Dj Omnicom Group Inc. Stock Outperforms Competitors Despite Losses On The Day

Genpact Limited G reported impressive third-quarter 2024 results, beating the Zacks Consensus Estimate on both counts.

The stock has soared 11.6% since the release of results on Nov. 7, as a positive response to the better-than-expected result and strong 2024 guidance.

Genpact raised its 2024 guidance. It currently expects revenues to be between $4.74 billion and $4.751 billion compared with the prior expectation of $4.656 billion and $4.701 billion. The revised guided range is above the current Zacks Consensus Estimate of $4.73 billion.

Adjusted EPS is expected to be in the range of $3.23 to $3.24 compared with the prior expectation of $3.14 to $3.18. The revised guided range is above the current Zacks Consensus Estimate of $3.16. The gross margin is anticipated to be around 35.4% compared with 35.3% anticipated earlier. Adjusted income from operating margin is expected to be 17.1%, while the prior expectation was 17%.

Quarterly EPS of 85 cents surpassed the consensus estimate by 6.3% and grew 11.8% year over year. Revenues of $1.21 billion beat the consensus mark by 2% and increased 6.6% from the year-ago quarter.

Genpact Limited Price, Consensus and EPS Surprise

Genpact Limited price-consensus-eps-surprise-chart | Genpact Limited Quote

Other Quarterly Details of G

Data-Tech-AI services revenues (representing 47% of total revenues) increased 9% year over year on a reported, as well as constant currency basis to $569 million, surpassing our estimate of $547.3 million. Digital Operations services revenues of $642 million (53% of total revenues) increased 5% from the year-ago quarter’s actuals on a reported basis and at cc, beating our estimate of $636.1 million.

Adjusted income from operations totaled $213 million and grew 9% on a year-over-year basis. Adjusted operating income margin of 17.6% increased 40 basis points year over year.

Genpact exited the quarter with cash and cash equivalents of $1 billion compared with $914.2 million reported at the end of the preceding quarter. Long-term debt (less current portion) was $1.2 billion, flat with the prior quarter.

The company generated $228 million in cash from operating activities, while capital expenditure was $19.8 million. Genpact returned $26.9 million in dividends to shareholders and repurchased shares worth $75 million.

G’s Q4 Guidance

For the fourth quarter of 2024, Genpact expects revenues to be between $1.222 billion and $1.233 billion, the midpoint of which is in line with the current Zacks Consensus Estimate of $1.23. Gross margin and adjusted income from operating margin are anticipated to be around 35.6% and 17.6%, respectively.

G currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Earnings Snapshots

Omnicom OMC reported impressive third-quarter 2024 results, wherein both earnings and revenues beat the Zacks Consensus Estimate.

OMC’s earnings of $2 per share beat the consensus estimate by 3.1% and increased 9.1% year over year. Total revenues of $3.9 billion surpassed the consensus estimate by 2.3% and increased 8.5% year over year.

Equifax EFX reported mixed third-quarter 2024 results, wherein earnings surpassed the Zacks Consensus Estimate while revenues missed the same.

EFX’s adjusted earnings were $1.8 per share, beating the Zacks Consensus Estimate by a slight margin and increasing by 5.1% from the year-ago quarter’s actual. Total revenues of $1.4 billion missed the consensus estimate by a slight margin but increased 9.3% from the year-ago quarter.

Zacks Investment Research

Symbotic Inc. SYM is scheduled to release its fourth-quarter fiscal 2024 results on Nov. 18, after market close.

See Zacks Earnings Calendar to stay ahead of market-making news.

The company surpassed the Zacks Consensus Estimate in two of the four trailing quarters and missed on two occasions, delivering an average earnings surprise of 165%.

Symbotic Inc. Price and EPS Surprise

Symbotic Inc. price-eps-surprise | Symbotic Inc. Quote

Symbiotic’s Q4 Expectations

The Zacks Consensus Estimate for SYM’s revenues is pegged at $471.6 million, indicating a 20.3% rise from the year-ago quarter’s actual.

The top line is expected to have benefited from steady progress across the company’s 39 systems in the process of deployment. The completed three systems and five new systems in deployment, which makes a total of 21 fully operational systems, are estimated to have aided the top line as well. The deployment of the first Symbiotic system for Greenbox is anticipated to have fueled revenues .

On the other hand, the gross margin is expected to have declined in the fiscal fourth quarter due to scheduled growth and higher labor costs.

The consensus estimate for the bottom line is pegged at 3 cents, indicating a more than 100% surge from the year-ago quarter’s actual. Prudent expense management is likely to have driven the bottom line.

