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Genpact (G)
NYSE:G
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Genpact
(NYSE:G)
80Outperform
Positive Factors
AI Transformation
The company's '3+1' AI transformation plan is driving the company's turnaround over the last year.
Earnings
Genpact reported a strong quarter and guidance was likewise above expectations.
Negative Factors
Traditional BPO Exposure
The company's still-high exposure to traditional BPO remains a concern over the medium-term.
Genpact (G) vs. S&P 500 (SPY)
Market Cap
$8.63B
Dividend Yield1.24%
Average Volume (3M)1.67M
Price to Earnings (P/E)17.2
Beta (1Y)0.93
Revenue Growth6.46%
EPS Growth-16.94%
CountryUS
Employees129,100
SectorTechnology
Sector Strength54
IndustrySoftware
Share Statistics
EPS (TTM)2.85
Shares Outstanding175,669,360
10 Day Avg. Volume1,457,523
30 Day Avg. Volume1,674,872
Financial Highlights & Ratios
PEG Ratio0.22
Price to Book (P/B)N/A
Price to Sales (P/S)1.81
Price to Cash Flow (P/CF)10.60
P/FCF Ratio8.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$58.56Price Target Upside18.66% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
Genpact Business Overview & Revenue Model
Company DescriptionGenpact Ltd. engages in the business process management, outsourcing, shared services, and information outsourcing. It focuses on designing and running intelligent operations and transformation services, which provides digital, consulting and analytics services. The company was founded by Pramod Bhasin in 1997 and is headquartered in Hamilton, Bermuda.
How the Company Makes MoneyGenpact generates revenue through a combination of service contracts with its clients, primarily focusing on long-term engagements for business process outsourcing (BPO), information technology services, and consulting. The company's key revenue streams include fees for managed services, project-based consulting, and implementation of digital solutions. Genpact partners with a wide array of industries such as banking, insurance, healthcare, manufacturing, and consumer goods, tailoring its solutions to meet specific industry needs. Additionally, strategic partnerships with technology providers and software vendors play a significant role in enhancing Genpact's service offerings, thereby contributing to its revenue growth.
Genpact Financial Statement Overview
Summary
Genpact exhibits robust financial health characterized by steady revenue and profit growth, strong operating margins, and improved leverage ratios. The company has effectively managed its cash flows, enhancing its ability to fund operations and growth. While the decrease in net profit margin is a concern, overall, the financial position remains strong with a positive outlook.Income Statement
Genpact has shown consistent revenue growth over the years with a Revenue Growth Rate of 6.48% in the latest year. The Gross Profit Margin stands at a solid 35.44%, reflecting efficient cost management. However, the Net Profit Margin decreased to 10.77% compared to the previous year, mainly due to increased expenses. The EBIT and EBITDA margins are healthy at 14.72% and 14.72% respectively, indicating strong operating performance.85
Very Positive
Balance Sheet
The company's Debt-to-Equity Ratio has significantly improved to 0.10, indicating reduced financial leverage. The Return on Equity is robust at 21.49%, showcasing effective utilization of shareholder funds. The Equity Ratio improved to 47.92%, indicating a strong capital structure with an increased proportion of equity financing.78
Positive
Cash Flow
Genpact's Free Cash Flow grew by 23.28%, demonstrating an improvement in cash generation capabilities. The Operating Cash Flow to Net Income Ratio stands at 1.20, reflecting strong cash flow generation relative to net earnings. The Free Cash Flow to Net Income Ratio is 1.04, indicating efficient cash flow management.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.77B | 4.48B | 4.37B | 4.02B | 3.71B | Gross Profit |
| 1.69B | 1.57B | 1.54B | 1.43B | 1.29B | EBIT |
| 702.06M | 630.86M | 502.15M | 509.00M | 438.72M | EBITDA |
| 852.58M | 769.77M | 639.50M | 684.98M | 612.14M | Net Income Common Stockholders |
| 513.67M | 631.25M | 353.40M | 369.45M | 308.28M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 671.61M | 583.67M | 646.76M | 899.46M | 680.44M | Total Assets |
| 4.99B | 4.81B | 4.59B | 4.98B | 4.87B | Total Debt |
| 232.43M | 1.50B | 1.67B | 1.97B | 1.94B | Net Debt |
| -415.81M | 919.33M | 1.02B | 1.07B | 1.26B | Total Liabilities |
| 2.60B | 2.56B | 2.76B | 3.08B | 3.04B | Stockholders Equity |
| 2.39B | 2.25B | 1.83B | 1.90B | 1.83B |
| Cash Flow | Free Cash Flow | |||
| 532.66M | 432.04M | 389.28M | 637.03M | 503.94M | Operating Cash Flow |
| 615.42M | 490.81M | 443.67M | 694.28M | 584.31M | Investing Cash Flow |
| -105.96M | -78.94M | -36.59M | -122.75M | -266.40M | Financing Cash Flow |
| -424.85M | -483.00M | -571.40M | -332.88M | -92.01M |
Genpact Technical Analysis
Neutral
49.35
Price Trends
48.99
Positive
45.82
Positive
40.54
Positive
Market Momentum
-0.06
Positive
39.90
Neutral
13.39
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For G, the sentiment is Neutral. The current price of 49.35 is below the 20-day moving average (MA) of 52.33, above the 50-day MA of 48.99, and above the 200-day MA of 40.54, indicating a neutral trend. The MACD of -0.06 indicates Positive momentum. The RSI at 39.90 is Neutral, neither overbought nor oversold. The STOCH value of 13.39 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for G.
