Investors looking for stocks in the Business - Services sector might want to consider either Concentrix Corporation (CNXC) or UL Solutions Inc. (ULS) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positiv ...

Core Viewpoint - Concentrix Corporation has announced a public offering of $600 million in Senior Notes with a 6.500% interest rate, due in 2029, to refinance existing debt and cover related expenses [1]. Group 1: Offering Details - The offering consists of $600 million aggregate principal amount of 6.500% Senior Notes due 2029 [1]. - The proceeds will be used to redeem or repay all or a portion of the 6.650% Senior Notes due August 2, 2026, which currently has an outstanding amount of $800 million [1]. - The expected closing date for the offering is February 24, 2026, pending customary closing conditions [1]. Group 2: Management and Underwriters - The offering is managed by BofA Securities, J.P. Morgan, BNP Paribas, Citigroup, HSBC, PNC, TD Securities, Truist, U.S. Bancorp, and Wells Fargo as joint book-running managers [2]. - Co-managers for the offering include Fifth Third Securities, Goldman Sachs, MUFG Securities, and Standard Chartered Bank [2]. Group 3: Regulatory Information - The offering will be made under an effective shelf registration statement filed with the U.S. Securities and Exchange Commission (SEC) [3]. - Investors are encouraged to read the prospectus supplement and accompanying prospectus for detailed information regarding the offering [3].

Core Viewpoint - Concentrix Corporation (CNXC) is currently viewed as a better investment opportunity compared to Bowman Consulting (BWMN) based on various valuation metrics and earnings outlook [1][3][7] Valuation Metrics - CNXC has a forward P/E ratio of 3.40, significantly lower than BWMN's forward P/E of 22.17, indicating that CNXC may be undervalued [5] - The PEG ratio for CNXC is 0.39, while BWMN's PEG ratio stands at 1.15, suggesting that CNXC offers better value relative to its expected earnings growth [5] - CNXC's P/B ratio is 0.91, compared to BWMN's P/B of 2.33, further supporting the notion that CNXC is undervalued [6] Earnings Outlook - CNXC has a Zacks Rank of 2 (Buy), indicating a positive earnings estimate revision trend, while BWMN has a Zacks Rank of 4 (Sell), reflecting a less favorable outlook [3][7] - The improving earnings outlook for CNXC enhances its attractiveness as a value investment [7] Value Grades - CNXC holds a Value grade of A, while BWMN has a Value grade of C, reinforcing the assessment that CNXC is the superior value option at this time [6]

Core Insights - Identifying true value stocks requires thorough fundamental analysis beyond just key financial indicators like earnings per share and sales growth [1] Valuation Metrics - Investors often use valuation measures such as price-to-earnings (P/E) and price-to-sales (P/S) ratios, but the price-to-book (P/B) ratio is also a valuable tool for spotting attractively priced stocks with growth potential [2] - The P/B ratio is calculated as market capitalization divided by book value of equity, helping to identify low-priced stocks with high-growth prospects [2][6] - A P/B ratio of less than one indicates that a stock is undervalued, while a ratio greater than one suggests it may be overvalued [6][8] Book Value Definition - Book value represents the total value remaining for shareholders if a company were to liquidate its assets after settling all liabilities [4] - It is calculated by subtracting total liabilities from total assets, often equating to common stockholders' equity [5] Limitations of P/B Ratio - The P/B ratio is particularly useful for industries like finance and manufacturing but can be misleading for companies with significant R&D expenditures or high debt [9] - A P/B ratio of less than one may indicate weak returns on assets or overstated assets, while a ratio above one could suggest the stock is a takeover target [8][9] Screening Parameters - Stocks with a P/B ratio lower than the industry median are considered to have potential for price appreciation [12] - A lower P/S ratio compared to the industry average makes a stock more attractive [12] - A P/E ratio lower than the industry median is also a favorable indicator [13] - A PEG ratio of less than one indicates undervaluation with promising growth prospects [14] - Stocks should have a current price of at least $5 and a trading volume of over 100,000 for liquidity [15] Selected Low P/B Stocks - Invesco (IVZ) has a Zacks Rank of 1, a Value Score of B, and a projected 3-5 year EPS growth rate of 20.9% [16] - Harmony Biosciences (HRMY) holds a Zacks Rank of 1, a Value Score of A, and a projected 3-5 year EPS growth rate of 27.11% [17] - Concentrix (CNXC) has a Zacks Rank of 2, a Value Score of A, and a projected 3-5 year EPS growth rate of 8.76% [17] - Patria Investments Limited (PAX) has a Zacks Rank of 1, a Value Score of A, and a projected 3-5 year EPS growth rate of 15.39% [18] - Global Payments (GPN) has a Zacks Rank of 2, a Value Score of A, and a projected 3-5 year EPS growth rate of 11.54% [19]

