Consumer technology company Concentrix is well on its way to becoming the top customer experience player globally, analysts at Canaccord believe.
Initiating coverage on the Nasdaq-listed stock, analysts slapped a Buy rating and US$150 price target on the Newark, California-based company.
“Via a strategy of organic growth and healthy M&A efforts over the past decade, Concentrix is well on its way to becoming literally the top customer experience (CX) player globally,” Canaccord analysts wrote.
They noted that, including the upcoming $4.8 billion acquisition of Webhelp, Concentrix will boast pro forma revenue of $9.8 billion, approximately 2,000 customers, and a “true global service delivery capability.”
“As the scale player in the space, we believe that the CNXC competitive moat only continues to expand across several key growth vectors,” analysts wrote.
Canaccord cited a series of transformative acquisitions (including Webhelp, an EMEA-based player), its strategic position post-pandemic when more transactions are being completed virtually, and uncanny ability to invest ahead of the next technology wave as reasons for its Buy rating.
Outlook strong heading into 2024
Looking ahead, Canaccord noted that Concentrix is well-positioned to drive organic growth and gain market share.
“In 2022, the company delivered 8% organic growth on a constant currency basis. Despite a challenging macro environment, the company delivered 4% cc organic growth in Q1, which was just reported a couple of weeks ago,” analysts wrote.
Softness in its consumer electronics, retail, and e-commerce segments was offset by steady performance in the rest of the portfolio, according to Canaccord.
“That said, existing clients continue to recalibrate their volume expectations. With an increased focus on costs, clients are consolidating vendors, and we think Concentrix will be a beneficiary of this vendor consolidation,” analysts added.
Canaccord sees “a few solid tailwind drivers” for the second half of 2023 that should carry the business into a strong start to 2024.
Shares of Concentrix were trading around US$112 on Wednesday.
Contact Angela at angela@proactiveinvestors.com
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