everythingpossible/iStock via Getty Images
- TTEC Holdings’ (NASDAQ:TTEC) stock fell -8.53% to $11.37 on Wednesday, after brokerage Canaccord Genuity downgraded the customer experience company to ‘hold’ from ‘buy’, and slashed price target to $13 from $30 primarily on less visibility.
- Brokerage says TTEC Holdings (TTEC) accomplished a lot in 2023 despite the tough macro backdrop, including building out an even better global service delivery footprint, fine-tuning cost structure, and sharpening the pencil on leading service offerings in both the Engage and Digital segments.
- However, the macro environment still remains tough, and clients remain “reticent about committing to service volume levels more than a month or two out”. This is reducing TTEC’s visibility.
- Additionally, according to management, one large customer is winding down/materially reducing operations at one of its business units. Reduced volume here will result in a ~4% headwind to revenue in 2024 – Canaccord Genuity.
- Furthermore, while the stock looks attractive valuation-wise, analysts believe that it marks time until “we can get a better handle on any kind of macro improvement across enterprise spending.”
- TTEC Holdings’ Q4 Non-GAAP EPS of $0.37 missed Street estimates by $0.02, while revenue of $626.2M (-4.9% Y/Y) beat by $22.72M.
- Furthermore, brokerage notes that, interest rates have yet to ease which in turn is sustaining TTEC’s relatively large interest cost burden, and management is also reprioritizing what cash flow it generates this year, diverting some of the dividend to debt repayment.