Latest news with #TelusInternational
Yahoo
01-08-2025
- Business
- Yahoo
Telus International (TIXT) Q2 Earnings and Revenues Beat Estimates
Telus International (TIXT) came out with quarterly earnings of $0.06 per share, beating the Zacks Consensus Estimate of $0.05 per share. This compares to earnings of $0.16 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +20.00%. A quarter ago, it was expected that this digital services provider would post earnings of $0.06 per share when it actually produced earnings of $0.06, delivering no surprise. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Telus International, which belongs to the Zacks Internet - Software industry, posted revenues of $699 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 5.93%. This compares to year-ago revenues of $652 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Telus International shares have lost about 3.8% since the beginning of the year versus the S&P 500's gain of 7.8%. What's Next for Telus International? While Telus International has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Telus International was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.09 on $675.26 million in revenues for the coming quarter and $0.32 on $2.71 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the top 31% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Diebold Nixdorf, Incorporated (DBD), has yet to report results for the quarter ended June 2025. The results are expected to be released on August 6. This company is expected to post quarterly earnings of $0.61 per share in its upcoming report, which represents a year-over-year change of -47.4%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Diebold Nixdorf, Incorporated's revenues are expected to be $886.1 million, down 5.7% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Telus Digital (TIXT) : Free Stock Analysis Report Diebold Nixdorf, Incorporated (DBD) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Globe and Mail
03-07-2025
- Business
- Globe and Mail
Why Telus International shares may offer upside as a higher buyout offer looms
In a market where tech investors are increasingly searching for asymmetric risk-reward opportunities, Telus International (Canada) Inc. TIXT-T has emerged as an intriguing candidate. In June, 2025, Telus Corporation TU-N proposed to acquire the 42.6 per cent of Telus International – also known as Telus Digital – it doesn't already own for US$3.40 per share. However, Telus International's stock is currently trading at a premium to this offer, signalling market anticipation of a higher final price. Telus International offers a special situation: A solid floor supported by a credible acquisition offer, paired with a reasonable probability of a revised, higher bid. Telus International is a digital services and customer experience outsourcing firm with a presence in over 30 countries. It offers a combination of digital IT services, traditional business process outsourcing services, AI data annotation and content moderation – capabilities that support not only third-party clients such as Google, but also Telus Corp.'s T-T growing health care, agriculture and telecom divisions. Telus International's 2021 initial public offering on the Toronto Stock Exchange was one of the largest tech IPOs in the TSX's history, priced at US$25 per share. Since then, however, the stock has experienced a significant decline, a result of both broader market conditions and internal missteps. This precipitous drop in share price exemplifies what Benjamin Graham, the father of value investing, famously described as the 'manic-depressive' nature of Mr. Market, whose moods can swing wildly and often irrationally. Telecom giants taking action to address the debt elephant in the room David Berman: The question now facing telecom investors: Why bother? Telus International's underlying health isn't as bleak as the market might suggest. For 2025, the firm projects revenues of around US$2.7-billion and adjusted EBITDA of approximately US$400-million. After a period of macroeconomic challenges, the company's key markets are showing signs of recovery, which should lead to higher revenues and earnings going forward. Artificial intelligence also presents a significant opportunity as Telus International plays a key role in enabling AI solutions for its clients. From Telus Corp.'s perspective, full control of Telus International is strategically important. In a statement, Darren Entwistle, Telus Corp.'s CEO, said this transaction enables enhanced AI capabilities and SaaS transformation across its lines of business, including health care, agriculture, telecom and customer service. Telus Corp. has repeatedly emphasized the importance of digital transformation in its earnings calls which makes Telus International a 'must-have' asset, not merely a financial investment. Yet, Telus Corp.'s current offer significantly undervalues Telus International, proposing multiples of just 0.8 times revenue and 5.7 times adjusted EBITDA. These figures stand notably below valuations observed in comparable industry transactions. For instance, in May 2025, TaskUs, a close peer to Telus International, was taken private at 1.4 times revenue and nearly seven times adjusted EBITDA. Similarly, in August 2023, Majorel was acquired for 1.4 times revenue and eight times adjusted EBITDA. Opinion: Telus fails to deliver on Entwistle's IPO-based growth strategy We contend that a 7-8 times adjusted EBITDA multiple is more appropriate for Telus International. This is not only justified by