On Friday, BofA Securities updated its outlook on TTEC Holdings Inc. (NASDAQ: NASDAQ:TTEC) shares, reducing the price target to $9.00 from the previous $10.00. The firm maintained a Neutral rating on the stock. The revision follows TTEC's first-quarter results, which, while solid, did not alleviate concerns about the company's performance during a transition year.
TTEC Holdings reported a slight revenue beat for the first quarter but met expectations for margins and earnings per share (EPS). However, the company's EPS forecast for 2024 was adjusted downwards due to tax considerations. Despite this, TTEC reaffirmed its revenue and margin guidance for the year.
The company is experiencing implementation delays, particularly in the public sector, and is grappling with a challenging macroeconomic environment. As a result, TTEC has decided to stop providing quarterly guidance for the rest of 2024. This move signals a cautious approach to the uncertain business landscape that the company is navigating.
BofA Securities acknowledges TTEC's position as a leading provider of customer experience (CX) technology. Still, the firm suggests that the potential risks and rewards of investing in TTEC shares are currently balanced. This assessment is based on the stock's trading at approximately 5 times its projected 2025 earnings per share.
In conclusion, BofA Securities reiterates its Neutral stance on TTEC Holdings, signaling a watchful approach as the company proceeds through a year of transition with limited visibility on its future earnings potential.
InvestingPro Insights
In light of BofA Securities' recent update on TTEC Holdings Inc., examining the company's financial health and stock performance through InvestingPro metrics could provide investors with additional context. TTEC's market capitalization stands at $339.8 million, reflecting the market's current valuation of the company. Despite a challenging first quarter, the company's revenue over the last twelve months is reported at $2.406 billion, with a gross profit margin of 22.49%, indicating its ability to maintain profitability in a tough economic climate.
Investors should note that TTEC's stock has been trading near its 52-week low, with a price to book ratio of 0.57 as of Q1 2024, which could suggest that the stock is undervalued relative to its assets. Additionally, two InvestingPro Tips highlight that while analysts predict the company will be profitable this year, four analysts have revised their earnings downwards for the upcoming period. This mixed outlook may contribute to the cautious stance taken by BofA Securities.
For those considering TTEC as an investment opportunity, it's worth noting that the company's liquid assets exceed its short-term obligations, which may provide some financial stability in uncertain times. To explore more about TTEC's financials and for further InvestingPro Tips, investors can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. There are 11 additional tips available on InvestingPro that could help investors make a more informed decision.
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