What Our Model Says About SYM

Our proven model does not conclusively predict an earnings beat for SYM this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks before they are reported with our Earnings ESP Filter.

Symbiotic has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell) at present.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings Snapshot of SYM’s Peers

Omnicom Group Inc. OMC reported impressive third-quarter results.

OMC’s earnings of $2 per share beat the consensus estimate by 3.1% and rose 9.1% from the year-ago quarter. Total revenues of $3.9 billion outpaced the consensus mark by 2.3% and grew 8.5% on a year-over-year basis.

Waste Connections, Inc. WCN reported solid third-quarter 2024 results.

Waste Connections’ adjusted earnings (excluding 16 cents from non-recurring items) of $1.4 per share surpassed the Zacks Consensus Estimate by 3.9% and increased 15.4% on a year-over-year basis. Revenues of $2.3 billion beat the consensus estimate by 2.2% and grew 13.3% from the year-ago quarter’s actual.

Zacks Investment Research

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company value investors might notice is Omnicom Group (OMC). OMC is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

We should also highlight that OMC has a P/B ratio of 4.52. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 6.24. Over the past 12 months, OMC's P/B has been as high as 4.84 and as low as 3.92, with a median of 4.35.

Finally, we should also recognize that OMC has a P/CF ratio of 12.23. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. OMC's P/CF compares to its industry's average P/CF of 13.55. Over the past 52 weeks, OMC's P/CF has been as high as 12.32 and as low as 9.29, with a median of 10.99.

Value investors will likely look at more than just these metrics, but the above data helps show that Omnicom Group is likely undervalued currently. And when considering the strength of its earnings outlook, OMC sticks out at as one of the market's strongest value stocks.

Zacks Investment Research

Avis Budget Group, Inc. CAR reported lower-than-expected third-quarter 2024 results.

See Zacks Earnings Calendar to stay ahead of market-making news.

Despite the earnings miss, the stock has gained 12% since the earnings release on Oct. 31, 2024.

CAR’s earnings of $6.7 per share missed the Zacks Consensus Estimate by 22.2% and decreased 60.4% from the year-ago quarter’s actual. Total revenues of $3.5 billion missed the consensus estimate by 2.3% and declined 2.4% on a year-over-year basis.

Avis Budget’s shares have declined 47.6% in the year-to-date period compared with 4.6% decrease of the industry and 27.7% growth of the Zacks S&P 500 composite.

YTD Price Performance

Avis Budget’s Segmental Revenues

Revenues from the Americas amounted to $2.6 billion, indicating a fall of 4% from the year-ago quarter. The metric missed our estimate of $2.7 billion.

International revenues were $840 million, up 1% on a year-over-year basis. However, the figure missed our expectation of $845.6 million. Strong international inbound and intra-European cross-border travel drove this region’s revenues.

CAR’s Profitability

Adjusted EBITDA was $503 million, down 45% from third-quarter 2023. The Americas segment reported adjusted EBITDA of $384 million, which declined 48% from the year-ago quarter. Internationally, adjusted EBITDA of $139 million decreased 29%.

Balance Sheet and Cash Flow of CAR

Avis Budget exited the third quarter with cash and cash equivalents of $602 million compared with $511 million at the end of the second quarter of 2024. Corporate debt amounted to $6 billion compared with $5.3 billion reported in the preceding quarter.

CAR generated $1.3 billion in net cash from operating activities. Adjusted free cash flow utilized amounted to $600 million. Capital expenditures were $40 million.

Avis Budget currently carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Snapshot of CAR’s Peers

Republic Services, Inc. RSG reported mixed third-quarter 2024 results.

RSG’s earnings per share (excluding 1 cent from non-recurring items) of $1.8 outpaced the Zacks Consensus Estimate by 11.7% and grew 17.5% from the year-ago quarter. Revenues of $4.1 billion missed the consensus mark by a slight margin but increased 6.5% on a year-over-year basis.

Omnicom Group Inc. OMC reported impressive third-quarter 2024 results.

OMC's earnings of $2 per share beat the consensus estimate by 3.1% and rose 9.1% from the year-ago quarter. Total revenues of $3.9 billion outpaced the consensus mark by 2.3% and grew 8.5% on a year-over-year basis.

Fiserv, Inc. FI reported mixed third-quarter 2024 results.

FI’s adjusted earnings per share (excluding $1.3 from non-recurring items) of $2.3 beat the consensus mark by 2.2% and gained 17.4% year over year. Adjusted revenues of $4.9 billion missed the consensus estimate by a slight margin but rose a tad on a year-over-year basis.

Zacks Investment Research