On Monday, TTEC Holdings Inc. (NASDAQ: NASDAQ:TTEC) saw its shares price target lowered from $22.00 to $18.00 by an analyst from Craig-Hallum, while the Buy rating on the stock was maintained. The adjustment reflects a cautious short-term outlook for the company, which is currently grappling with several challenges that are expected to temporarily affect its business.
TTEC is experiencing conservative volume forecasts from clients, the loss of a large client exiting a business line, and delays in contract signings this year. These factors are contributing to a gap in customer deployment, subsequently impacting the company's revenue cadence.
Despite these setbacks, the analyst believes that TTEC is poised to recover and return to a growth trajectory, supported by new client signings and strong performance in its Digital segment.
The company's Engage segment is displaying a healthier sales pipeline, with the offshore pipeline expanding by 35% year-over-year, now accounting for about half of the total pipeline. The company's advancements in AI-related work are also notable, with approximately 20% of its associate base now being AI-enabled, which is seen as a positive development for TTEC's future.
Moreover, TTEC's board has made the strategic decision to significantly reduce its dividend to prioritize debt reduction amid a higher interest rate environment and uncertain economic outlook. Although this move contributed to a decline in the stock price, the analyst views it as a wise decision for the current times.
The reduced dividend is anticipated to provide a buying opportunity for long-term investors who are prepared to wait for the company to reignite its revenue growth while it advances several strategic initiatives.
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