recent peer transactions, but also by the fact that Telus International represents a higher-quality business than many of its direct peers. Telus International has a strong presence in the growing digital IT transformation segment, a capability significantly bolstered by its acquisition of WillowTree (at an estimated 20 times EV/EBITDA). Moreover, the prevailing cyclical upturn within the industry provides additional justification for a premium valuation. This situation is a bellwether for how Canadian companies manage the relationship between parent firms and publicly traded subsidiaries. If controlling shareholders can privatize undervalued assets with minimal oversight or resistance, it erodes confidence in the fairness of the market. Telus has long stood for excellence in Canadian telecommunications. Now, it has an opportunity – and an obligation – to extend that reputation to corporate governance. While Telus Corp. holds over 85 per cent of voting rights, the board of Telus International has established a special committee of independent directors to evaluate the proposal. Their fiduciary responsibility is to minority shareholders and not the parent company. The disparity in Telus International's valuation versus peers is also unlikely to go unnoticed, particularly by institutional shareholders or proxy advisory firms which have an increasing say on how minority shareholders vote their shares. For investors buying Telus International stock today, the downside is limited by the current US$3.40 takeout offer, which provides a soft floor. But if the board negotiates an improved offer – say to US$5.00-7.00, which would be more in line with peer EV/EBITDA multiples – investors potentially stand to make substantial gains. Telus International's current pricing reflects a special situation in transition – a deal that makes sense for the parent, but not yet for minority holders. Whether driven by the board's negotiation, shareholder advocacy or external pressure, the odds of a revised bid are meaningful – and that makes the stock worth a close look for investors with a taste for catalyst-driven value. Balkar Sivia is the founder and portfolio manager of White Falcon Capital Management Ltd. ( Disclosure: The author and the accounts he manages at White Falcon own shares in Telus International.
Yahoo
13-06-2025
- Business
- Yahoo
Stifel ‘wouldn't rule out' competing bid for Telus International
After Telus Digital Experience (TIXT) confirmed the receipt of a proposal from Telus (TU) to acquire 100% of the outstanding shares of Telus Digital not already owned by Telus Corporation for $3.40 per share, Stifel noted that Telus in the past has reiterated no interest in buying back Telus Digital, but the bid 'doesn't come as a total surprise to us' given the opportunity for Telus to insource Telus Digital at a more favorable valuation and restructure it to focus on higher-growth, higher-margin business. The firm sees Telus Digital as 'an attractive asset in light of a consolidating industry,' with strong and sustaining relationships with key customers like Google (GOOGL) and Meta (META), so it 'would not rule out a competing bid,' the analyst tells investors. Stifel has a Buy rating on Telus Digital shares. Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter Published first on TheFly – the ultimate source for real-time, market-moving breaking financial news. Try Now>> See the top stocks recommended by analysts >> Read More on TIXT: Disclaimer & DisclosureReport an Issue Telus International rises 19.9% Telus International rises 21.6% Buy Recommendation for TELUS International (CDA) Driven by Strategic Acquisition and Synergy Potential Telus International gets Telus proposal to buy the company for $3.40 per share TELUS Digital Receives Acquisition Proposal from TELUS Corporation Error al recuperar los datos Inicia sesión para acceder a tu cartera de valores Error al recuperar los datos Error al recuperar los datos Error al recuperar los datos Error al recuperar los datos
Globe and Mail
12-06-2025
- Business
- Globe and Mail
Telus fails to deliver on Entwistle's IPO-based growth strategy
Would anyone buy another initial public offering promoted by long-serving Telus Corp. T-T chief executive officer Darren Entwistle? If the answer to that question is no, Mr. Entwistle's growth strategy at Telus is dead in the water. And it's hard to imagine investors stepping up for future Telus spinoffs after Tuesday's announcement that the parent company wants to put troubled offspring Telus International (Cda) Inc. TIXT-T out of its public market misery. Telus is offering to buy out shareholders in its subsidiary at a steep 86-per-cent discount to the price of its IPO, done with considerable fanfare just four years ago. Mr. Entwistle, a dominating personality who has been at the helm for 25 years, built Telus beyond its legacy phone networks by investing billions in subsidiaries focused on digital customer services, health care and agriculture. The idea was to incubate these businesses inside the Vancouver-based telecom, then launch them as public companies, with Telus shareholders reaping rewards from the value created on Mr. Entwistle's watch. Telus International – rebranded in 2024 as Telus Digital Experience – was meant to be the first in a series of spinoffs. Telus Health is up next, with an IPO anticipated as early as 2026. The incubator concept initially looked like a winner, as Telus Digital went public in 2021 at US$25 per share in what the parent company proudly heralded as the largest tech IPO in Toronto