Concentrix (NasdaqGS:CNXC) - Share price, News & Analysis

Q: What is the Fair Price of CNXC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

CNXC ($134.7) is trading below our estimate of [[fair value]] ($176.26)

CNXC fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	2/6
Past Performance	5/6
Financial Health	3/6
Dividends	0/6

CNXC Stock Overview

Concentrix Corporation provides technology-infused customer experience (CX) solutions worldwide.

Rewards

Trading at 23.6% below our estimate of its fair value

Earnings are forecast to grow 9.86% per year

Earnings grew by 61.3% over the past year

Risk Analysis

Has a high level of debt

Concentrix Competitors

WEX

NYSE:WEX

US$7.1b

Genpact

NYSE:G

US$7.9b

TELUS International (Cda)

NYSE:TIXT

US$6.7b

Western Union

NYSE:WU

US$6.4b

Price History & Performance

Summary of all time highs, changes and price drops for Concentrix
Historical stock prices
Current Share Price	US$134.70
52 Week High	US$208.48
52 Week Low	US$132.61
Beta	0
1 Month Change	-14.37%
3 Month Change	-19.13%
1 Year Change	-16.23%
3 Year Change	n/a
5 Year Change	n/a
Change since IPO	68.38%

Recent News & Updates

Jun 17

A Look At The Intrinsic Value Of Concentrix Corporation (NASDAQ:CNXC)

Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Concentrix Corporation...

Shareholder Returns

	CNXC	US IT	US Market
7D	-2.5%	1.7%	1.6%
1Y	-16.2%	-34.4%	-20.8%

Return vs Industry: CNXC exceeded the US IT industry which returned -34.9% over the past year.

Return vs Market: CNXC exceeded the US Market which returned -20.4% over the past year.

Price Volatility

Is CNXC's price volatile compared to industry and market?
CNXC volatility
CNXC Average Weekly Movement	5.9%
IT Industry Average Movement	9.9%
Market Average Movement	8.1%
10% most volatile stocks in US Market	16.8%
10% least volatile stocks in US Market	3.2%

Stable Share Price: CNXC is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: CNXC's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2009	290,000	Chris Caldwell	https://www.concentrix.com

Concentrix Corporation provides technology-infused customer experience (CX) solutions worldwide. The company provides CX process optimization, technology innovation, front- and back-office automation, analytics, and business transformation services. It also offers customer lifecycle management; customer experience/user experience strategy and design; digital transformation; and voice of the customer and analytics solutions.

Concentrix Fundamentals Summary

How do Concentrix's earnings and revenue compare to its market cap?
CNXC fundamental statistics
Market Cap	US$6.92b
Earnings (TTM)	US$450.56m
Revenue (TTM)	US$5.97b

15.3x

P/E Ratio

1.2x

P/S Ratio

Is CNXC overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
CNXC income statement (TTM)
Revenue	US$5.97b
Cost of Revenue	US$3.87b
Gross Profit	US$2.10b
Other Expenses	US$1.65b
Earnings	US$450.56m

Last Reported Earnings

May 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	8.78
Gross Margin	35.15%
Net Profit Margin	7.55%
Debt/Equity Ratio	84.5%

How did CNXC perform over the long term?

See historical performance and comparison

Dividends

0.7%

Current Dividend Yield

6%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is CNXC undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for CNXC?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for CNXC. This is calculated by dividing CNXC's market cap by their current preferred multiple.
What is CNXC's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$6.92b

CNXC key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.5x
Enterprise Value/EBITDA	10.3x
PEG Ratio	1.6x

Price to Earnings Ratio vs Peers

How does CNXC's PE Ratio compare to its peers?

CNXC PE Ratio vs Peers

The above table shows the PE ratio for CNXC vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	36.5x
WEX WEX	56.5x	20.0%	US$7.1b
G Genpact	21.1x	12.5%	US$7.9b
TIXT TELUS International (Cda)	61.5x	31.3%	US$6.7b
WU Western Union	7x	-5.2%	US$6.4b
CNXC Concentrix	15.3x	9.9%	US$6.9b

Forward PE

Price-To-Earnings vs Peers: CNXC is good value based on its Price-To-Earnings Ratio (15.3x) compared to the peer average (36.5x).

