I recently stumpled upon Teleperformance SE.
A generic call center & digital service business provider.
Trading at a TTM PE of 8.63.
So why is Teleperformance SE interesting?
One of the most important touch points in the customer journey, is the post purchase segment. In this segment, the company can significantly improve the overall customer experience. When a customer calls in, he is likely about to churn. He needs help with a failure point/pain point, that needs quick execution. Teleperformance SE has massive capabilities in this segment. Emphasised by their massive scale and industry leadership.
The company recently appointed a Chief AI Officer, as they are increasingly transitioning into a tech-enabled customer service platform - integrating omnichannel execution with AI solutions.
Most importantly is the increasing need for addressing customers promptly; and not just through own channels. Always on marketing are an essential in the digital age of big social media platforms with open conversations. Teleperformance SE, is providing services that can address just this; and imo, this is going to be the growth driver in the long term.
But can Teleperformance SE tap this rapidly growing market? And will the legacy business, work as an drag on growth rates and FCF?
The market is currently voting an astounding no!; Emphasised by the dirt cheap valuation. The company is priced as a stagnating business in a legacy industry. The main bear thesis imo is companies pivoting to internally organised customer management.
2026 EV/FCF 8.33x
2026 PE 6.18x
2026 Net Income Margin 4.87%
2026 Return on Assets 6.16%
2026 Total Liabilities / Total Assets 64.3%
2025 Net Income / Total Liabilities 6,7%
Analyst expectations: 2028 PE 5.15. Management expects normalisation of revenue growth to about 4%; with increased margins.
Competition is both native call centers attempting the same pivot and consultancy companies helping customers with their customer experiences and co creation. Furthermore, SaaS only companies. Competitors thus include:
\- (Call Centers) Concentrix Corporation / TaskUs
\- (SaaS/CCaaS) NICE Ltd. / Five9 Inc. / Twilio Inc. / RingCentral / 8x8 Inc.
\- (Consultancy) Accenture / Globant
Not financial advice. I can have made mistakes.
I have shares in Teleperformance SE. Do your own research.