TELUS International (CDA) (TIXT) AI Stock Analysis

• Market Cap: $1.70B
• Dividend Yield: N/A
• Average Volume (3M): 281.00K
• Price to Earnings (P/E): 36.0
• Beta (1Y): 1.98
• Revenue Growth: 5.06%
• EPS Growth: -638.59%
• Country: CA
• Employees: 78,879
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 0.08
• Shares Outstanding: 111,490,166
• 10 Day Avg. Volume: 279,557
• 30 Day Avg. Volume: 280,997
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.94
• Enterprise Value/Revenue: 1.21
• Enterprise Value/Gross Profit: 1.51
• Enterprise Value/Ebitda: 11.26
• 1Y Price Target: $6.19
• Price Target Upside: 0.87% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 10

• Rating: 55 Neutral
• Price Target: C$6.50 ▲(5.86% Upside)

TELUS International's stock score is primarily influenced by its financial performance challenges, including negative profitability and increased leverage. Despite these issues, the stock shows strong technical momentum, which partially offsets the financial concerns. However, the negative P/E ratio and lack of dividend yield weigh heavily on the valuation, resulting in a moderate overall score.

Positive Factors

Negative Factors

TELUS International (CDA) Business Overview & Revenue Model

Company Description

TELUS International (CDA) Inc. (TIXT) is a Canadian company that designs, builds, and delivers next-generation digital solutions to enhance the customer experience. The company operates in sectors such as technology, financial services, communications and media, eCommerce, and healthcare. TELUS International offers a range of services including digital strategy, AI and machine learning solutions, content moderation, and customer service support.

How the Company Makes Money

TELUS International generates revenue primarily through its comprehensive suite of digital transformation solutions and customer experience management services. The company earns money by providing end-to-end solutions that help businesses improve their customer interactions and operational efficiencies. Key revenue streams include digital IT services, AI-powered content moderation, and customer service outsourcing. TELUS International partners with major global brands across various industries to offer tailored services that meet their specific needs, contributing significantly to its earnings. The company's growth is supported by its ability to innovate and integrate advanced technologies into its service offerings, thereby attracting a diverse client base and securing long-term contracts.

TELUS International (CDA) Financial Statement Overview

Summary

TELUS International is facing profitability challenges, with negative net income and declining margins. The balance sheet shows increased leverage, posing potential risks. Cash flow generation is under pressure, with declining free cash flow growth. Improvement in operational efficiency and debt management is needed.

Income Statement

TELUS International has shown a slight revenue growth in the TTM period, but the company is struggling with profitability. The gross profit margin remains strong, but the net profit margin has turned negative, indicating challenges in managing costs and achieving profitability. The negative EBIT margin further highlights operational inefficiencies.

Balance Sheet

The company's debt-to-equity ratio has increased, indicating a higher reliance on debt financing, which could pose a risk if not managed properly. The return on equity is negative, reflecting the company's current unprofitability. However, the equity ratio remains stable, suggesting a balanced asset structure.

Cash Flow

The cash flow situation shows a decline in free cash flow growth, which is concerning. The operating cash flow to net income ratio is positive, indicating that the company is generating cash from operations despite net losses. However, the free cash flow to net income ratio has decreased, reflecting challenges in converting earnings into free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.72B	2.66B	2.71B	2.47B	2.19B	1.58B
Gross Profit	2.18B	2.15B	2.25B	2.00B	1.76B	1.28B
EBITDA	293.00M	437.00M	523.43M	527.25M	439.10M	396.92M
Net Income	-383.00M	-61.00M	54.00M	183.00M	78.00M	103.00M
Balance Sheet
Total Assets	4.44B	4.52B	4.82B	3.56B	3.63B	3.74B
Cash, Cash Equivalents and Short-Term Investments	151.00M	174.00M	131.00M	125.00M	115.00M	152.50M
Total Debt	1.56B	1.52B	1.75B	964.00M	1.15B	1.77B
Total Liabilities	2.75B	2.58B	2.79B	1.72B	1.97B	2.63B
Stockholders Equity	1.69B	1.95B	2.04B	1.84B	1.66B	1.11B
Cash Flow
Free Cash Flow	287.00M	412.00M	409.00M	332.00M	183.00M	237.00M
Operating Cash Flow	399.00M	517.00M	498.00M	437.00M	282.00M	297.00M
Investing Cash Flow	-112.00M	-107.00M	-941.00M	-119.00M	-110.00M	-1.87B
Financing Cash Flow	-297.00M	-361.00M	443.00M	-300.00M	-206.00M	1.66B

TELUS International (CDA) Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6.14
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TIXT, the sentiment is Positive. The current price of 6.14 is above the 20-day moving average (MA) of 6.00, above the 50-day MA of 5.58, and above the 200-day MA of 4.79, indicating a bullish trend. The MACD of 0.20 indicates Positive momentum. The RSI at 65.05 is Neutral, neither overbought nor oversold. The STOCH value of 14.41 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:TIXT.

TELUS International (CDA) Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CVO	69 Neutral	871.33M	-28.43	-18.58%	―	10.09%	-8.79%
STC	60 Neutral	234.64M	-32.97	0.00%	―	-1.46%	40.89%
BB	57 Neutral	3.62B	-54.74	-11.03%	―	-8.84%	70.97%
TIXT	55 Neutral	$1.70B	35.99	-20.44%	―	5.06%	-638.59%
DND	55 Neutral	586.40M	-3.71	0.00%	0.88%	2.47%	19.37%
NOW	38 Underperform	30.13M	-225.00	85.52%	―	-13.50%	96.77%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

TELUS International (CDA) Corporate Events

TELUS Digital Forms Special Committee to Review Acquisition Proposal

TELUS Digital has formed a special committee to evaluate an unsolicited non-binding proposal from TELUS Corporation to acquire all outstanding shares of TELUS Digital. The committee, composed of independent directors, has engaged legal and financial advisors to ensure a thorough review process. The company emphasizes transparency and is committed to acting in the best interests of all stakeholders, though no decisions have been made regarding the proposal.

The most recent analyst rating on (TSE:TIXT) stock is a Hold with a C$3.40 price target. To see the full list of analyst forecasts on TELUS International (CDA) stock, see the TSE:TIXT Stock Forecast page.

TELUS Digital Receives Acquisition Proposal from TELUS Corporation

TELUS Digital has received a non-binding proposal from TELUS Corporation to acquire all outstanding shares not already owned by the corporation for US$3.40 per share. The proposal is contingent upon several conditions, including due diligence and shareholder approval. TELUS Digital’s board plans to form a special committee to review the proposal, but no decisions have been made yet, and shareholders are advised that no action is required at this time.

The most recent analyst rating on (TSE:TIXT) stock is a Hold with a C$7.00 price target. To see the full list of analyst forecasts on TELUS International (CDA) stock, see the TSE:TIXT Stock Forecast page.