Price to Earnings Ratio vs Industry

How does CNXC's PE Ratio compare vs other companies in the US IT Industry?

Price-To-Earnings vs Industry: CNXC is good value based on its Price-To-Earnings Ratio (15.3x) compared to the US IT industry average (27.2x)

Price to Earnings Ratio vs Fair Ratio

What is CNXC's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

CNXC PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	15.3x
Fair PE Ratio	30.9x

Price-To-Earnings vs Fair Ratio: CNXC is good value based on its Price-To-Earnings Ratio (15.3x) compared to the estimated Fair Price-To-Earnings Ratio (30.9x).

Share Price vs Fair Value

What is the Fair Price of CNXC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: CNXC ($134.7) is trading below our estimate of fair value ($176.26)

Significantly Below Fair Value: CNXC is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: CNXC is poor value based on its PEG Ratio (1.6x)

Discover undervalued companies

Future Growth

How is Concentrix forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

9.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: CNXC's forecast earnings growth (9.9% per year) is above the savings rate (1.9%).

Earnings vs Market: CNXC's earnings (9.9% per year) are forecast to grow slower than the US market (13.7% per year).

High Growth Earnings: CNXC's earnings are forecast to grow, but not significantly.

Revenue vs Market: CNXC's revenue (11% per year) is forecast to grow faster than the US market (8.3% per year).

High Growth Revenue: CNXC's revenue (11% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if CNXC's Return on Equity is forecast to be high in 3 years time

Discover growth companies

Past Performance

How has Concentrix performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

43.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: CNXC has high quality earnings.

Growing Profit Margin: CNXC's current net profit margins (7.5%) are higher than last year (5.4%).

Past Earnings Growth Analysis

Earnings Trend: CNXC's earnings have grown significantly by 43% per year over the past 5 years.

Accelerating Growth: CNXC's earnings growth over the past year (61.3%) exceeds its 5-year average (43% per year).

Earnings vs Industry: CNXC earnings growth over the past year (61.3%) exceeded the IT industry 21.4%.

Return on Equity

High ROE: CNXC's Return on Equity (16.8%) is considered low.

Discover strong past performing companies

Financial Health

How is Concentrix's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: CNXC's short term assets ($1.6B) exceed its short term liabilities ($1.0B).

Long Term Liabilities: CNXC's short term assets ($1.6B) do not cover its long term liabilities ($2.9B).

Debt to Equity History and Analysis

Debt Level: CNXC's net debt to equity ratio (78.5%) is considered high.

Reducing Debt: Insufficient data to determine if CNXC's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: CNXC's debt is well covered by operating cash flow (22.7%).

Interest Coverage: CNXC's interest payments on its debt are well covered by EBIT (19.7x coverage).

Balance Sheet

Discover healthy companies

Dividend

What is Concentrix current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

0.74%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: CNXC's dividend (0.74%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.59%).

High Dividend: CNXC's dividend (0.74%) is low compared to the top 25% of dividend payers in the US market (4.25%).

Stability and Growth of Payments

Stable Dividend: CNXC is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: CNXC is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.

Earnings Payout to Shareholders

Earnings Coverage: CNXC is not paying a notable dividend for the US market.

Cash Payout to Shareholders

Cash Flow Coverage: CNXC is not paying a notable dividend for the US market.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

3.4yrs

Average management tenure

CEO

Chris Caldwell (48 yo)

10yrs

Tenure

US$15,087,737

Compensation

Mr. Christopher A. Caldwell, also known as Chris, serves as the President & Chief Executive Officer of Concentrix Corporation since December 2020 and also serves as its Director since December 2020. He ser...

CEO Compensation Analysis

Compensation vs Market: Chris's total compensation ($USD15.09M) is above average for companies of similar size in the US market ($USD8.21M).

Compensation vs Earnings: Chris's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: CNXC's management team is considered experienced (3.4 years average tenure).

Board Members

Experienced Board: CNXC's board of directors are not considered experienced ( 1.5 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: CNXC insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/29 00:00
End of Day Share Price	2022/06/29 00:00
Earnings	2022/05/31
Annual Earnings	2021/11/30