Stock Exchange history. At the time, Telus Digital's US$8.5-billion market capitalization rivalled that of the parent telecom. Execution failed to match ambition. Telus Digital proved a case study in value destruction. The company's challenges include a core business that runs call centres for clients such as retailers, hotels and banks. Artificial intelligence-based systems now dominate this space. Telus Digital proved slow to pivot, and customers moved on. On Wednesday, Telus reversed field by making a 'non-binding indication of interest,' or IOI, to acquire the 42.6 per cent of Telus Digital shares it doesn't own for US$3.40 each. Telus Digital shares promptly jumped 24 per cent Thursday to close at US$3.67 on expectations the parent company will be forced to goose its bid to get a deal done. Mr. Entwistle put a brave face on Telus Digital's face plant. In announcing the IOI, he said reintegrating the unit's tech expertise will benefit all of Telus's businesses, including telecom. While that may be true, buying back the subsidiary is an admission of failure. Telus set lofty goals for its diversification strategy, then failed to hit them. Telus proposes buying back Telus Digital for more than US$400-million Telus Health prepares to stand alone after years of acquisitions 'Today's rather dismal proposal has no 'congratulatory' terms that were to be found at the time of the IPO,' said analyst Tyler Tebbs at Tebbs Capital in a report. He said Telus is only offering to repurchase its subsidiary after failing to find a buyer for the business. Memories are long in financial circles. Mr. Tebbs compared the Telus offer to the ill-fated M&A at Time Warner Inc. in the recent past. He said the buyback 'is yet another example of a telecom/media company reversing a transaction done in much better times at the expense of shareholders.' In public markets, you're only as good as your last deal. Fund mangers got caught up in a craze for all things digital during the early days of the pandemic. That dynamic set the stage for a successful IPO at Telus Digital. The second time around, institutional and retail investors will be far more skeptical about buying when Mr. Entwistle is selling. To get an IPO done at Telus Health or Telus Agriculture, the parent company will likely be forced to accept a steep discount to the underlying value of the business, which defeats the purpose of the incubator concept. Yet without the ability to exit investments, Mr. Entwistle is running a debt-heavy conglomerate, anchored by a well-run but slow-growth telecom network that qualifies as critical infrastructure for the Canadian economy. Outside of founder-run businesses, it's hard to name a domestic public company more identified with its CEO than Telus. At Telus Digital, Mr. Entwistle's IPO-based growth strategy failed to deliver. The Telus board, chaired by former deputy prime minister John Manley, needs to ask hard questions about what comes next and who is best positioned to lead a business that has become the vision of a single executive.
Yahoo
12-06-2025
- Business
- Yahoo
Telus International shares surge following buyout proposal from parent Telus Corp
-- Shares of Telus (NYSE:TU) International (TSX:TIXT) surged more than 24% on Thursday after receiving an unsolicited acquisition proposal from majority owner Telus Corp (TSX:T). The Canadian telecom giant offered $3.40 per share in cash for the remaining equity it does not already own in the digital services provider. Telus Corp currently holds 57.4% of Telus International's total outstanding shares and close to 87% of all voting rights. Following the announcement, Telus Corp's own shares edged up 0.7% in trading. The acquisition is subject to several conditions, including due diligence, negotiation of definitive agreements, and regulatory clearances in Canada and the U.S. Telus International emphasized that no binding agreement has been signed and that there is no guarantee the transaction will be finalized. A special committee of independent directors will be formed to review and assess the proposal, according to the company. "Given the structural challenges and uncertain demand backdrop, along with the preexisting partnership and ownership of Telus Corp, we expect the proposed acquisition to close without many hurdles," said Maggie Nolan, an analyst at William Blair. She maintained a Market Perform rating on the stock, adding, "The macroeconomic backdrop has pressured growth prospects in the near term, and we expect that Telus Digital's margins will remain under pressure due to challenges with the recent cost optimization initiatives, pricing pressure from competitive forces, and a mix shift into more AI-related solutions." Management at Telus Corp. sees the transaction as a strategic maneuver that could align digital strategy and capital allocation across the broader Telus ecosystem. The company aims to integrate Telus Digital's capabilities to strengthen initiatives across its telecom, healthcare, and agricultural units. While the offer reaffirms Telus Corp's commitment to accelerating digital innovation and operational synergy, governance processes related to shareholder fairness are expected to play a pivotal role. Telus International reiterated that all strategic alternatives remain under consideration. Related articles Telus International shares surge following buyout proposal from parent Telus Corp GameStop bets on trading cards, stock continues slide FTSE 100 today: shares rise as U.K. GDP falls; Pound nears $1.36; Tesco gains Sign in to access your portfolio