Market Overview - The U.S. stock market showed subdued performance, with the Dow Jones Industrial Average increasing by 0.11% to 49,071.56, while the S&P 500 decreased by 0.13% to 6,969.01, and the Nasdaq Composite fell by 0.72% to 23,685.12 [1] - The technology sector experienced a significant sell-off, particularly in Microsoft Corporation (MSFT) shares, due to concerns over slower cloud growth, although Meta provided some offsetting strength [2] Value Stocks Analysis - Value stocks are highlighted as appealing investment opportunities amid cautious market sentiment, driven by rising oil prices and geopolitical tensions [2] - The Price to Cash Flow (P/CF) ratio is emphasized as an effective valuation metric, indicating that a lower P/CF ratio suggests better value and strong cash generation potential [3][4] - Analysts note that cash flow is a more reliable indicator of a company's financial health compared to earnings, which can be influenced by accounting estimates and management manipulation [5] Investment Strategy - A comprehensive investment strategy should include multiple valuation metrics such as price-to-book ratio, price-to-earnings ratio, and price-to-sales ratio, alongside a favorable Zacks Rank and Value Score [7] - Parameters for selecting true-value stocks include a P/CF ratio less than or equal to the industry median, a minimum stock price of $5, and an average 20-day trading volume greater than 100,000 [8] Selected Value Stocks - Four companies—Harmony Biosciences Holdings, Inc. (HRMY), Universal Health Services, Inc. (UHS), Concentrix Corporation (CNXC), and Global Payments Inc. (GPN)—meet strict value criteria, showing low P/CF ratios and solid financial health [9] - Each of these companies is projected to grow both sales and earnings per share (EPS) in the current financial year, with all carrying a Value Score of A and demonstrating consistent positive earnings surprises [9] Company-Specific Insights - Harmony Biosciences is projected to see sales growth of 21.4% and EPS growth of 25.9% for the current financial year, despite a 4.9% decline in share price over the past year [13] - Universal Health Services anticipates sales growth of 9.7% and EPS growth of 31.3%, with shares rising by 6.1% in the past year [14] - Concentrix Corporation expects sales growth of 2.9% and EPS growth of 4.8%, although its shares have dropped by 26.1% in the past year [15] - Global Payments forecasts sales growth of 1.8% and EPS growth of 5.8%, with shares declining by 36.8% over the past year [16]

Core Insights - AI stocks have experienced significant volatility, with a notable sell-off in the latter half of 2025 as investors reassess valuations and returns [1] - Concentrix (NASDAQ: CNXC) is gaining attention as a promising AI stock, with Wall Street analysts expressing bullish sentiments [2] Company Overview - Concentrix specializes in customer service and experience solutions, offering services such as customer support, data processing, digital transformations, and brand experience design [3] - The company operates through two main business segments: an outsourcing model and a software platform sold to clients [3] AI Integration - Concentrix has developed a suite of AI products aimed at enhancing customer service, supporting live agents, and managing complex tasks through agentic AI technology [4] - Approximately 40% of Concentrix's new business incorporates AI solutions, indicating a strong pivot towards AI-centric offerings [4][5] Financial Performance - In fiscal 2025, Concentrix reported a revenue increase of about 2%, with projected revenue growth of 1.5% to 3% for fiscal 2026 [6] - The company achieved record adjusted free cash flow of $626 million in 2025, with expectations of $630 million to $650 million in 2026, which will be strategically invested to enhance earnings [6]

