Why Genpact (G) Is Down Today

NEW YORK (TheStreet) -- Genpact  (G) was plummeting 15.90% to $14.49 on Friday after the business process management company announced a fourth-quarter decline in net income.

Net income fell to $48.8 million from $53.4 million in the same quarter a year earlier. Per-share earnings fell to 21 cents a share from 23 cents a year earlier. Adjusted EPS was 25 cents a share, unchanged from a year earlier. Net income margin narrowed to 8.7% from 10.5% a year earlier. 

Revenue in the fourth quarter increased 10% year over year to $558.5 million from $507.7 million.

TheStreet Ratings team rates GENPACT LTD as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate GENPACT LTD (G) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, compelling growth in net income and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 18.4%. Since the same quarter one year prior, revenues slightly increased by 8.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.55, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, G has a quick ratio of 1.99, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the IT Services industry. The net income increased by 179.1% when compared to the same quarter one year prior, rising from $25.18 million to $70.26 million.
  • Net operating cash flow has significantly increased by 62.19% to $125.54 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 24.56%.
  • You can view the full analysis from the report here: G Ratings Report

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