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Conduent Inc (CNDT)
NASDAQ:CNDT

Conduent (CNDT) AI Stock Analysis

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Conduent

(NASDAQ:CNDT)

Rating:58Neutral
Price Target:
$2.50
▲( 15.74% Upside)
Conduent's overall performance is constrained by financial challenges and a bearish technical outlook, despite being undervalued. The company's strategic initiatives and new business wins provide optimism, but significant revenue declines and operational inefficiencies remain key concerns.

Conduent (CNDT) vs. SPDR S&P 500 ETF (SPY)

Conduent Business Overview & Revenue Model

Company DescriptionConduent Incorporated provides business process services with capabilities in transaction-intensive processing, analytics, and automation in the United States, Europe, and internationally. It operates through three segments: Commercial Industries, Government Services, and Transportation. The Commercial Industries segment offers business process services and customized solutions to clients in various industries; and end-user customer experience management, transaction processing services, healthcare and human resource, and learning services. The Government Services segment provides government-centric business process services to the United States federal, state, local, and foreign governments for public assistance, program administration, transaction processing, and payment services; medical management and fiscal agent care management services; and government healthcare, payment solutions, child support, and federal services. The Transportation segment offers systems and support comprising mission-critical mobility and payment solutions to government clients. This segment also provides electronic tolling, urban congestion management, and mileage-based user solutions; transit solutions; citation and permit administration, parking enforcement, and curbside demand management solutions; and computer-aided dispatch/automatic vehicle location solutions. Conduent Incorporated was founded in 2016 and is headquartered in Florham Park, New Jersey.
How the Company Makes MoneyConduent makes money primarily through contracts and service agreements with businesses and government agencies across its operating sectors. Its revenue model is based on fees for services rendered, which can be transactional, subscription-based, or project-oriented. Key revenue streams include healthcare and benefit services, transportation solutions like tolling and transit system management, and government and public sector services such as child support payment processing. Conduent's earnings are significantly influenced by long-term contracts and strategic partnerships that facilitate the delivery of its technology-driven solutions to large-scale enterprises and governmental bodies.

Conduent Financial Statement Overview

Summary
Conduent's financial performance indicates significant challenges. Declining revenues highlight sales struggles, while inconsistent profitability and negative cash flow raise sustainability concerns. Improved leverage ratios offer some relief, but overall financial stability is hindered by cash generation issues.
Income Statement
40
Negative
Conduent's TTM gross profit margin stands at 33.7%, a healthy level, but the net profit margin is concerning at 12.7% due to past negative net incomes. Revenue has been on a declining trend, dropping from $4.16 billion in 2020 to $3.35 billion TTM, indicating challenges in maintaining sales growth. EBIT and EBITDA margins show some improvement, but overall profitability remains under pressure.
Balance Sheet
55
Neutral
The debt-to-equity ratio improved to 0.90 in TTM, indicating better leverage management compared to previous years. However, the ROE is positive at 50.8% TTM, but this reflects volatility rather than sustainable profitability. The equity ratio is at 32.3%, suggesting moderate financial stability, but the past high liabilities remain a concern.
Cash Flow
30
Negative
The free cash flow is negative at -$112 million TTM, highlighting cash generation issues. The operating cash flow to net income ratio is negative due to negative operating cash flow, raising alarm on cash efficiency. The free cash flow trajectory has been erratic, and financing cash flows are heavily negative, pointing to liquidity challenges.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
3.36B3.72B3.86B4.14B4.16B
Gross Profit
626.00M570.00M840.00M1.00B954.00M
EBIT
-39.00M105.00M164.00M96.00M25.00M
EBITDA
783.00M43.00M187.00M382.00M380.00M
Net Income Common Stockholders
426.00M-296.00M-182.00M-28.00M-118.00M
Balance SheetCash, Cash Equivalents and Short-Term Investments
366.00M498.00M582.00M415.00M450.00M
Total Assets
2.60B3.16B3.57B4.04B4.26B
Total Debt
829.00M1.49B1.47B1.60B1.72B
Net Debt
463.00M995.00M890.00M1.18B1.27B
Total Liabilities
1.76B2.39B2.65B2.90B3.07B
Stockholders Equity
839.00M771.00M917.00M1.13B1.19B
Cash FlowFree Cash Flow
-106.00M-4.00M-9.00M96.00M22.00M
Operating Cash Flow
-50.00M89.00M144.00M243.00M161.00M
Investing Cash Flow
795.00M-93.00M173.00M-142.00M-134.00M
Financing Cash Flow
-877.00M-81.00M-131.00M-132.00M-74.00M

Conduent Technical Analysis

Technical Analysis Sentiment
Negative
Last Price2.16
Price Trends
50DMA
2.39
Negative
100DMA
3.11
Negative
200DMA
3.48
Negative
Market Momentum
MACD
-0.03
Negative
RSI
44.64
Neutral
STOCH
43.08
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CNDT, the sentiment is Negative. The current price of 2.16 is below the 20-day moving average (MA) of 2.19, below the 50-day MA of 2.39, and below the 200-day MA of 3.48, indicating a bearish trend. The MACD of -0.03 indicates Negative momentum. The RSI at 44.64 is Neutral, neither overbought nor oversold. The STOCH value of 43.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CNDT.

