Dear all,
I published an updated writeup on $CNXC (Concentrix Corporation) on my substack – link here: hugomanenti.substack.com/p/concentrix-same-old?utm_source=etoro&utm_medium=social
Here's the summary.
𝗤𝟭 𝗦𝗻𝗮𝗽𝘀𝗵𝗼𝘁
Revenue of $2.5 billion, up 1.9% in constant currency. Adjusted EPS of $2.61. Both within guidance. Full-year outlook maintained.
The stock fell ~20% post-earnings, likely due to inflated sell-side expectations and a back-half-weighted earnings profile. At ~$27 per share, CNXC now trades at 2.2x adjusted earnings and a ~40% free cash flow yield. Incredibly cheap.
𝗧𝗵𝗲 𝗚𝗼𝗼𝗱
The AI story keeps strengthening:
✅ Technology-related wins up 61% YoY
✅ AI-inclusive contract values more than doubled sequentially
✅ Two largest-ever AI deals signed – both with Fortune 50 companies
✅ Proprietary AI product ARR tracking ahead of $100m year-end target
Three years after ChatGPT, the "AI will kill call centres" thesis has not materialised. Revenue is growing. The company is winning more business, at increasing quality / stickiness.
𝗧𝗵𝗲 𝗕𝗮𝗱
Margins. Adjusted operating margin at 11.8%, down 180bps year-over-year. The downward trend continues and this is where I've been most wrong – the trough has lasted longer than expected.
However, for the first time, management provided a clear bridge to recovery: ~$40m in annualised cost savings, $100-150m of incremental H2 revenue absorbing excess capacity, and transformational deals reaching scale.
The CFO guided to "stable Q2, bigger uptick in Q3, further step up in Q4."
If Q3 margins don't approach 12.5%+, the investment-phase narrative loses credibility. This is the make-or-break variable.
𝗕𝗼𝘁𝘁𝗼𝗺 𝗟𝗶𝗻𝗲
The thesis is intact but unproven on margins. At this valuation, the stock prices in severe decline while the business is still growing and generating $630m+ of annual FCF. If margins recover, the stock could double. If they don't, the bad news is largely priced in.
High conviction, high patience. I remain long.
All the best,
Hugo... Show More
Not investment advice. The author may have financial interests in the mentioned instruments.
The AI transformation story strengthening while margins lag creates that classic 'investment phase' tension. At 2.2x earnings and 40% FCF yield, the valuation does price in severe decline while the business fundamentals suggest otherwise. Q3 margins will indeed be the make-or-break inflection... Show More
.
We use our own and third-party cookies on our websites to enhance your experience, analyze traffic, and for security and marketing. For more info, see our Cookie Policy or go to Manage Settings.
Privacy Preference Center
When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.
More information
Manage Consent Preferences
Strictly Necessary Cookies
Always Active
These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.
Performance Cookies
These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.
Functional Cookies
These cookies enable the website to provide enhanced functionality and personalisation. They may be set by us or by third party providers whose services we have added to our pages. If you do not allow these cookies then some or all of these services may not function properly.
Targeting Cookies
These cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.
Cookie List
label
ConsentLeg.Interest
label
label
label
Wed Jun 17 2026 03:26:49 GMT+0000 (Coordinated Universal Time)
