Teleperformance (TEP) AI Stock Analysis

• Market Cap: €3.65B
• Dividend Yield: 7.32%
• Average Volume (3M): 309.25K
• Price to Earnings (P/E): 7.5
• Beta (1Y): 1.34
• Revenue Growth: 9.08%
• EPS Growth: -22.55%
• Country: FR
• Employees: 446,052
• Sector: Services
• Sector Strength: N/A
• Industry: Specialty Business Services
• EPS (TTM): 4.19
• Shares Outstanding: 59,874,367
• 10 Day Avg. Volume: 228,213
• 30 Day Avg. Volume: 309,249
• PEG Ratio: -0.72
• Price to Book (P/B): 1.09
• Price to Sales (P/S): 0.48
• P/FCF Ratio: 3.11
• 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: €86.75
• Price Target Upside: 53.81% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 72 Outperform
• Price Target: €76.00 ▲(34.75% Upside)

Teleperformance's overall stock score is driven by its strong financial performance and attractive valuation, which are offset by bearish technical indicators. The company's robust revenue growth and efficient operations are significant strengths, while the low P/E ratio and high dividend yield suggest undervaluation. However, the current downtrend in technical analysis presents a risk that investors should consider.

Positive Factors

Revenue Growth

Teleperformance's substantial revenue growth indicates a robust growth trajectory, showcasing its ability to expand market reach and enhance product adoption over time.

Cash Generation

Strong cash generation capabilities highlight Teleperformance's efficiency in converting income to cash, providing financial flexibility for reinvestment and debt management.

Operational Efficiency

Enhanced gross profit margins demonstrate Teleperformance's effective cost management, contributing to sustained operational profitability and competitive positioning.

Negative Factors

Rising Debt Levels

Increasing debt levels could strain financial resources and limit strategic flexibility, potentially impacting long-term financial stability if not addressed.

Net Income Fluctuation

Fluctuating net income impacts net profit margins, potentially affecting investor confidence and the company's ability to fund growth initiatives consistently.

Free Cash Flow Volatility

Volatility in free cash flow growth may indicate challenges in cash management, affecting the company's ability to invest in growth opportunities and manage financial obligations.

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 generates revenue primarily through contracts with businesses that outsource their customer service and support functions. The company's revenue model is based on service agreements, where clients pay for the services provided based on the volume of interactions and the complexity of the services rendered. Key revenue streams include performance-based contracts, where Teleperformance earns additional bonuses for achieving specific service-level agreements (SLAs), and dedicated account management, which allows for tailored services to meet client needs. Significant partnerships with major brands and corporations across various industries bolster its earnings, as these relationships often lead to long-term contracts and enhanced service offerings. Additionally, Teleperformance benefits from economies of scale, allowing it to operate efficiently while maintaining competitive pricing.

Teleperformance Financial Statement Overview

Summary

Teleperformance exhibits strong financial health with robust revenue growth and efficient operations. While profitability metrics show strength, the firm must manage its rising debt levels to maintain balance sheet stability. Cash flow generation is a highlight, though some volatility exists. Overall, the financials depict a well-managed company with growth potential and operational stability.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	10.32B	10.28B	8.35B	8.15B	7.12B	5.73B
Gross Profit	2.18B	3.35B	2.60B	1.81B	2.17B	1.76B
EBITDA	1.71B	1.93B	1.61B	1.63B	1.37B	1.04B
Net Income	481.00M	523.00M	592.00M	643.00M	557.00M	324.00M
Balance Sheet
Total Assets	12.10B	12.07B	12.07B	8.89B	8.35B	7.02B
Cash, Cash Equivalents and Short-Term Investments	1.23B	1.10B	882.00M	817.00M	837.00M	1.07B
Total Debt	5.71B	4.91B	5.43B	3.42B	3.50B	3.27B
Total Liabilities	8.14B	7.52B	7.84B	5.22B	5.19B	4.62B
Stockholders Equity	3.95B	4.56B	4.22B	3.67B	3.16B	2.41B
Cash Flow
Free Cash Flow	1.32B	1.59B	1.14B	947.00M	876.00M	694.00M
Operating Cash Flow	1.57B	1.81B	1.38B	1.29B	1.14B	989.00M
Investing Cash Flow	-731.00M	-221.00M	-2.59B	-602.00M	-1.16B	-253.00M
Financing Cash Flow	-437.00M	-1.40B	1.41B	-715.00M	-173.00M	-161.00M

Teleperformance Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 56.40
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• 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 Negative. The current price of 56.4 is below the 20-day moving average (MA) of 62.16, below the 50-day MA of 63.04, and below the 200-day MA of 79.70, indicating a bearish trend. The MACD of -1.50 indicates Positive momentum. The RSI at 35.20 is Neutral, neither overbought nor oversold. The STOCH value of 28.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FR:TEP.

Teleperformance Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ELIS	76 Outperform	$5.75B	15.42	10.25%	1.82%	4.83%	52.47%
SW	75 Outperform	€6.86B	9.85	18.37%	18.51%	1.16%	314.94%
TEP	72 Outperform	€3.65B	7.51	11.73%	7.32%	9.08%	-22.55%
PLX	71 Outperform	€3.41B	12.10	―	2.06%	6.36%	48.73%
GLO	69 Neutral	€773.03M	9.13	19.49%	3.31%	9.51%	26.07%
IDL	56 Neutral	€2.47B	42.75	11.18%	―	18.03%	3.43%
Sector *	55 Neutral	$13.29B	17.42	10.03%	0.93%	7.13%	-12.93%