Conduent Risk Analysis

Conduent disclosed 33 risk factors in its most recent earnings report. Conduent 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 1 New Risks
1.
Our use of artificial intelligence involves risks such as potential liability, regulatory issues, competition, and reputational damage. Q4, 2024

Conduent Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
70
Outperform
$685.57M29.0523.13%1.80%3.96%-31.63%
61
Neutral
$11.41B10.19-7.05%2.95%7.46%-10.52%
58
Neutral
$385.16M1.7430.92%-14.38%
UIUIS
56
Neutral
$346.10M192.24%-1.72%82.15%
56
Neutral
$250.65M-73.85%1.15%-9.86%-2426.25%
TLTLS
47
Neutral
$192.53M-38.32%-21.83%-67.07%
XRXRX
42
Neutral
$644.04M-67.27%17.26%-7.49%-575.59%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CNDT
Conduent
2.16
-1.29
-37.39%
TTEC
TTEC Holdings
5.14
-1.17
-18.54%
HCKT
The Hackett Group
24.79
3.62
17.10%
UIS
Unisys
4.87
0.41
9.19%
XRX
Xerox
4.50
-8.07
-64.20%
TLS
Telos
2.45
-1.51
-38.13%

Conduent Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q1-2025)
|
% Change Since: 5.37%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a mixed sentiment. There were strong business wins and strategic progress, particularly in portfolio rationalization and AI-driven initiatives. However, these were tempered by significant revenue declines in key segments and costs associated with a cybersecurity event.
Q1-2025 Updates
Positive Updates
Strong Start to Fiscal Year 2025
Conduent reported adjusted revenue of $751 million and adjusted EBITDA of $37 million with an EBITDA margin of 4.9% for Q1 2025. New business signings improved year-on-year, and the company expects a strong Q2 in sales.
Significant New Business Growth
New business ACV increased by 14% year-over-year to $109 million, and new business TCV surged 96% year-over-year to $280 million, driven by an eight-year deal in the international transit business.
Progress in Portfolio Rationalization
Completed three divestitures in 2024, generating nearly $800 million of net proceeds, and reduced debt by $639 million. Targeting additional $350 million in proceeds from further asset divestitures in 2025.
AI and Technology Investments
Strong progress in leveraging AI for fraud prevention and operational efficiency, with partnerships such as the one with Microsoft leading to significant fraud detection improvements.
Negative Updates
Revenue Decline in Government Segment
Government segment adjusted revenue declined by 16% year-over-year to $216 million, primarily due to the termination of a large government healthcare contract.
Commercial Segment Challenges
Commercial segment adjusted revenue decreased by 4.1% year-over-year, with adjusted EBITDA down 11% due to lower revenue and higher technology costs.
Cybersecurity Event Financial Impact
Incurred $3 million and accrued $22 million of nonrecurring expenses in Q1 2025 related to a cybersecurity event, despite no material operational impact.
Company Guidance
During the Conduent Q1 2025 earnings call, the company reported an adjusted revenue of $751 million and an adjusted EBITDA of $37 million, with an EBITDA margin of 4.9%. New business signings saw a significant year-on-year improvement, with the first quarter new business Annual Contract Value (ACV) up 14% at $109 million and Total Contract Value (TCV) up 96% at $280 million. The net Annual Recurring Revenue (ARR) activity was positive at $116 million, and the qualified ACV pipeline grew to $3.2 billion, up 16% year-over-year. The company also highlighted progress in its portfolio rationalization plan, expecting to generate an additional $350 million in proceeds, surpassing a $1 billion target. Despite an 8.5% decline in adjusted revenue year-over-year, the company remains optimistic about achieving its 2025 exit rate metrics, driven by strategic divestitures, cost efficiency programs, and growth opportunities in AI-driven solutions, particularly in fraud prevention and government services.

Conduent Corporate Events

Executive/Board ChangesShareholder Meetings
Conduent Holds Annual Shareholders Meeting, Key Decisions Made
Neutral
May 21, 2025

On May 20, 2025, Conduent Incorporated held its Annual Meeting of Shareholders where several key decisions were made. Shareholders elected all nominated directors, ratified the selection of PricewaterhouseCoopers LLP as the independent registered public accounting firm for 2025, and approved the 2024 compensation for the company’s Named Executive Officers on an advisory basis.

The most recent analyst rating on (CNDT) stock is a Buy with a $7.00 price target. To see the full list of analyst forecasts on Conduent stock, see the CNDT Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Conduent Reports Q1 2025 Financial Results and Growth
Neutral
May 7, 2025

On May 7, 2025, Conduent announced its first quarter financial results for 2025, reporting a revenue of $751 million and a pre-tax loss of $56 million. Despite the revenue decline compared to the previous year, the company exceeded expectations in adjusted EBITDA margins and saw improvements in new business signings and net ARR activity, indicating potential future growth. Conduent’s liquidity remains strong, and it continues to focus on portfolio rationalization and operational excellence, achieving several milestones in technology solutions and securing significant contracts.

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.