Genpact Risk Analysis
Genpact disclosed 43 risk factors in its most recent earnings report. Genpact reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Genpact Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $8.63B | 17.25 | 22.15% | 1.24% | 6.46% | -16.94% | |
76 Outperform | $202.86B | 27.19 | 27.10% | 1.71% | 2.75% | 10.53% | |
75 Outperform | $79.10B | 23.76 | 33.16% | 2.24% | 3.08% | 11.92% | |
68 Neutral | $33.35B | 29.32 | 16.59% | 1.99% | -3.41% | 67.87% | |
67 Neutral | $1.28B | 22.56 | 10.99% | 0.38% | -6.36% | -0.89% | |
58 Neutral | $21.67B | 10.04 | -18.58% | 2.39% | 5.01% | -23.17% | |
47 Neutral | $3.17B | 267.98 | -2.46% | ― | -5.65% | 78.20% |
* Technology Sector Average
Performance Comparison
G
Genpact
49.35
16.47
50.09%
ACN
Accenture
317.07
-54.93
-14.77%
CTS
CTS
41.45
-3.03
-6.81%
INFY
Infosys
18.29
-0.83
-4.34%
WIT
Wipro
3.03
0.03
1.00%
DXC
DXC Technology
16.85
-3.66
-17.84%
Genpact Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: 0.24% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue growth, significant new bookings, and successful AI initiatives. Despite some challenges with segment performance and visibility into non-annuitized business, the overall sentiment was positive due to operational efficiency and innovative advancements.Highlights
Strong Revenue Growth
Q4 revenue reached $1.25 billion, up 9% year over year. Full-year revenue grew 6.5%, exceeding initial guidance by 400 basis points.
Datatech AI Performance
Datatech AI revenue increased by 12% year over year in Q4, showing continuous growth for four consecutive quarters.
Operational Efficiency and Profitability
Gross margin expanded 10 basis points in Q4, with an adjusted operating income margin of 17.7%. Full-year operating cash flow grew 25%.
Significant New Bookings
2024 ended with $5.7 billion in new bookings, a 15% increase year over year.
Launch of AI Initiatives
Introduced Gen AI solutions, AI Value Studio, and the GigaFactory to enhance AI-driven transformation.
Lowlights
Mixed Performance Across Segments
While Consumer and Healthcare revenue increased by 11%, High-Tech and Manufacturing, and Financial Services grew at a slower pace of 9% and 6% respectively in Q4.
Challenges with Annuitized Business
25% of the business revenue requires conversion from pipeline to bookings each quarter, which presents visibility challenges.
Company Guidance
During the Genpact Limited Q4 2024 earnings call, the company provided detailed guidance for 2025, projecting full-year revenue growth between 5.5% and 7.7%, with a midpoint growth of 6.5% on an as-reported basis. In constant currency terms, revenue growth is expected to be approximately 7.2% at the midpoint. Genpact anticipates a gross margin of 36% and an adjusted operating income (AOI) margin of 17.3% for the full year, indicating an expansion over 2024. The company expects adjusted diluted EPS to grow by 9% at the midpoint. For the first quarter of 2025, Genpact forecasts net revenue growth between 6.2% and 7.2% on an as-reported basis, or 7.6% at the midpoint in constant currency terms, with a gross margin of 35% and adjusted diluted EPS in the range of $0.79 to $0.80, a 9% increase at the midpoint compared to Q1 of the previous year. The company plans to reinvest any revenue upside back into the business to drive future growth.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.