TIXT Stock Forecast & Price Target

TELUS International (Cda) Inc. has demonstrated robust financial growth, with revenue from its second-largest client, Google, increasing by 12% year-over-year and contributing to 39% of total revenues in the first half of 2024. Additionally, the company's revenue from its parent, TELUS, surged approximately 30% year-over-year, complemented by a significant increase in free cash flow of 44%, totaling $95 million during the quarter. The leverage ratio also showed improvement, rising to 2.8x, suggesting a healthier financial position that supports ongoing strategic efforts to diversify client services and mitigate risks associated with client concentration.

TELUS International (Cda) Inc. faces a negative outlook due to a weak second-quarter performance and a reduction in guidance, which highlights a lack of visibility into its customer base and ongoing demand pressures. The company's revenue guidance for fiscal year 2024 indicates a decline of 2% to 4% year-over-year, significantly lowered from previous estimates, reflecting challenges in growth beyond its largest clients. Additionally, the organic growth rate, excluding the impact of its top clients, has shown a continued decline, further underscoring the persistent weakness in demand and an uncertain path to recovery.