David Koning, an analyst from Robert W. Baird, maintained the Hold rating on IBEX. The associated price target is $38.00.
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David Koning has given his Hold rating due to a combination of factors impacting IBEX Limited. The company is navigating a complex landscape within the customer care industry, where a significant portion of calls are complex and less likely to be automated away. However, there is still a potential for displacement by generative AI, particularly in specific verticals like retail, which could impact revenue. Despite this, IBEX is leveraging partnerships with AI providers and integrating human elements to maintain a competitive edge.
Furthermore, while the company has shown strong revenue growth, particularly in its digital acquisition business, and has potential for improved EBITDA margins and free cash flow conversion, the overall industry sentiment remains challenging. The company’s pricing strategies and contract structures offer some stability, but the underlying same-store-sales growth is relatively flat. Koning suggests that while the revenue momentum is strong, the risk/reward profile would be more attractive at a lower price point, closer to $30, given the higher risk nature of the investment.
According to TipRanks, Koning is a 5-star analyst with an average return of 13.8% and a 53.00% success rate. Koning covers the Technology sector, focusing on stocks such as Concentrix, TaskUs, and Toast Inc.
In another report released on November 7, RBC Capital also maintained a Hold rating on the stock with a $40.00 price target.