Strong Balance Sheet Aid Genpact (G) Amid Rising Talent Cost
We recently issued an updated report on Genpact Limited G.
In the past year, shares of Genpact have gained 16.2% compared with 28% increase of the industry it belongs to.
Genpact is a dominant name in the BPO services market based on domain expertise in business analytics, digital and consulting. The company’s focus on integrating process, analytics and digital technologies along with deep domain expertise is helping it win customers on a regular basis. We expect expanding customer base, stringent cost control, accretive acquisitions and aggressive share repurchase to drive overall results in the long haul.
The company’s debt level fell quarter over quarter. Total debt at the end of fourth-quarter 2020 was $1.51 billion, down from the $1.59 billion recorded at the end of the prior quarter. Further, cash and cash equivalent balance of $680 million at the end of the fourth quarter was enough to meet the short-term debt of $284 million.
Meanwhile, the outsourcing industry is labor intensive and heavily dependent on foreign talent. Rising talent costs due to competition along with stringent policies on immigration could dent Genpact’s growth.
Zacks Rank and Stocks to Consider
Genpact currently carries a Zacks Rank #3 (Hold).
Some better-ranked service stocks are The Interpublic Group of Companies, Inc. IPG, NV5 Global NVEE and TeleTech Holdings TTEC. The Interpublic Group of Companies and NV5 Global carry a Zacks Rank #2 (Buy), whileTeleTech sports a Zacks #1 Rank (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term expected earnings per share (three to five years) growth rate for The Interpublic Group of Companies, NV5 Global and TeleTech is pegged at 2.4%, 16.9% and 14.7%, respectively.
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Interpublic Group of Companies, Inc. The (IPG) : Free Stock Analysis Report
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Genpact Limited (G) : Free Stock Analysis Report
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