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Concentrix (CNXC)
NASDAQ:CNXC
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Concentrix
(NASDAQ:CNXC)
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Rating:69Neutral
Price Target:
$40.00
▼(-7.30% Downside)
Concentrix's overall stock score is driven by strong financial performance and attractive valuation, but is tempered by bearish technical indicators and mixed earnings call sentiment. The company's growth potential is promising, yet challenges in margin management and leverage need addressing.
Positive Factors
Revenue Growth
Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term expansion and stability.
AI Integration
Successful AI integration enhances service offerings, providing a competitive edge and positioning the company well in the evolving tech landscape.
Cash Flow Management
Efficient cash flow management ensures financial flexibility and supports ongoing investments and operational needs, bolstering long-term resilience.
Negative Factors
High Leverage
High leverage can increase financial risk, potentially limiting strategic options and impacting the company's ability to weather economic downturns.
Margin Challenges
Ongoing margin pressures from operational inefficiencies could hinder profitability, affecting financial performance and investor confidence.
Free Cash Flow Adjustment
Reduced free cash flow expectations may impact the company's ability to fund growth initiatives and return capital to shareholders, affecting long-term growth prospects.
Concentrix (CNXC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.63B
Dividend Yield3.38%
Average Volume (3M)1.03M
Price to Earnings (P/E)―
Beta (1Y)1.16
Revenue Growth3.40%
EPS Growth53.13%
CountryUS
Employees450,000
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)2.95
Shares Outstanding62,257,440
10 Day Avg. Volume1,344,325
30 Day Avg. Volume1,030,562
Financial Highlights & Ratios
PEG Ratio-0.33
Price to Book (P/B)0.72
Price to Sales (P/S)0.30
P/FCF Ratio6.81
Enterprise Value/Market Cap2.98
Enterprise Value/Revenue0.80
Enterprise Value/Gross Profit2.28
Enterprise Value/Ebitda9.28
Forecast
1Y Price Target
$62.00Price Target Upside43.68% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)12.19
Revenue Forecast (FY)$10.16B
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 generates revenue primarily through its customer experience services, which encompass business process outsourcing (BPO), customer support, technical support, and digital marketing solutions. The company operates on a fee-for-service model, charging clients based on the volume of services rendered or through fixed contracts for specific projects. Key revenue streams include multi-channel customer engagement services, analytics services, and technology solutions that help clients optimize their customer interactions. Additionally, partnerships with technology providers and platforms can enhance service offerings and expand market reach, contributing to Concentrix's overall earnings.
Concentrix Earnings Call Summary
Earnings Call Date:Jan 13, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Mar 31, 2026
Earnings Call Sentiment Positive
The call presents a predominantly positive operational and cash-flow story: consistent sequential revenue acceleration, record adjusted free cash flow (FY +32% YoY), AI platform reaching >$60M annualized revenue and breakeven, meaningful commercial traction (pipeline and cross-sell metrics), and active capital returns. Offsetting these positives are a very large noncash goodwill impairment ($1.52B) that produced a GAAP loss, lingering margin pressure versus historical levels, high absolute debt balances, modest full-year revenue guidance (low single-digit growth) and near-term headwinds from proactive business re-shaping (1% low-complex reduction and 2% resolutioning), as well as some vertical declines and competitive pricing in commoditized services. On balance the company emphasizes cash generation, operational improvements and strategic investments that should drive recovery in margins and growth over 2026, so the overall tone is constructive despite meaningful accounting and leverage issues.Q4-2025 Updates
Positive Updates
Quarterly and Annual Revenue Growth
Q4 revenue of ~$2.55B with constant-currency growth of 3.1% (above prior guidance). Full-year fiscal 2025 constant-currency revenue growth of 2.1%, 60 bps above the high end of guidance.
Profitability and Margins (Non-GAAP)
Q4 non-GAAP operating income of $323M and non-GAAP operating margin of 12.7% (sequential increase of 40 bps). FY non-GAAP operating income $1.254B and FY non-GAAP operating margin 12.8%.
