6. Concentrix Corporation (NASDAQ:CNXC)
Share Price: $44.14
Year-To-Date Performance: -54.81%
Analyst Upside Potential: 58.66%
Concentrix Corporation (NASDAQ:CNXC) is a technology company that specializes in improving customer experiences for businesses. The company also uses data to understand customer behavior and feedback. For instance, the Voice of Customer service of the company involves gathering and analyzing customer feedback to understand their needs better.
The company, on September 25th, announced the launch of its new product called iX Hello, which is an intelligent experience technology suite designed to enhance business productivity through generative AI. The product is a fully customizable, AI-powered virtual assistant that can be tailored to fit the specific needs of any business. It can be deployed quickly without requiring complex coding, making it accessible to various teams within an organization.
Concentrix Corporation (NASDAQ:CNXC) has been doing great in terms of revenue generation. For the third quarter of fiscal 2024, the company generated $2.39 billion in revenue, up 46.2% year-over-year. As per the management, revenue growth for the quarter was driven by 8% year-over-year growth in retail, travel, and e-commerce verticals.
It is one of the best tech stocks to invest in on the dip and analysts’ 12-month median price target is pointing towards a 59% upside from current levels.
FPA Queens Road Small Cap Value Fund stated the following regarding Concentrix Corporation (NASDAQ:CNXC) in its Q3 2024 investor letter:
“Concentrix Corporation (NASDAQ:CNXC) is one of two top customer experience (CX) vendors globally. The company began by managing call centers but has since evolved into a high-tech business process outsourcer (BPO) that also designs and runs customer-facing websites and apps, integrates the data, and optimizes a client’s customer interactions. The company was spun out from TD Synnex, another of the Fund’s core holdings, and we have always been impressed with CNXC’s innovation and growth. CX is a relatively new business model, and Concentrix has been rolling up smaller competitors. In March, 2023 they bought WebHelp, a leading European CX player, for $4.8B in cash and stock. 22 We believe the WebHelp acquisition will help consolidate an industry where Concentrix and Teleperformance are the largest players.
The market is currently concerned about the potential of artificial intelligence to disrupt Concentrix’ core call center business – all CX companies’ shares are down badly over the last two years.23 On Sep. 25, 2024 CNXC stock got hit again when they released fiscal 2024 Q3 results and took down revenue guidance – fiscal 2024 organic revenue is now expected to come in between -.5% and 1.5%. 24 Concentrix has a debt to EBITDA ratio of 3x from the Webhelp deal which will be a problem if earnings deteriorate quickly. But Concentrix now trades at less than five times adjusted EPS and is highly cash generative. We think, but don’t know, that Concentrix’ domain knowledge and integration into customers’ work flows make for meaningful switching costs and that clients will be reluctant to let AI manage the relationships with their customers. We have held on to Concentrix shares but have not added to the position.”
