Teleperformance (TEP) AI Stock Analysis

• Market Cap: €5.06B
• Dividend Yield: 4.97%
• Average Volume (3M): 331.88K
• Price to Earnings (P/E): 9.7
• Beta (1Y): 1.16
• Revenue Growth: 23.19%
• EPS Growth: -14.73%
• Country: FR
• Employees: 446,052
• Sector: Communication Services
• Sector Strength: 84
• Industry: Specialty Business Services
• EPS (TTM): 6.27
• Shares Outstanding: 59,874,367
• 10 Day Avg. Volume: 284,010
• 30 Day Avg. Volume: 331,875
• PEG Ratio: -0.63
• Price to Book (P/B): 1.19
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 3.40
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €122.22
• Price Target Upside: 39.55% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 66 Neutral
• Price Target: €92.00 ▲(5.05%Upside)

Teleperformance has a strong financial foundation with notable revenue and cash flow growth, though rising debt levels need to be managed. Valuation metrics suggest the stock is undervalued and attractive for dividend investors. However, technical indicators point to bearish momentum, which may impact short-term performance.

Positive Factors

Leadership Transition

The appointment of Teleperformance’s largest shareholder as Chairman and the return of Thomas Mackenbrock as number two may speed up the CEO transition and improve alignment of interests.

Leverage and Shareholder Returns

Leverage will fall below 2x, driving optionality for shareholder returns.

Sales Growth

The sequential improvement in like-for-like sales growth could reassure the market and support profitable growth and deleveraging.

Negative Factors

Valuation Concerns

Valuation is very modest with a 4.5x P/E and 20% FCF yield.

Teleperformance Business Overview & Revenue Model

Company Description

Teleperformance SE, together with its subsidiaries, provides outsourced customer and citizen experience management, and related services in France and internationally. The company operates in two segments, Core Services and Digital Integrated Business Services, and Specialized Services. It offers customer and citizen care; technical support; and customer acquisition services, as well as back-office solutions and integrated services, including social media content moderation services and data labeling for automation solutions; and knowledge services in the field of analytics solutions, automated systems, and artificial intelligence. The company also manages business processes, as well as provides digital platform, consulting, and data analysis services; and business process outsourcing services for government agencies. In addition, it offers online interpreting services; visa application management and consulate services for government departments; online healthcare navigation and advocacy services; and accounts receivable credit management services. The company serves automotive, energy and utilities, insurance, public sector, technology, travel and hospitality, and banking and financial services, as well as healthcare, media, retail and e-commerce, crypto, cargo, telecom, and video games industries. Teleperformance SE was incorporated in 1910 and is headquartered in Paris, France.

How the Company Makes Money

Teleperformance makes money primarily through providing outsourced customer experience management services to businesses worldwide. The company's revenue model is based on long-term contracts with clients, where they charge for services rendered, which can include customer support, technical assistance, and digital solutions. Revenue streams are diversified across various sectors, ensuring a stable income base. Teleperformance also benefits from economies of scale, operating numerous contact centers globally, which allows for cost efficiencies and competitive pricing. Significant partnerships with leading technology firms and continuous investment in technology innovation, such as AI and automation, contribute to enhanced service offerings and additional revenue opportunities.

Teleperformance Financial Statement Overview

Summary

Teleperformance shows robust revenue growth and efficient operations, with strong EBIT and EBITDA margins indicating operational profitability. Despite rising net income fluctuations and increasing liabilities, the company maintains a stable equity base and strong cash flow generation capabilities.

Income Statement

Teleperformance has demonstrated substantial revenue growth from $5.36 billion in 2019 to $10.28 billion in 2024, indicating a robust growth trajectory. The gross profit margin has improved, reflecting efficient cost management. However, net income has seen fluctuation, with a decrease in 2024, impacting the net profit margin. The company maintains strong EBIT and EBITDA margins, showcasing operational profitability.

Balance Sheet

The balance sheet shows a stable equity base with stockholders' equity increasing from $2.57 billion in 2019 to $4.56 billion in 2024, indicating growing shareholder value. The debt-to-equity ratio remains moderate, but total debt has increased. The equity ratio is healthy, showing a balanced asset structure. However, rising liabilities could pose a risk if not managed carefully.

Cash Flow

Operating cash flow has consistently increased, demonstrating strong cash generation capabilities. Free cash flow is growing, with a significant increase in 2024. The operating cash flow to net income ratio is favorable, indicating effective conversion of income to cash. However, fluctuations in free cash flow growth rates suggest potential volatility in cash management.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	10.28B	8.35B	8.15B	7.12B	5.73B
Gross Profit	3.35B	2.60B	1.81B	1.50B	1.13B
EBITDA	1.93B	1.61B	1.64B	1.38B	1.05B
Net Income	523.00M	592.00M	643.00M	557.00M	324.00M
Balance Sheet
Total Assets	12.07B	12.07B	8.86B	8.35B	7.02B
Cash, Cash Equivalents and Short-Term Investments	1.10B	882.00M	846.00M	837.00M	1.05B
Total Debt	4.91B	5.43B	3.42B	3.50B	3.27B
Total Liabilities	7.52B	7.84B	5.19B	5.19B	4.62B
Stockholders Equity	4.56B	4.22B	3.67B	3.16B	2.41B
Cash Flow
Free Cash Flow	1.59B	1.14B	947.00M	876.00M	694.00M
Operating Cash Flow	1.81B	1.38B	1.25B	1.11B	952.00M
Investing Cash Flow	-221.00M	-2.59B	-602.00M	-1.16B	-254.00M
Financing Cash Flow	-1.40B	1.41B	-666.00M	-140.00M	-123.00M

Teleperformance Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 87.58
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:TEP, the sentiment is Neutral. The current price of 87.58 is above the 20-day moving average (MA) of 84.85, below the 50-day MA of 87.66, and below the 200-day MA of 87.61, indicating a bearish trend. The MACD of -1.33 indicates Negative momentum. The RSI at 48.90 is Neutral, neither overbought nor oversold. The STOCH value of 75.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for FR:TEP.

Teleperformance Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ELIS	73 Outperform	€5.78B	17.07	9.66%	1.53%	6.13%	27.24%
ELIS	73 Outperform	€5.78B	17.07	9.66%	1.53%	6.13%	27.24%
PLX	68 Neutral	€3.92B	16.67		1.87%	―	―
TEP	66 Neutral	€5.06B	9.65	11.90%	4.97%	23.19%	-14.73%
GLO	65 Neutral	€809.49M	11.08	16.32%	3.24%	15.12%	22.30%
GLO	65 Neutral	€809.49M	11.08	16.32%	3.24%	15.12%	22.30%
SW	65 Neutral	€7.58B	11.20	16.07%	5.12%	6.71%	141.19%
SW	65 Neutral	€7.58B	11.20	16.07%	5.12%	6.71%	141.19%
Sector *	61 Neutral	$40.69B	-0.79	-11.97%	3.78%	2.11%	-69.16%