Teleperformance (TEP) AI Stock Analysis

• Market Cap: €5.46B
• Dividend Yield: 4.48%
• Average Volume (3M): 225.31K
• Price to Earnings (P/E): 10.4
• Beta (1Y): 1.13
• Revenue Growth: 23.19%
• EPS Growth: -14.73%
• Country: FR
• Employees: 446,052
• Sector: Communication Services
• Sector Strength: 89
• Industry: Specialty Business Services
• EPS (TTM): 6.27
• Shares Outstanding: 59,874,367
• 10 Day Avg. Volume: 240,494
• 30 Day Avg. Volume: 225,306
• 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: €132.17
• Price Target Upside: 39.21% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 80 Outperform
• Price Target: €105.00 ▲(10.60%Upside)

Teleperformance's stock score is driven primarily by its strong financial performance, characterized by solid revenue growth and operational profitability. The company's valuation is compelling with a low P/E ratio and a high dividend yield. Technical indicators show positive momentum without immediate risks of overbought conditions. However, rising debt levels and some volatility in cash flow management are cautions to watch.

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
	EBIT
1.08B	998.00M	992.00M	859.00M	584.70M
	EBITDA
1.93B	1.61B	1.64B	1.38B	1.05B
	Net Income Common Stockholders
523.00M	592.00M	643.00M	557.00M	324.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.10B	882.00M	846.00M	837.00M	1.05B
	Total Assets
12.07B	12.07B	8.86B	8.35B	7.02B
	Total Debt
4.91B	5.43B	3.42B	3.50B	3.27B
	Net Debt
3.85B	4.55B	2.60B	2.67B	2.27B
	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: Positive
• Last Price: 94.94
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:TEP, the sentiment is Positive. The current price of 94.94 is above the 20-day moving average (MA) of 90.16, above the 50-day MA of 87.96, and above the 200-day MA of 88.67, indicating a bullish trend. The MACD of 0.57 indicates Negative momentum. The RSI at 60.32 is Neutral, neither overbought nor oversold. The STOCH value of 87.31 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FR:TEP.

Teleperformance Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TEP	80 Outperform	€5.46B	10.41	11.90%	4.48%	23.19%	-14.73%
Sector *	61 Neutral	$14.78B	5.89	-4.32%	3.67%	2.75%	-30.30%
ELSSF		$6.34B	15.60	9.66%	2.02%	―	―
0IX0		€749.69M	10.30	16.32%	2.69%	―	―
0QAG		€2.75B	50.57	10.24%	―	―	―
0J3F		€8.33B	12.31	16.07%	4.65%	―	―
PLX	71 Outperform	€4.18B	17.81		1.65%	―	―