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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: OlafB who wrote (78812)

12/24/2025 3:06:05 PM

From: E_K_S

Respond to of 78966

I have been successful using my FCF metrics when looking at value and/or emerging value.

The inverse to Price/Free Cash Flow is FCF yield.

You rarely see this FCF yield at 23% !

The FCF YieldBased on the company's 2025 guidance of $585M – $610M in Adjusted Free Cash Flow and a current Market Cap of roughly $2.5 Billion:

Current FCF Yield: ~23.5% (Some analysts calculate this closer to 18% depending on how they treat stock-based compensation and integration costs).

An FCF yield of 23% is extraordinary; it implies the company could technically buy itself back entirely in about 4–5 years using only its cash flow. This is the primary "bull case" for the stock.

10-Year FCF Performance

As a Standalone Public Company (2020–2025): Concentrix has been consistently FCF positive every fiscal year since its spin-off.
Historical Performance (Pre-2020): While it was a division of SYNNEX, Concentrix was the "growth and cash" engine of the parent company. Historical filings for the spin-off (Form 10) showed that the business unit maintained positive cash flow from operations and positive FCF for the three years of audited data provided prior to the IPO (2017–2019).
The 2020 "Low": There was a technical dip in 2020 due to one-time separation costs and the massive scale-up required during the pandemic, but the underlying business remained cash-generative.

Recent Free Cash Flow History

Fiscal Year	Adjusted FCF	Context
2021	~$500M+	Post-IPO growth and debt reduction.
2022	~$450M	High investment in digital capabilities.
2023	~$400M+	Impacted by Webhelp acquisition costs.
2024	$475M	Reported in recent annual filings.
2025 (E)	$585M – $610M	Current management guidance (updated late 2025).

CNXC has only been public for 5 years and FCF positive since the their spin off from Synnex Corp (SNX).

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The key will be if they can grow their FCF through their AI platform. You are correct on all the intangible assets from the Goodwill paid on those acquisitions . . .