Teleperformance (TEP) AI Stock Analysis

• Market Cap: €4.13B
• Dividend Yield: 6.1%
• Average Volume (3M): 321.21K
• Price to Earnings (P/E): 8.9
• Beta (1Y): 1.32
• 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: 269,621
• 30 Day Avg. Volume: 321,210
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: €109.73
• Price Target Upside: 59.31% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

• Rating: 72 Outperform
• Price Target: €76.00 ▲(10.34% Upside)

Teleperformance's strong financial performance and attractive valuation are offset by bearish technical indicators. The stock's undervaluation and high dividend yield present a compelling case for income-seeking investors, though caution is advised due to technical weakness.

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 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 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: Negative
• Last Price: 68.88
• 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 68.88 is below the 20-day moving average (MA) of 71.00, below the 50-day MA of 79.05, and below the 200-day MA of 85.26, indicating a bearish trend. The MACD of -2.79 indicates Negative momentum. The RSI at 34.31 is Neutral, neither overbought nor oversold. The STOCH value of 22.77 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
TEP	72 Outperform	€4.13B	8.90	11.73%	6.10%	9.08%	-22.55%
Sector *	57 Neutral	$1.84B	9.34	8.02%	2.47%	5.38%	-37.86%
ELSSF	―	$6.47B	16.31	10.25%	1.84%	―	―
0IX0	―	€908.67M	11.66	19.49%	2.87%	―	―
0QAG	―	€2.61B	48.75	10.24%	―	―	―
0J3F	―	€7.64B	11.48	16.07%	―	―	―
PLX	71 Outperform	€3.78B	16.91		1.93%	―	―