13.7% in 2023 to 6.2% in 2024, indicating potential increased operational or restructuring costs.

Balance Sheet

Very Positive

The company maintains a healthy balance sheet with a low debt-to-equity ratio of 0.0006, showcasing minimal leverage and strong equity position. Return on Equity (ROE) is modest at 6.2%, slightly down from 7.6% in 2023, indicating stable but not high profitability relative to equity. The equity ratio improves to 33.7%, reflecting a solid asset base funded by equity rather than debt.

Cash Flow

Positive

Operating cash flow remains solid at $667 million, but free cash flow decreased by 13.8% compared to 2023. The operating cash flow to net income ratio is strong at 2.66, indicating robust cash generation relative to reported earnings, while free cash flow to net income ratio stands at 1.71, showing effective cash management despite the decrease.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
9.59B	9.62B	7.11B	6.32B	5.59B	4.72B
	Gross Profit
3.27B	3.45B	2.58B	2.26B	1.97B	1.66B
	EBIT
648.38M	596.39M	661.33M	365.54M	301.57M	39.64M
	EBITDA
1.17B	596.39M	971.97M	981.09M	831.92M	579.22M
	Net Income Common Stockholders
269.37M	251.22M	313.84M	435.05M	405.58M	164.81M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
308.00M	240.57M	295.34M	145.38M	182.04M	152.66M
	Total Assets
11.90B	11.99B	12.49B	6.67B	5.05B	5.18B
	Total Debt
460.00K	4.74B	4.94B	2.22B	802.02M	1.15B
	Net Debt
-307.54M	4.50B	4.65B	2.08B	619.98M	992.46M
	Total Liabilities
7.86B	7.95B	8.35B	3.97B	2.43B	2.88B
	Stockholders Equity
4.03B	4.04B	4.14B	2.70B	2.62B	2.30B
Cash Flow		Free Cash Flow
482.45M	428.73M	497.48M	460.70M	365.10M	336.28M
	Operating Cash Flow
715.77M	667.49M	678.01M	600.72M	514.18M	507.61M
	Investing Cash Flow
-234.99M	-244.27M	-2.11B	-1.84B	-78.65M	-109.22M
	Financing Cash Flow
-404.68M	-492.53M	1.80B	1.24B	-401.87M	-335.22M

Concentrix Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price48.82

Price Trends

50DMA

47.70

Positive

100DMA

46.33

Positive

200DMA

52.69

Negative

Market Momentum

MACD

2.29

Negative

RSI

58.34

Neutral

STOCH

52.71

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CNXC, the sentiment is Neutral. The current price of 48.82 is below the 20-day moving average (MA) of 49.42, above the 50-day MA of 47.70, and below the 200-day MA of 52.69, indicating a neutral trend. The MACD of 2.29 indicates Negative momentum. The RSI at 58.34 is Neutral, neither overbought nor oversold. The STOCH value of 52.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CNXC.

Concentrix Risk Analysis

Concentrix disclosed 27 risk factors in its most recent earnings report. Concentrix reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Concentrix Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
G	80 Outperform	$8.27B	16.62	22.15%	1.33%	6.46%	-16.94%
CNXC	77 Outperform	$3.12B	12.22	6.34%	2.60%	21.67%	-17.91%
CTSH	72 Outperform	$34.71B	15.57	16.21%	1.72%	1.98%	7.16%
WNS	72 Outperform	$3.07B	22.27	16.64%	―	1.07%	-13.39%
ASGN	61 Neutral	$2.62B	15.64	9.55%	―	-7.88%	-14.39%
Sector *	57 Neutral	$19.95B	9.66	-12.09%	2.76%	5.40%	-24.89%
DXC	47 Neutral	$2.62B	267.98	-2.46%	―	-5.65%	78.20%

* Technology Sector Average

Performance Comparison

CNXC

Concentrix

48.82

-7.30

-13.01%

CTSH

Cognizant

70.17

2.81

4.17%

Genpact

47.30

17.12

56.73%

ASGN

60.13

-34.69

-36.59%

WNS

66.51

18.96

39.87%

DXC

DXC Technology

14.45

-5.66

-28.15%

Concentrix Earnings Call Summary

Earnings Call Date: Mar 26, 2025 | % Change Since: 6.87% | Next Earnings Date: Jun 25, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong financial performance and strategic advances in AI deployment, contributing to revenue and profitability growth. However, some sectors remain flat, and there are upcoming debt maturities that require attention. Overall, the sentiment leans positive with confidence in growth strategies.

Highlights

Revenue and Profitability Growth

Concentrix Corporation achieved year-over-year revenue growth of 1.3% on a constant currency basis, reaching approximately $2.37 billion, exceeding the high end of expectations. Non-GAAP operating income was $322 million, with a margin increase of 30 basis points to 13.6%.

Gen AI Deployment Success

Concentrix has successfully deployed Gen AI solutions at scale across its operations, covering the majority of its clients. The company has thousands of seats deployed for its IXLO suite, with plans for accretive earnings by the end of fiscal 2025.

Strong Client Growth

Revenue from the top twenty-five clients outpaced the growth rate of the rest of the business, driven by innovation and cross-selling of broader business services.

Improved Cash Flow

Adjusted free cash flow improved by $41 million from the previous year, with a target of $625 million to $650 million for the full year.

Lowlights

Flat Performance in Healthcare and Media

Revenue from healthcare and media & communications sectors was flat year-over-year on a constant currency basis, indicating challenges in these verticals.

Debt Levels and Upcoming Maturity

Total debt stands at $4.9 billion, with a €700 million seller's note due in September 2025, requiring refinancing.

Company Guidance

During the Concentrix Corporation's first quarter 2025 earnings call, guidance was provided on several key financial metrics and strategic initiatives. The company reported a revenue of approximately $2.37 billion, reflecting a year-over-year growth of 1.3% on a constant currency basis, which exceeded expectations. Non-GAAP operating income reached $322 million, with a margin of 13.6%, and adjusted EBITDA was $374 million, yielding a margin of 15.8%. Additionally, non-GAAP net income was $188 million, translating to a non-GAAP EPS of $2.79, showcasing a nearly 9% increase year-over-year. The company also highlighted its adjusted free cash flow usage of $40 million, marking a $41 million improvement from the previous year. For the full fiscal year 2025, Concentrix provided guidance for revenue between $9.49 billion and $9.635 billion, with non-GAAP EPS expected to be between $11.18 and $11.77. The company aims to achieve adjusted free cash flow of $625 million to $650 million. Strategically, Concentrix is focusing on deploying integrated AI solutions and expanding its portfolio of business services to drive long-term growth and margin expansion. The company has also been successful in consolidating its market position and gaining share among its top clients, emphasizing its strength in providing AI solutions and transformative business services.

Concentrix Corporate Events

Shareholder MeetingsBusiness Operations and Strategy

Concentrix Holds Special Meeting to Amend Charter

Neutral

Oct 29, 2024

At a Special Meeting on October 28, 2024, the Company received stockholder approval to amend its Charter, removing the supermajority voting requirement for certain changes. Additionally, the 2020 Plan was revised to increase authorized shares by 3 million and remove the evergreen provision. The meeting also approved potential adjournment to gather more proxies if needed, reflecting active shareholder engagement in shaping company governance.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.