Should You Reconsider Concentrix After Its 16% Share Price Drop This Week?

Trying to figure out what to do with Concentrix stock? You are not alone. Whether you already hold shares or are considering a first-time buy, it is normal to weigh both the numbers and the story behind the scenes. Over the last week, you might have noticed the share price dropped by 16.3%, a sharp reversal that stands out against the 9.5% increase seen year to date. Looking back a bit further, though, the one-year return is down by 5.2%, and the three-year return is a notable -55%. These swings have left the stock on a lot of radars, with some investors wondering if this marks a fresh opportunity or a sign to stay cautious.

The market conversation around Concentrix has focused on sector-wide volatility and evolving technology trends, which can heighten both growth potential and risk perception. Many are now asking if the market has overreacted and whether Concentrix is currently undervalued.

To help cut through the noise, I have put Concentrix through a valuation checkup using six different methods. The result? The company scored a perfect 6 out of 6 for undervaluation, which certainly caught my attention. Of course, every number tells a part of the story, so let us dig in and see how Concentrix stacks up across these different valuation approaches. And if you are looking for an even sharper perspective, stick around, because there is a smarter lens for understanding Concentrix's worth coming up later.

Why Concentrix is lagging behind its peers

Approach 1: Concentrix Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's intrinsic value by projecting its future cash flows and then discounting those amounts back to their present value. In essence, this method tries to determine what Concentrix is truly worth today by looking at the cash it can generate well into the future.

For Concentrix, the current Free Cash Flow stands at $490.8 Million. Analysts estimate steady growth ahead, with Free Cash Flow expected to nearly double over the next five years. Projections suggest that by 2029, Free Cash Flow could reach $980.9 Million. Beyond analyst estimates, further future cash flows are extrapolated, maintaining a moderate growth trajectory according to Simply Wall St’s analysis.

All figures are denominated in USD. Weighing these forecasts, the DCF methodology points to a fair value for Concentrix shares of $201.72. With the model showing the stock trades at a 76.4% discount to its intrinsic value, this suggests the market is significantly underestimating Concentrix's long-term earnings power.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Concentrix.

Our Discounted Cash Flow (DCF) analysis suggests Concentrix is undervalued by 76.4%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Concentrix Price vs Earnings (PE)

The Price-to-Earnings (PE) ratio is a popular tool for valuing established, profitable companies like Concentrix. It directly reflects how much investors are willing to pay for each dollar of current earnings. A lower PE can indicate that the market has muted expectations for future growth or perceives greater risk. Conversely, a higher PE often points to optimism about a company’s outlook and stability.

Concentrix currently trades at a PE ratio of 9.67x. For context, the broader Professional Services industry averages a PE of 26.10x, and key listed peers are trading around 36.05x. This steep discount, at first glance, might suggest undervaluation. However, raw comparisons only tell part of the story.

This is where Simply Wall St’s proprietary "Fair Ratio" comes in. The Fair Ratio for Concentrix stands at 24.86x. Unlike generic industry or peer averages, the Fair Ratio calibrates for essentials such as projected earnings growth, business risks, profit margins, market cap, and the specific dynamics of its sector. This makes it a far more tailored benchmark for judging whether the current price fairly reflects the company’s potential.

Comparing the Fair Ratio of 24.86x to the actual PE of 9.67x, Concentrix appears significantly undervalued by this measure.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Concentrix Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is your personal investment story about a company. It connects the numbers with your view of the future by blending your estimates for things like revenue, profit margins, and growth with the real events shaping the business.

Instead of just relying on financial ratios or analyst targets, Narratives help you bring together everything you believe about Concentrix, from AI integration and operational synergies to challenges with debt or client concentration. By linking your story to a financial forecast and then comparing the resulting Fair Value with the current share price, Narratives make it much easier to see whether a stock looks like a buy, hold, or sell in your eyes.

The best part is that Narratives are simple to create and update on Simply Wall St’s Community page, used by millions of investors. Whenever there is new information, such as quarterly results or major news, Narratives automatically adjust so your estimates stay relevant and timely.

For example, some Concentrix investors see the company’s AI platform and acquisition synergies justifying a bullish Fair Value near $80, while others, more concerned about slow revenue growth or high debt, peg Fair Value closer to $61. Yet both are using Narratives to make more informed, confident decisions.

Do you think there's more to the story for Concentrix? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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