RE: Genpact Ltd (G) - earnings beat; Genpact reports Q1 adjusted EPS 73c, consensus 68c
Reports Q1 revenue $1.13B, consensus $1.11B. "Results for Q1 were above the high end of our guidance range, driven by early signs of improving execution and better than expected performance across both Data-Tech-AI and Digital Operations," said Balkrishan Kalra, CEO. "In Q1, we established our new '3+1 Execution Framework,' which is focused on building stronger partnerships, delivering more comprehensive Data-Tech-AI solutions, simplifying our sales and go-to-market structures, and enhancing our own operational efficiency through AI-led transformation. This work, while early, is delivering promising results and will be a key ingredient in putting us on the path to reach our full potential." This is the first earnings report that I have monitored after I have been building my position. I wanted a 'value' AI play that actually had earnings and could benefit from this AI boom. I think I found it in Genpact. Company exceeded expectations (beat EPS by 7% and guided higher to $3.01 -$3.04 FY 2024). At 11x PE and growing those earnings is a good combination.
Not too much debt at 0.54x Debt/Equity as most of their assets are in their human resources. They do consulting services and implement AI platform integration for many of their legacy clients.
I missed this announcement April 30th 2024:
Genpact (G) announced a collaboration with Microsoft (MSFT) focusing on using data, technology, and AI to fuel innovation for finance organizations globally. This collaboration will bring Microsoft Azure OpenAI Service together with Genpact's expertise enabling quicker decision-making supported by a foundation of data and AI. Genpact is also modernizing its own finance function through Microsoft's AI tools to drive superior employee and supplier experience. Genpact has implemented a large language model-based digital assistant, which uses advanced natural language processing and machine learning to streamline tax document submissions. I am still not at a full position but trying to build an AI basket of stocks and really need to look at adding MSFT. I think GOOGL at 22x Forward PE might be a better buy than MSFT that is priced now at a 35x PE.
My price target for Genpact Ltd (G) is $39 - $45. That would imply a 21% - 38% upside potential. FWIW
Genpact Ltd (G) DCF Valuation = $60.95/share
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Would like to hear from those Value Investors that might have some other stock ideas for AI Value Buys. Maybe it is an oxymoron to link AI with Value. |
