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Why Should You Hold Genpact (G) Stock in Your Portfolio?
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Genpact Limited (G - Free Report) is currently benefitting from a strong client base as well as buyouts that are boosting the top line.
Shares of the company have moved up 3.8% in the past three months, against the industry’s decline of 4.3%.
With expected long-term earnings per share (EPS) growth rate of 10% and a market cap of $5.6 billion, it seems to be a stock that investors should retain in their portfolios now.
Let’s take a look at the factors that bode well for the company.
Acquisitions: Key Growth Strategy
Genpact aims to expand product portfolio and acquire new domain expertise in providing business analytics, digital and consulting services on the back of accretive buyouts. The recent acquisition of riskCanvas Holdings, LLC is likely to enhance the company’s expertise in providing anti-money laundering (AML) solutions to various financial institutions on the back of riskCanvas’ integrated platform and tailored consulting services.
Some notable buyouts of 2018 include Barkawi Management Consultants and Commonwealth Informatics. In 2017, the company acquired TandemSeven, BrightClaim and their associated company, National Vendor as well as Rage Frameworks. All these acquisitions have aided the company to strengthen foothold in mobile technology, dynamic workflow solution, life sciences and banking operations. These have led to a strong customer base and boosted the top line.
Strong and Diverse Client Base
Genpact’s focus on integrating process, analytics and digital technologies with deep domain expertise has paved the way for a strong clientele across the world. The company serves almost one fifth of the Global Fortune 500, including Boeing (BA - Free Report) , Citigroup (C - Free Report) , GlaxoSmithKline (GSK - Free Report) , Wells Fargo, Ironshore, Mondelez, PayPal and Abbott. As a result, revenues from Global Client base have depicted a steady increase.
In a bid to gain popularity among customers, the company keeps on inventing new technologies like Blockchain and Industrial Internet of Things (IoT).
AI Platform: Significant Growth Opportunity
The company’s AI platform — Genpact Cora — is an automation to AI-based platform that integrates the company’s proprietary automation, analytics and AI technologies into a single common platform. Such a platform enables clients to handle specific operational business challenges more efficiently and will aid enable Genpact to provide related offerings to industries like consumer-packaged goods, industrial engineering, life sciences and high tech.
In spite of significant growth prospects, Genpact is not free from headwinds. Frequent acquisitions have negatively impacted the company’s balance sheet, as high indebtedness adds to the risk of investing in the company. As of Sep 30, 2018, the company had total debt (including the current portion) of $983.88 million. Nevertheless, we believe that expanding customer base and accretive acquisitions bode well for the company in the long term.
Currently, Genpact carries a Zacks Rank #3 (Hold).
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Image: Bigstock
Why Should You Hold Genpact (G) Stock in Your Portfolio?
Genpact Limited (G - Free Report) is currently benefitting from a strong client base as well as buyouts that are boosting the top line.
Shares of the company have moved up 3.8% in the past three months, against the industry’s decline of 4.3%.
With expected long-term earnings per share (EPS) growth rate of 10% and a market cap of $5.6 billion, it seems to be a stock that investors should retain in their portfolios now.
Let’s take a look at the factors that bode well for the company.
Acquisitions: Key Growth Strategy
Genpact aims to expand product portfolio and acquire new domain expertise in providing business analytics, digital and consulting services on the back of accretive buyouts. The recent acquisition of riskCanvas Holdings, LLC is likely to enhance the company’s expertise in providing anti-money laundering (AML) solutions to various financial institutions on the back of riskCanvas’ integrated platform and tailored consulting services.
Some notable buyouts of 2018 include Barkawi Management Consultants and Commonwealth Informatics. In 2017, the company acquired TandemSeven, BrightClaim and their associated company, National Vendor as well as Rage Frameworks. All these acquisitions have aided the company to strengthen foothold in mobile technology, dynamic workflow solution, life sciences and banking operations. These have led to a strong customer base and boosted the top line.
Strong and Diverse Client Base
Genpact’s focus on integrating process, analytics and digital technologies with deep domain expertise has paved the way for a strong clientele across the world. The company serves almost one fifth of the Global Fortune 500, including Boeing (BA - Free Report) , Citigroup (C - Free Report) , GlaxoSmithKline (GSK - Free Report) , Wells Fargo, Ironshore, Mondelez, PayPal and Abbott. As a result, revenues from Global Client base have depicted a steady increase.
In a bid to gain popularity among customers, the company keeps on inventing new technologies like Blockchain and Industrial Internet of Things (IoT).
AI Platform: Significant Growth Opportunity
The company’s AI platform — Genpact Cora — is an automation to AI-based platform that integrates the company’s proprietary automation, analytics and AI technologies into a single common platform. Such a platform enables clients to handle specific operational business challenges more efficiently and will aid enable Genpact to provide related offerings to industries like consumer-packaged goods, industrial engineering, life sciences and high tech.
Genpact Limited Price, Consensus and EPS Surprise
Genpact Limited Price, Consensus and EPS Surprise | Genpact Limited Quote
Wrapping Up
In spite of significant growth prospects, Genpact is not free from headwinds. Frequent acquisitions have negatively impacted the company’s balance sheet, as high indebtedness adds to the risk of investing in the company. As of Sep 30, 2018, the company had total debt (including the current portion) of $983.88 million. Nevertheless, we believe that expanding customer base and accretive acquisitions bode well for the company in the long term.
Currently, Genpact carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Looking for Stocks with Skyrocketing Upside?
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Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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