Shares of Genpact Limited (G - Free Report) have gained 57.3% on a year-to-date basis, outperforming the 29.9% growth of the industry it belongs to.
Let’s delve deeper into the factors which have contributed to the company’s outperformance.
Consecutive Earnings & Revenue Beat
Genpact reported better-than-expected earnings and revenue performance in the first three quarters of 2019. While the company’s bottom line continued to gain from operational efficiency, the top line performed well on the back of strength across its BPO and IT services, global client transformation services and global client revenues.The company is well positioned to take advantage of the projected improvement in the AI space.
Upbeat 2019 EPS Guidance
Genpact raised its 2019 guidance for adjusted earnings. The company now expects adjusted earnings of $2.02-$2.04 per share compared with the prior guided range of $2-$2.02. The current Zacks Consensus Estimate of $2.04 is in line with the higher end of the updated guidance.
Strategic Acquisitions Bode Well
Acquisitions have been Genpact’s most favored mode for expanding product portfolio as well as gaining new domain expertise. In January 2019, the company acquired riskCanvas Holdings from Booz Allen Hamilton. This acquisition expands Genpact’s services in the areas of financial institution fraud, anti-money laundering and financial transaction surveillance, and enhances its consulting capabilities for clients in the financial services industry.
In August 2018, Genpact completed the buyout of Barkawi Management Consultants and certain affiliated entities in the United States, Germany and Austria to expand global supply chain management transformation expertise. In July 2018, the company acquired Commonwealth Informatics, which should boost Genpact pharmacovigilance artificial intelligence (PVAI) suite of capabilities
Genpact is expected to continue acquiring companies, which, in turn, should boost its customer base and top-line growth.
Zacks Rank & Stocks to Consider
Currently, Genpact carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Business Services sector are Cardtronics (CATM - Free Report) , Global Payments (GPN - Free Report) and Mastercard Inc. (MA - Free Report) . While Cardtronics sports a Zacks Rank #1 (Strong Buy), Global Payments and Mastercard carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term expected EPS (three to five years) growth rate for Cardtronics, Global Payments and Mastercard is 4%, 18% and 16%, respectively.
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