Record and Growing Cash Generation
Q4 adjusted free cash flow > $287M (quarterly record). Full-year adjusted free cash flow of $626M, a 32% increase YoY (> $100M increase vs prior year). FY 2026 adjusted free cash flow guidance $630M–$650M.
Capital Return and Balance Sheet Actions
Returned $258M to shareholders in FY25 (repurchases of $169M, ~3.6M shares at ~$47 avg; dividends ~$89M). Reduced net debt by ~$184M in the year; year-end cash $327M, total debt $4.639B and net debt $4.311B; liquidity ~ $1.6B including $1.1B undrawn LOC.
AI Platform Traction (IXSuite)
Launched IXSuite; incremental investment ~ $25M in FY25 and total IX-related spend a bit over $50M in the year. Exited FY25 with > $60M of annualized AI revenue from the platform and achieved breakeven on the AI product line. >40% of new business includes company-owned technology attach.
Quality of Revenue & Commercial Momentum
Reduced non-complex work from 7% to 5% of revenue. Invested ~$95M in capabilities/footprint and moved 4% of onshore business offshore to capture share. Sales/account actions yielded: 6% increase in annual contract value in pipeline exit, 9% increase in new wins YoY, 14% increase in transformational deal values, 23% increase in cross-sell/upsell deals, and 37% increase in new service area deal values. 98% of top 50 clients now buy >1 solution.
Operational Efficiency Investments
Reduced non-billable resources and infrastructure expenditures by close to $100M run-rate exiting Q1 2026 through automation and internal technology; expecting sequential margin improvement through 2026 as duplicate/overcapacity costs are removed.
Negative Updates
Large Noncash Goodwill Impairment
Recorded a $1.52B noncash goodwill impairment in Q4, producing a GAAP net loss for the quarter; impairment reflects trading range of the stock and materially impacts GAAP earnings.
Moderate Revenue Growth Guidance and Proactive Headwinds
FY26 revenue guidance $10.035B–$10.18B implying constant-currency growth of 1.5%–3%. Management expects ~1% revenue impact from further reduction of non-complex work and ~2% impact from resolutioning/optimizing client programs (aggregate ~3% headwind).
Year-over-Year Margin Pressure
Although Q4 margin improved sequentially, FY non-GAAP operating margin (12.8%) is lower than margins seen in prior years (historical ~14%), and management acknowledges YoY margin decreases with improvement expected later in the year.
High Debt Load and Leverage Considerations
Total debt $4.639B and net debt $4.311B at year end; management is targeting deleveraging but balance sheet leverage remains a material consideration for investors.
Vertical-Specific Softness and Competitive Pricing
Q4 declines of ~2% in technology & consumer electronics and healthcare revenue (due to shore movement and volumes). Management described commodity CX pricing as 'very, very competitive', indicating pricing pressure in lower-end services.
Short-Term Implementation Costs and Cash Timing
Onshore-to-offshore migrations and transformational implementations incurred duplicate costs temporarily, causing margin compression during transition. Q1 is expected to have slightly negative adjusted free cash flow (though improved vs prior year).
