William Blair analyst Maggie Nolan has maintained their neutral stance on TIXT stock, giving a Hold rating on July 21.
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Maggie Nolan’s rating is based on several factors impacting TELUS International’s financial performance. The company reported a notable increase in revenue, driven by growth in data, AI, and CX solutions, as well as a one-time favorable contract impact. However, despite this revenue growth, the adjusted EBITDA saw a significant decline due to wage inflation and increased work complexity, which has put pressure on the company’s operating margins.
Management has reiterated its guidance for 2025, but the outlook suggests a weaker second half of the year than previously expected. While there is robust demand for AI and consulting services, and future growth is anticipated from AI deployments, the current challenges in maintaining margins and the need for cost optimizations contribute to the Hold rating. The company’s efforts to manage labor costs and invest in workforce management are positive steps, but the immediate financial pressures warrant a cautious approach.
In another report released on July 21, National Bank also downgraded the stock to a Hold with a $4.00 price target.
Based on the recent corporate insider activity of 63 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of TIXT in relation to earlier this year.