Bank of America Securities analyst Ruplu Bhattacharya reiterated a Hold rating on Concentrix yesterday and set a price target of $61.00.
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Ruplu Bhattacharya has given his Hold rating due to a combination of factors including the anticipated improvement in Concentrix’s margins and the company’s strategic focus on AI applications. While there is an expectation for higher revenues and margins in the latter half of the fiscal year, the impact of generative AI on revenues remains limited in the near term. Additionally, the company faces macroeconomic headwinds and potential risks associated with AI developments, which are balanced by the introduction of new AI-based tools and synergies from the Webhelp acquisition.
Despite the competitive pricing environment and unchanged sales cycles, Concentrix is expected to benefit from its expanded footprint following the Webhelp acquisition, which could help it gain market share. However, the need for investments ahead of program ramps may affect margins, and shifts in client business locations could impact short-term revenues. Overall, the low valuation multiple and potential for improved synergies support the Hold rating, with a price objective set at $61.00.
CNXC’s price has also changed moderately for the past six months – from $45.000 to $55.600, which is a 23.56% increase.