IBEX (IBEX) AI Stock Analysis

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IBEX

(NASDAQ:IBEX)

78Outperform

IBEX's strong financial performance and favorable earnings call insights are the primary drivers of its positive stock score. While technical indicators suggest potential overbought conditions, the company's attractive valuation and strategic initiatives position it well for future growth.

Positive Factors

Growth Strategy

IBEX's strong sales momentum is turning into accelerating growth.

Market Position

IBEX is seen as a market share gainer with a clean balance sheet, margin expansion, and inexpensive valuation.

Negative Factors

Automation Impact

IBEX has seen automation impacts over time and have grown well over time.

Industry Trends

Industry trends seem to be stabilizing, and margin trends have been good as revenue mix trending toward higher-margin services/geos.

IBEX (IBEX) vs. S&P 500 (SPY)

Market Cap

$307.90M

Dividend YieldN/A

Average Volume (3M)221.56K

Price to Earnings (P/E)10.6

Beta (1Y)0.98

Revenue Growth1.65%

EPS Growth35.92%

CountryUS

Employees33,000

SectorTechnology

Sector Strength40

IndustryInformation Technology Services

Share Statistics

EPS (TTM)2.12

Shares Outstanding13,191,924

10 Day Avg. Volume152,111

30 Day Avg. Volume221,559

Financial Highlights & Ratios

PEG Ratio0.30

Price to Book (P/B)N/A

Price to Sales (P/S)0.64

Price to Cash Flow (P/CF)72.90

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$26.00

Price Target Upside15.04% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

IBEX Business Overview & Revenue Model

Company DescriptionIBEX is a global provider of business process outsourcing (BPO) services, specializing in customer engagement, digital marketing, and technology solutions. The company operates across various sectors, including telecommunications, healthcare, retail, and financial services, offering a suite of services designed to enhance customer experience and operational efficiency for its clients.

How the Company Makes MoneyIBEX generates revenue primarily through its outsourcing services, where it partners with businesses to handle customer support, sales, and other back-office functions. The company earns money by entering into contracts with clients to provide tailored BPO solutions, charging fees based on service level agreements, transaction volumes, or a combination of both. Key revenue streams include customer service and support, technical support, and sales outsourcing. Significant factors contributing to IBEX's earnings include its global delivery model, which allows it to leverage cost efficiencies, and strategic partnerships with technology providers to enhance service offerings.

IBEX Financial Statement Overview

Summary

IBEX demonstrates strong profitability with impressive margins and a solid balance sheet. Despite minor concerns about revenue decline and negative free cash flow growth, overall financial health is strong, supporting operational sustainability and growth prospects.

Income Statement

Very Positive

IBEX has shown a strong performance in the TTM period with a Gross Profit Margin of 48.74% and a Net Profit Margin of 7.08%. The Revenue Growth Rate from the last annual report to TTM is 2.58%, indicating consistent growth. EBIT Margin stands at 8.66% and EBITDA Margin at 11.80%, showcasing solid profitability. A slight decline in revenue compared to the previous year is a minor concern but overall, the company demonstrates robust profitability supported by healthy margins.

Balance Sheet

Positive

The company maintains a Debt-to-Equity Ratio of 0.87, reflecting moderate leverage. Return on Equity (ROE) is 33.92%, indicating efficient use of equity to generate profits. The Equity Ratio is 39.97%, showing a stable financial position with a substantial equity base. Despite a decrease in total assets, the company's financial health remains sound with balanced leverage.

Cash Flow

Positive

Operating Cash Flow to Net Income Ratio is 1.02, pointing to good cash generation relative to income. Free Cash Flow to Net Income Ratio is 0.70, reflecting adequate free cash flow generation. Although the Free Cash Flow Growth Rate is negative at -4.24%, the company still generates sufficient cash flows to support its operations and investments. Overall, cash flow stability is solid with minor fluctuations.

TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Breakdown
Income Statement		Total Revenue
521.73M	508.57M	523.12M	493.57M	443.66M	405.13M
	Gross Profit
254.36M	152.23M	148.13M	119.60M	100.40M	128.88M
	EBIT
45.17M	39.43M	40.48M	29.80M	23.33M	19.51M
	EBITDA
67.49M	60.96M	73.96M	52.80M	51.53M	47.17M
	Net Income Common Stockholders
36.95M	33.66M	31.58M	21.46M	2.85M	7.77M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
11.96M	62.72M	57.43M	48.83M	57.84M	21.87M
	Total Assets
156.28M	293.90M	293.32M	290.14M	274.29M	195.24M
	Total Debt
55.90M	67.02M	78.90M	104.74M	112.52M	105.97M
	Net Debt
43.94M	4.30M	21.47M	55.91M	54.67M	84.10M
	Total Liabilities
131.50M	128.10M	143.36M	189.85M	193.63M	179.09M
	Stockholders Equity
24.78M	165.80M	149.96M	100.29M	80.66M	16.15M
Cash Flow		Free Cash Flow
25.90M	27.05M	22.91M	24.21M	5.07M	46.45M
	Operating Cash Flow
37.76M	35.90M	41.86M	50.13M	25.90M	51.72M
	Investing Cash Flow
-11.86M	-8.86M	-19.04M	-24.89M	-20.17M	-4.83M
	Financing Cash Flow
-54.71M	-21.73M	-13.61M	-33.28M	30.43M	-33.87M

IBEX Technical Analysis

Technical Analysis Sentiment

Negative

Last Price22.60

Price Trends

50DMA

24.65

Negative

100DMA

22.73

Negative

200DMA

20.18

Positive

Market Momentum

MACD

0.09

Positive

RSI

52.42

Neutral

STOCH

39.37

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IBEX, the sentiment is Negative. The current price of 22.6 is below the 20-day moving average (MA) of 24.68, below the 50-day MA of 24.65, and above the 200-day MA of 20.18, indicating a neutral trend. The MACD of 0.09 indicates Positive momentum. The RSI at 52.42 is Neutral, neither overbought nor oversold. The STOCH value of 39.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IBEX.

