Concentrix (CNXC) AI Stock Analysis

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Concentrix

(NASDAQ:CNXC)

74Outperform

Concentrix's strong revenue growth, effective debt management, and strategic focus on AI deployment are key strengths. While technical indicators suggest some bearish momentum, the stock's attractive valuation and positive earnings call sentiment support a favorable outlook. Addressing sector-specific challenges and upcoming debt maturities will be crucial for sustained performance.

Positive Factors

Financial Performance

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

Market Position

Over half of its overall client base has Gen AI solutions deployed, which management views as a win-win for customers and Concentrix.

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

Earnings Shortfall

Adjusted EBITDA was 3% less than forecast, indicating a shortfall in expected earnings before interest, taxes, depreciation, and amortization.

Financial Forecast

Reducing fiscal 2025 EPS forecast: We are reducing our fiscal 2025 non-GAAP EPS forecast to $11.48 from $12.01.

Valuation Concerns

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.

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

Market Cap

$3.26B

Dividend Yield2.54%

Average Volume (3M)1.12M

Price to Earnings (P/E)12.8

Beta (1Y)1.05

Revenue Growth21.67%

EPS Growth-17.91%

CountryUS

Employees450,000

SectorTechnology

Sector Strength68

IndustryInformation Technology Services

Share Statistics

EPS (TTM)3.99

Shares Outstanding63,883,476

10 Day Avg. Volume597,102

30 Day Avg. Volume1,119,117

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap2.50

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit2.37

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$64.50

Price Target Upside26.22% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering4

Concentrix Business Overview & Revenue Model

Company DescriptionConcentrix Corporation provides technology-infused customer experience (CX) solutions worldwide. The company provides CX process optimization, technology innovation, front- and back-office automation, analytics, and business transformation services. It also offers customer lifecycle management; customer experience/user experience strategy and design; digital transformation; and voice of the customer and analytics solutions. The company's clients include consumer electronics, technology, e-commerce, and health insurance companies, as well as global IPOs, social brands, and banks. Concentrix Corporation was incorporated in 2009 and is based in Fremont, California.

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 exhibits strong revenue growth and effective debt management. Despite some pressure on profitability metrics, robust cash flow generation provides a buffer against potential risks. Continued focus on margin improvements and maintaining healthy cash reserves will be key to future financial stability.

Income Statement

Positive

Concentrix demonstrates strong revenue growth with a 51.86% increase from 2020 to 2023, indicating robust demand for its services. The gross profit margin and EBIT margin show stability, with a recent TTM gross profit margin of 34.12% and EBIT margin of 6.76%. However, the net profit margin has slightly decreased to 2.81% TTM, reflecting potential cost pressures or increased competition.

Balance Sheet

Positive

The company's balance sheet reflects a strong equity position with an equity ratio of 33.92% TTM. The debt-to-equity ratio has significantly improved to 0.11, suggesting effective debt management. However, the return on equity has declined from 16.15% in 2022 to 6.68% TTM, indicating a drop in profitability relative to shareholders' equity.

Cash Flow

Positive

Concentrix has maintained a healthy operating cash flow with a TTM operating cash flow to net income ratio of 2.66, indicating strong cash generation capabilities relative to net income. The free cash flow has grown from 2022 to TTM, demonstrating effective capital expenditure management. However, fluctuations in cash flow from financing activities suggest potential challenges in external funding.

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

Concentrix Technical Analysis

Technical Analysis Sentiment

Positive

Last Price51.10

Price Trends

50DMA

47.72

Positive

100DMA

47.04

Positive

200DMA

51.29

Negative

Market Momentum

MACD

0.74

Negative

RSI

55.72

Neutral

STOCH

81.97

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CNXC, the sentiment is Positive. The current price of 51.1 is above the 20-day moving average (MA) of 48.73, above the 50-day MA of 47.72, and below the 200-day MA of 51.29, indicating a neutral trend. The MACD of 0.74 indicates Negative momentum. The RSI at 55.72 is Neutral, neither overbought nor oversold. The STOCH value of 81.97 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
G	78 Outperform	$8.69B	17.46	22.15%	1.26%	6.46%	-16.94%
CTSH	76 Outperform	$38.30B	17.24	16.61%	1.56%	4.09%	14.05%
CNXC	74 Outperform	$3.26B	12.79	6.34%	2.54%	21.67%	-17.91%
WNS	72 Outperform	$2.76B	15.37	21.21%	―	-0.64%	30.96%
ASGN	66 Neutral	$2.65B	15.67	8.65%	―	-8.05%	-18.60%
Sector *	60 Neutral	$10.94B	10.58	-7.08%	2.98%	7.52%	-12.04%
DXC	46 Neutral	$2.91B	267.98	-2.46%	―	-5.65%	78.20%

* Technology Sector Average

Performance Comparison

CNXC

Concentrix

51.10

-8.59

-14.39%

CTSH

Cognizant

77.70

12.31

18.83%

Genpact

49.71

17.91

56.32%

ASGN

51.95

-46.22

-47.08%

WNS

59.69

10.95

22.47%

DXC

DXC Technology

16.07

-3.64

-18.47%

Concentrix Earnings Call Summary

Earnings Call Date:Mar 26, 2025

(Q1-2025)

% Change Since: 12.60%|

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.

Q1-2025 Updates

Positive Updates

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.

Negative Updates

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.