Teleperformance (TEP) AI Stock Analysis

• Market Cap: €3.06B
• Dividend Yield: 6.86%
• Average Volume (3M): 309.25K
• Price to Earnings (P/E): 6.1
• Beta (1Y): 1.23
• Revenue Growth: 9.08%
• EPS Growth: -22.55%
• Country: FR
• Employees: 446,052
• Sector: General
• Sector Strength: N/A
• Industry: Specialty Business Services
• EPS (TTM): 6.18
• Shares Outstanding: 59,874,367
• 10 Day Avg. Volume: 228,213
• 30 Day Avg. Volume: 309,249
• PEG Ratio: -2.21
• Price to Book (P/B): 0.89
• Price to Sales (P/S): 0.36
• P/FCF Ratio: 3.08
• 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: €86.00
• Price Target Upside: 36.29% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): 13.97
• Revenue Forecast (FY): €10.25B

• Rating: 62 Neutral
• Price Target: €55.00 ▼(-12.84% Downside)
• Action: Downgraded Date: 03/01/26
• Date: Action: Downgraded 03/01/26

The score is supported by very attractive valuation (low P/E and high dividend yield) and solid underlying cash generation, but is held back by weakening fundamentals (negative 2025 revenue growth, net margin compression, rising leverage) and bearish technical trend (price below key moving averages with negative MACD).

Positive Factors

Consistent free cash flow generation

Teleperformance's persistent FCF (€1.18B in 2025) provides durable internal funding for dividends, capex and debt servicing. Even with an ~11% FCF decline in 2025, multi-year positive cash conversion supports financial flexibility and resilience versus cyclical revenue swings.

Diversified global BPO leadership

A global, multi-sector footprint (telecom, healthcare, finance, e-commerce) and scale in customer experience outsourcing creates durable revenue diversification and client stickiness. Long-term contracts and technology partnerships strengthen competitive position and reduce single-market dependency.

Stable operating margins (EBIT/EBITDA)

Operating-level profitability has remained steady, with EBIT and EBITDA margins showing resilience. This indicates efficient service delivery and pricing power at the operating level, supporting cash generation and the capacity to invest in digital tools that sustain long-term competitiveness.

Negative Factors

Revenue decline in 2025

A contraction in revenue (-1.1% in 2025) signals emerging demand or volume weakness that can erode scale economics. If the trend persists, it may reduce bargaining power with clients, limit operating leverage benefits and constrain sustainable top-line driven profitability over the medium term.

Net margin compression

Net margin deterioration reflects higher costs, financing or tax pressures and reduces retained earnings. Lower net margins shrink the cushion for shocks, weaken free cash flow growth potential, and make dividend and debt coverage more sensitive to further revenue or margin volatility.

Rising leverage and weaker equity base

Higher leverage (D/E ~1.36) increases interest and refinancing risk, reducing strategic flexibility to invest or pursue M&A. Combined with softer earnings and declining equity, the capital structure raises financial vulnerability during downturns and limits the company's buffer for prolonged structural weakness.

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 its business process outsourcing (BPO) services. The company operates on a fee-for-service model, where clients pay for the services rendered based on the volume of interactions, hours worked, or specific projects completed. Key revenue streams include customer care services, technical support, and digital solutions, which encompass artificial intelligence and automation technologies. Additionally, Teleperformance benefits from long-term contracts with major corporations, providing a stable income source. Strategic partnerships with technology providers enhance its service offerings, enabling the company to deliver innovative solutions that attract new clients and retain existing ones, thus contributing positively to its earnings.

Teleperformance Financial Statement Overview

Summary

Operating profitability and free cash flow remain solid (FCF €1.18B in 2025, consistently positive), but fundamentals are trending weaker: revenue turned slightly negative in 2025 (-1.1% YoY), net margin compressed to ~4.9% (from ~7–8% in 2021–2023), and leverage increased (debt-to-equity ~1.36 in 2025).

Income Statement

Revenue expanded strongly from 2020 to 2024, but growth slowed sharply and turned negative in 2025 (-1.1% YoY), signaling a near-term demand/volume headwind. Profitability remains solid for the sector with EBIT margin broadly stable around ~11–12% (2020: ~9.5% to 2025: ~11.3%) and EBITDA margin steady near ~18–20%. However, net margin has compressed versus 2021–2023 levels (down to ~4.9% in 2025 from ~7–8% in 2021–2023), indicating higher costs, financing/tax pressure, or weaker operating leverage.

Balance Sheet

Leverage is meaningful and has ticked up recently: debt-to-equity rose to ~1.36 in 2025 (from ~1.08 in 2024), with total debt increasing to €5.55B while equity declined to €4.10B. Returns on equity are still healthy (roughly ~11–18% over 2020–2025), but have moderated from earlier highs, consistent with softer earnings and/or a heavier capital structure. Overall, the balance sheet is workable but carries elevated financial risk due to above-1x debt-to-equity and the recent deterioration in equity and leverage.

Cash Flow

Cash generation remains a clear strength: free cash flow stayed high at €1.18B in 2025 and has been consistently positive across all years shown. That said, free cash flow declined in 2025 (about -11% YoY) after a strong 2024, and operating cash flow fell notably from €1.81B (2024) to €1.43B (2025). Cash conversion is decent but not perfect—free cash flow is below net income (about ~82% in 2025), suggesting working-capital swings and/or higher cash costs can still create volatility.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	10.21B	10.28B	8.35B	8.15B	7.12B
Gross Profit	1.20B	3.35B	2.60B	1.81B	2.17B
EBITDA	1.89B	1.93B	1.61B	1.63B	1.37B
Net Income	497.00M	523.00M	592.00M	643.00M	557.00M
Balance Sheet
Total Assets	11.48B	12.07B	12.07B	8.89B	8.35B
Cash, Cash Equivalents and Short-Term Investments	1.12B	1.10B	882.00M	817.00M	837.00M
Total Debt	5.55B	4.91B	5.43B	3.42B	3.50B
Total Liabilities	7.38B	7.52B	7.84B	5.22B	5.19B
Stockholders Equity	4.10B	4.56B	4.22B	3.67B	3.16B
Cash Flow
Free Cash Flow	1.18B	1.59B	1.14B	947.00M	876.00M
Operating Cash Flow	1.43B	1.81B	1.38B	1.29B	1.14B
Investing Cash Flow	-737.00M	-221.00M	-2.59B	-602.00M	-1.16B
Financing Cash Flow	-648.00M	-1.40B	1.41B	-715.00M	-173.00M

Teleperformance Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 63.10
• 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 Negative. The current price of 63.1 is above the 20-day moving average (MA) of 51.73, above the 50-day MA of 56.41, and below the 200-day MA of 67.78, indicating a bearish trend. The MACD of -1.34 indicates Negative momentum. The RSI at 44.27 is Neutral, neither overbought nor oversold. The STOCH value of 58.45 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
GLO	76 Outperform	€964.10M	11.73	19.49%	3.03%	9.51%	26.07%
ELIS	76 Outperform	€6.21B	17.23	10.25%	1.88%	4.83%	52.47%
PLX	69 Neutral	€2.30B	8.36	―	2.91%	6.36%	48.97%
TEP	62 Neutral	€3.06B	6.08	11.73%	6.86%	9.08%	-22.55%
SW	61 Neutral	€6.68B	9.75	18.37%	6.20%	1.16%	314.94%
IDL	56 Neutral	€2.59B	44.67	11.18%	―	18.03%	3.43%
Sector *	55 Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%