Financial Performance - For the fiscal year ended November 30, 2025, revenue was $9,825.8 million, an increase from $9,618.9 million in 2024, representing a growth of approximately 2.2%[213] - The cost of revenue for fiscal year 2025 was $6,390.8 million, compared to $6,170.0 million in 2024, resulting in a gross profit of $3,435.0 million, slightly down from $3,448.9 million in 2024[213] - Net income for fiscal year 2025 was a loss of $1,278.9 million, a significant decline from a net income of $251.2 million in 2024[213] - Revenue for fiscal year 2025 increased by 2.2% to $9,825,771,000 compared to $9,618,900,000 in fiscal year 2024[215] - Revenue growth was driven by increases in retail, travel and e-commerce (3.0%), communications and media (4.2%), and banking, financial services and insurance (5.5%) verticals[216] - Gross profit decreased by 0.4% to $3,435,011,000, with gross margin percentage declining from 35.9% to 35.0%[220] - Operating loss for fiscal year 2025 was $918,183,000, compared to an operating income of $596,387,000 in fiscal year 2024[224] - Free cash flow for fiscal year 2025 was negative at $(918,183) thousand, compared to $596,387 thousand in fiscal year 2024[238] - Adjusted EBITDA for fiscal year 2025 was $1,469,319 thousand, compared to $1,554,925 thousand in fiscal year 2024, reflecting a margin of 15.0%[238] Impairment and Charges - The company recorded impairment charges of $1,527.7 million in fiscal year 2025, leading to an operating loss of $918.2 million, compared to an operating income of $596.4 million in 2024[213] - Impairment charges amounted to $1,527,726,000, representing 15.5% of revenue, primarily due to a non-cash goodwill impairment charge[223] Revenue Sources and Client Base - Approximately 89% of consolidated revenue in fiscal years 2025 and 2024 was generated from non-U.S. operations, with 54% of revenue priced in U.S. dollars in 2025[191] - No client accounted for more than 10% of consolidated revenue in fiscal years 2025 and 2024, indicating a diversified client base[240] Acquisition and Growth Strategy - The company completed the acquisition of Webhelp for approximately $3,774.8 million on September 25, 2023, enhancing its service capabilities[187] - The company expects continued revenue growth to be influenced by foreign currency exchange rates and inflation in local economies[191] - The company expects to expand operations through investments or acquisitions, requiring initial investments in working capital and facilities[241] Debt and Financing - The company issued $800 million of 6.650% Senior Notes due 2026 and $800 million of 6.600% Senior Notes due 2028 in August 2023[246] - The Restated Credit Agreement includes a New Term Loan Facility of up to $750 million, a 3-Year DD Term Loan Facility of up to $250 million, and a 5-Year DD Term Loan Facility of up to $500 million, along with a Revolving Credit Facility of up to $1.1 billion[253] - As of November 30, 2025, the outstanding principal balance on term loans was $1,966 million, an increase from $1,500 million in 2024, with a voluntary prepayment of $275 million made during the fiscal year[259] - The company is in compliance with all debt covenants related to its debt arrangements as of November 30, 2025[266] Cash Flow and Liquidity - Net cash provided by operating activities for fiscal year 2025 was $806.97 million, up from $667.49 million in 2024, primarily due to increased net income and reduced acquisition-related costs[269] - Free cash flow for fiscal year 2025 was $572.47 million, compared to $428.73 million in 2024, reflecting an increase in operating cash flow and a decrease in capital expenditures[274] - Adjusted free cash flow for fiscal year 2025 was $626.40 million, up from $474.52 million in 2024, driven by increased free cash flow and changes in outstanding factoring balances[275] - Total liquidity as of November 30, 2025, was $1,592.4 million, including $1.1 billion in undrawn capacity on the Revolving Credit Facility and $163 million under the Securitization Facility[276] - The company had cash and cash equivalents totaling $329.4 million as of November 30, 2025, with 98% held by non-U.S. legal entities[277] Market and Currency Risks - Approximately 54% of the company's revenue is priced in U.S. dollars, exposing it to foreign currency risk from contracts denominated in euros, British pounds, Japanese yen, and Brazilian real[285] - The company has hedged a portion of its foreign currency exposure by entering into contracts to acquire PHP 43,480.0 million at a fixed price of $750.4 million and INR 28,430.0 million at a fixed price of $320.1 million, both through November 2027[286] - A hypothetical 10% adverse change in foreign currency exchange rates could result in a potential loss of approximately $105.0 million in fair value for the company's hedging contracts[286] - The company’s variable-rate debt exposes it to interest rate risk, with a 100 basis point increase in interest rates estimated to increase interest expense by approximately $24.4 million per year[288] Tax and Regulatory Matters - The company has established a reserve of $95.0 million for unrecognized tax benefits as of November 30, 2025[281] - Provision for income taxes increased by 101.2% to $96,702,000, influenced by geographical income mix and foreign tax rate changes[230] Operational Efficiency - Selling, general and administrative expenses decreased by 0.9% to $2,825,468,000, representing 28.8% of revenue, down from 29.7%[222] - The company manages market risks through regular operating and financing activities and the use of derivative financial instruments[284] - The company recognizes foreign exchange exposure due to costs being denominated in local currencies where services are performed, impacting overall financial performance[286]

Core Insights - Concentrix Corporation has achieved an 'A' score for Climate Change leadership from CDP, ranking in the top 2% among nearly 20,000 companies assessed globally in 2025 [1][2] Sustainability Goals - The company has set ambitious sustainability goals, including validation of emissions near-term targets by the Science Based Targets Initiative (SBTi), which it is on track to meet [3] - Since 2019, Concentrix has reduced CO₂ emissions by 27% and currently sources 35% of its power from renewable energy [3] - In 2025, the company planted over one million trees and certified more than half of its owned buildings to internal sustainability standards [3] Strategic Vision - Achieving an 'A' on the CDP assessment reflects Concentrix's commitment to rethinking operations for a sustainable future, aiming to create lasting value for business and communities [4] - The recognition accelerates progress toward the company's 2030 ESG goals, emphasizing the belief that responsible business practices should create real impact [4]

Core Insights - iREIT+HOYA Capital focuses on income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging [1][2] Group 1: Investment Strategy - The investment strategy emphasizes high-yield, dividend growth ideas, targeting dividend yields up to 10% [2] - The service offers research on various asset classes including REITs, ETFs, closed-end funds, preferreds, and dividend champions [2] Group 2: Target Audience - The service is designed for investors seeking dependable monthly income and portfolio diversification [2] - It caters to those with a medium- to long-term investment horizon, focusing on defensive stocks [2]

Core Insights - iREIT+HOYA Capital focuses on income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging [1][2] Group 1: Investment Strategy - The investment strategy emphasizes high-yield, dividend growth ideas, targeting dividend yields up to 10% [2] - The service offers research on various asset classes including REITs, ETFs, closed-end funds, preferreds, and dividend champions [2] Group 2: Target Audience - The service is designed for investors seeking dependable monthly income and portfolio diversification [2] - It caters to those with a medium- to long-term investment horizon, focusing on defensive stocks [2]