IBEX Risk Analysis

IBEX disclosed 49 risk factors in its most recent earnings report. IBEX 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

IBEX Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
G	80 Outperform	$8.27B	16.53	22.15%	1.33%	6.46%	-16.94%
EXLS	79 Outperform	$6.96B	34.85	21.80%	―	12.74%	9.92%
IBEX	78 Outperform	$307.90M	10.64	27.88%	―	1.65%	35.92%
CNXC	77 Outperform	$3.11B	12.09	6.34%	2.63%	21.67%	-17.91%
FIVN	62 Neutral	$1.74B	―	-2.21%	―	14.44%	84.58%
Sector *	57 Neutral	$18.52B	9.81	-13.96%	2.71%	5.07%	-23.65%
TTEC	45 Neutral	$193.90M	―	-75.62%	14.29%	-10.32%	-3860.81%

* Technology Sector Average

Performance Comparison

IBEX

22.50

8.08

56.03%

EXLS

Exlservice Holdings

41.85

10.90

35.22%

Genpact

46.79

14.92

46.82%

TTEC

TTEC Holdings

3.71

-5.70

-60.57%

FIVN

Five9

21.54

-40.26

-65.15%

CNXC

Concentrix

45.73

-14.64

-24.25%

IBEX Earnings Call Summary

Earnings Call Date: Feb 6, 2025 | % Change Since: 2.31% | Next Earnings Date: May 14, 2025

Earnings Call Sentiment Positive

The earnings call presented strong revenue growth and profitability improvements, driven by strategic client wins and AI solutions. Despite some challenges in specific verticals and increased capital expenditures, the company's overall trajectory is positive with continued investments in growth and diversification.

Highlights

Record Revenue and Growth

IBEX achieved its highest quarterly revenue in history at $140.7 million, up 6.1% from the previous year, marking the highest growth in two years.

Improved Profitability

Adjusted EBITDA margin expanded by 100 basis points to 11.8% from the prior year, with record Q2 adjusted net income of $9.6 million, up 20% from the prior year.

Strong EPS Performance

Adjusted EPS increased by 36% to $0.59 compared to the previous year.

Strategic Client Wins and AI Solutions

Closed five new logos in the quarter, including both traditional agent and generative AI deployments. Significant wins with WaveIX AI solutions for translation and automation.

Share Repurchase and Board Enhancements

Repurchased 3.6 million shares from TRGI, eliminating controlled company status under NASDAQ. Added three new members to the board with strong industry and AI expertise.

Lowlights

Decline in FinTech Revenue

FinTech vertical revenue declined by 15%, impacted by changes in client payment support models and geographic shifts.

Increased Capital Expenditures

Capital expenditures increased to $4.3 million or 3.1% of revenue, up from $2.9 million or 2.2% of revenue in the prior year quarter.

Net Cash Position Decrease

Net cash position decreased due to the share repurchase, moving from $60.8 million in net cash to $13.7 million in net debt.

Revenue Concentration in Largest Client

Largest client accounted for 12% of revenue, indicating some level of dependency on a single client.

Company Guidance

During the IBEX second quarter fiscal year 2025 earnings call, the company reported record Q2 revenue of $140.7 million, marking a 6.1% increase from the previous year. This growth was driven by significant expansions in key verticals such as health tech (31%), travel transportation and logistics (17%), and retail and e-commerce (4%), although offset by a 15% decline in FinTech. The adjusted EBITDA margin improved by 100 basis points to 11.8%, with adjusted net income rising 20% to $9.6 million and adjusted EPS increasing 36% to $0.59. The company highlighted strong offshore revenue growth of 14% year-over-year and a focus on high-margin omnichannel services. Additionally, IBEX's strategic initiatives, including new client wins and the WaveIX AI solutions, have reinforced its market position, leading to increased revenue retention and client diversification. The company also executed a $70 million strategic share repurchase, reducing its diluted share count and enhancing financial independence. Looking forward, IBEX raised its fiscal year revenue guidance to $525-$535 million and adjusted EBITDA to $68-$69 million, underlining confidence in continued growth and margin expansion.

IBEX Corporate Events

Private Placements and Financing

IBEX Completes $70 Million Share Purchase Transaction

Neutral

Jan 13, 2025

IBEX Limited has successfully completed a financial transaction involving the purchase of 3,562,341 common shares from The Resource Group International Limited for $70 million. The transaction was settled with $45 million in cash and a $25 million convertible promissory note, which was fully paid off using credit lines from HSBC, leading to the termination of the note.

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.