Company Guidance
Concentrix guided full‑year 2026 reported revenue of $10.035–$10.18 billion (constant‑currency growth 1.5%–3%, ~60 bps FX tailwind), noting ~1% headwind from proactively reducing non‑complex work and ~2% from resolutioning; full‑year non‑GAAP operating income of $1.24–$1.29 billion and non‑GAAP EPS of $11.48–$12.07 (assumes interest ~$257M, ~60.6M diluted shares, ~4.9% to participating securities, ~25% tax rate); adjusted free cash flow is expected to rise to $630–$650 million. For Q1 they forecast $2.475–$2.5 billion revenue (ccy +1.5%–2.5% with ~290 bps FX benefit), non‑GAAP operating income $290–$300 million and non‑GAAP EPS $2.57–$2.69 (assumes interest ~$66M, ~61.5M diluted shares, ~5% to participating securities, ~25% tax), with Q1 adjusted FCF slightly negative but improved year‑over‑year; they expect sequential quarterly operating income improvement, back‑half margin recovery, CapEx around 2–2.5% of revenue, continued incremental go‑to‑market spend (~$25M), share repurchases similar to FY2025, and ongoing focus on debt reduction and mid‑single‑digit growth longer term.Concentrix Financial Statement Overview
Summary
Concentrix shows strong revenue growth and stable profit margins, with efficient cash flow management. However, high leverage and low net profit margins indicate areas for improvement.Income Statement
Concentrix demonstrates strong revenue growth with a TTM increase of 99.6%, indicating robust expansion. Gross profit margins are stable around 35%, and EBIT and EBITDA margins are healthy, reflecting efficient operations. However, the net profit margin is relatively low at 3.25%, suggesting room for improvement in cost management.85
Very Positive
Balance Sheet
The company's debt-to-equity ratio is high at 1.11, indicating significant leverage, which could pose risks if not managed carefully. Return on equity is moderate at 7.57%, showing decent profitability relative to shareholder equity. The equity ratio is stable, suggesting a balanced asset structure.70
Positive
Cash Flow
Operating cash flow is strong, with a healthy ratio to net income, indicating good cash generation capabilities. Free cash flow growth is positive, although the free cash flow to net income ratio suggests some reliance on external financing. Overall, cash flow management appears solid.78
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 9.72B | 9.62B | 7.11B | 6.32B | 5.59B | 4.72B |
| Gross Profit | 3.43B | 3.45B | 2.58B | 2.26B | 1.97B | 1.66B |
| EBITDA | 842.12M | 1.33B | 997.53M | 984.62M | 855.92M | 592.77M |
| Net Income | 316.11M | 251.22M | 313.84M | 435.05M | 405.58M | 164.81M |
Balance Sheet | ||||||
| Total Assets | 12.41B | 11.99B | 12.49B | 6.67B | 5.05B | 5.18B |
| Cash, Cash Equivalents and Short-Term Investments | 538.49M | 429.60M | 516.49M | 157.46M | 183.01M | 156.35M |
| Total Debt | 5.72B | 5.60B | 5.79B | 2.72B | 1.31B | 1.70B |
| Total Liabilities | 8.07B | 7.95B | 8.35B | 3.97B | 2.43B | 2.88B |
| Stockholders Equity | 4.34B | 4.04B | 4.14B | 2.70B | 2.62B | 2.30B |
Cash Flow | ||||||
| Free Cash Flow | 515.81M | 428.73M | 497.48M | 460.70M | 365.10M | 336.28M |
| Operating Cash Flow | 747.15M | 667.49M | 678.01M | 600.72M | 514.18M | 507.61M |
| Investing Cash Flow | -233.00M | -244.27M | -2.11B | -1.84B | -78.65M | -109.22M |
| Financing Cash Flow | -435.90M | -492.53M | 1.80B | 1.24B | -401.87M | -335.22M |
Concentrix Technical Analysis
Positive
43.15
Price Trends
38.60
Positive
43.66
Negative
48.06
Negative
Market Momentum
0.75
Positive
57.64
Neutral
63.49
Neutral
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 43.15 is above the 20-day moving average (MA) of 41.86, above the 50-day MA of 38.60, and below the 200-day MA of 48.06, indicating a neutral trend. The MACD of 0.75 indicates Positive momentum. The RSI at 57.64 is Neutral, neither overbought nor oversold. The STOCH value of 63.49 is Neutral, 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $73.21B | 24.25 | 32.85% | 2.58% | 4.62% | 1.06% | |
79 Outperform | $40.94B | 19.66 | 14.50% | 1.46% | 7.44% | -4.57% | |
78 Outperform | $7.97B | 14.90 | 22.32% | 1.41% | 7.40% | -14.45% | |
73 Outperform | $11.89B | 32.45 | 10.21% | ― | 14.26% | -15.49% | |
69 Neutral | $2.63B | -2.07 | -37.99% | 3.38% | 3.40% | 53.13% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
CNXC
Concentrix
43.15
-6.15
-12.47%
CTSH
Cognizant
84.74
7.54
9.77%
EPAM
Epam Systems
212.61
-24.75
-10.43%
G
Genpact
45.91
0.44
0.97%
INFY
Infosys
18.63
-2.00
-9.69%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.