We came across a bullish thesis on TTEC Holdings, Inc. (TTEC) on Substack by Unemployed Value Degen. In this article, we will summarize the bulls’ thesis on TTEC. TTEC Holdings, Inc. (TTEC)’s share was trading at $3.43 as of Feb 7th. TTEC’s forward P/E was 3.10 according to Yahoo Finance.
A smiling customer receiving customer contact center solutions on their smartphone.
TTEC Holdings (TTEC) operates in the $600 billion customer experience (CX) industry, providing outsourced customer service solutions. Despite its modest $166 million market capitalization, TTEC generated $2.26 billion in revenue over the last twelve months, reflecting a deeply undervalued stock trading at just 0.07x price-to-sales. The company competes with major players like Concentrix, Teleperformance, Genpact, and TaskUs but maintains a strong foothold across diverse industries, including finance, healthcare, and automotive. What makes TTEC particularly intriguing is its founder, Ken Tuchman, who remains CEO, Chairman, and majority owner with a 58% stake. His offer to take the company private at $6.85 per share represents a 96% premium over the current price of $3.49, offering a seemingly low-risk, high-reward scenario. However, the company’s fundamentals suggest a much higher intrinsic value, making this take-private bid feel like a missed opportunity for long-term investors.
TTEC’s depressed valuation is largely due to broader market concerns over AI replacing traditional CX services, though this fear appears overstated. AI is being integrated across the industry, rather than eliminating demand for human-driven CX solutions. Instead, the real issue is a macroeconomic environment defined by belt-tightening, mirroring the corporate efficiency trends seen across sectors. The entire CX industry has faced revenue stagnation, with competitors like TaskUs and Genpact experiencing similar trends. Compounding TTEC’s struggles was a $250 million goodwill impairment, creating misleading GAAP losses. Yet, with $79 million in operating income, a stable liquidity position, and no imminent bankruptcy risk, TTEC is in a far stronger position than its stock price suggests.
Given its two main business segments—traditional CX operations with over 50,000 employees and a fast-growing $463 million Cloud, AI, and SaaS division—TTEC’s long-term potential is compelling. A standalone valuation of its SaaS business alone would likely far exceed the current market cap. If not for the buyout offer, patient investors could anticipate a substantial rerating, with a return to a 0.50x–1.0x price-to-sales multiple easily justifying a market cap closer to $1.5 billion. While a tenfold return seems plausible under the right conditions, the more probable outcome is a successful take-private at $6.85, delivering a strong but ultimately limiting return. Without Tuchman’s bid, TTEC’s future would depend on macro recovery and management’s ability to reestablish growth, particularly in AI adoption. But with the privatization all but certain, investors may have to settle for a solid 96% gain rather than a ten-bagger.
TTEC Holdings, Inc. (TTEC) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 24 hedge fund portfolios held TTEC at the end of the third quarter which was 19 in the previous quarter. While we acknowledge the risk and potential of TTEC as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TTEC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.