Cash Machine Trading Cheap – Concentrix Stock Set to Run?
Here is why we think Concentrix (CNXC) stock is worth a look: It is growing, producing cash, and available at a significant valuation discount.
Concentrix navigates a dynamic environment by accelerating its AI integration, with the iX Hero platform winning awards and contributing to nearly 40% of new client wins. Q3 2025 revenue reached $2.48 billion, a 4.0% year-over-year increase, exceeding guidance. While non-GAAP operating margins softened to 12.3% due to transformation investments, management expects AI solutions to become accretive by Q4 2025. The company has also raised its full-year adjusted free cash flow guidance to $585-$610 million and increased its quarterly dividend to $0.36 per share.
Let’s look at some figures
- Cash Yield: Concentrix offers an impressive cash flow yield of 23.9%.
- Growing: Last 12 month revenue growth of 3.4%, not that great, but your cash pile is likely to grow.
- Valuation Discount: CNXC stock is currently trading at 39% below 3-month high, 46% below 1-year high, and 65% below 2-year high.
Free Cash Flow Yield refers to free cash flow per share / stock price. Why it matters? If a company produces high amount of cash per share, it can be used to fuel additional revenue growth, or simply paid through dividends or buybacks to shareholders. For quick background, Concentrix provides technology-driven customer experience (CX) solutions globally, serving clients in consumer electronics, technology, e-commerce, and health insurance sectors.
Not interested in individual stocks? Want to build a portfolio instead, that is designed to win across cycles? Our numbers show that High Quality Portfolio has turned stock-picking uncertainty into market-beating consistency.
| CNXC | S&P Median | |
|---|---|---|
| Sector | Industrials | – |
| Industry | Data Processing & Outsourced Services | – |
| Free Cash Flow Yield | 23.9% | 4.1% |
| Revenue Growth LTM | 3.4% | 6.1% |
| Operating Margin LTM | 6.3% | 18.8% |
| PS Ratio | 0.2 | 3.2 |
| PE Ratio | 6.8 | 23.6 |
| Discount vs 3-Month High | -39.3% | -7.1% |
| Discount vs 1-Year High | -46.0% | -11.5% |
| Discount vs 2-Year High | -65.5% | -13.5% |
But do these numbers tell the full story? Read Buy or Sell CNXC Stock to see if Concentrix still has an edge that holds up under the hood.
The Point? The Market Can Notice, And Reward
The below statistics are from “high FCF yield with growth and discount” selection strategy since 12/31/2016. The stats are calculated based on selections made monthly, and assuming that a stock once picked, can not be re-picked for next 180 days.
- Average 6-month and 12-month forward returns of 25.7% and 57.9% respectively
- Win rate (percentage of picks returning positive) of > 70% for both 6-month and 12-month periods
In summary, we select stocks that have dropped, despite apparently healthy fundamentals, and offer high cash flow yield – so useful to consider, what is the risk?
Risk Quantified
CNXC isn’t immune to big drops. It fell about 18% during the Covid pandemic, which is relatively mild. But the inflation shock hit much harder, with a nearly 65% plunge from peak to bottom. Even with solid fundamentals, this stock can take a serious hit when the market turns. Good factors help, but downturns highlight the risks that can still show up.
But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read CNXC Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.