With 2024 revenue exceeding €10B, Teleperformance is the global leader in the business process outsourcing and customer experience management industry. The first thing people think about after hearing that is call centers and indeed they are a big part of TP’s operations. So it is hardly surprising that the launch of ChatGPT in late-2022 turned what until then was a regular pullback into an actual stock price crash.
As of this writing, Teleperformance is down 75% since the beginning of 2022. At one point last month, it dipped to €77 a share, down 81% from its all-time high at €402. This is what the mere fear of disruption can do to a company’s valuation. But in reality, three years into the ChatGPT revolution, TP has yet to feel the impact. Most of the tasks its employees do are quite complex and a chatbot simply cannot replace them that easily.
Sales have continued to grow at their usual low-to-mid single-digit pace and free cash flows have never been higher at €1.1B in 2024. The company is guiding for at least another billion euro in FCF in 2025 and sales growth between 3% and 5%. With a market cap of less than €6B, Teleperformance surely looks like a bargain right now. And the best part is that Elliott Wave analysis, too, points to a rebound ahead.
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TP’s daily chart reveals the structure of the decline from €402 to €77. It looks like a complete double zigzag correction, marked (W)-(X)-(Y), where both waves (W) and (Y) are simple A-B-C zigzags. What interests us most here is that wave C of (Y) took the shape of an ending diagonal pattern, labeled 1-2-3-4-5.
As is mandatory in an ending diagonal, all five waves have corrective structures. It is usually wave ‘b’ of 3, which might pierce the upper line of the pattern, but in this case it is wave ‘a’ piercing the lower one. This doesn’t violate the Elliott Wave rules in any way. What matters is the structure and shape of the pattern as a whole.
If this count is correct, the crash from €402 is finally over at €77 and the rise to just under €100 so far must be the beginning of a much bigger recovery in Teleperformance stock. It would take a lot of investor exuberance to lift the price to a new record, but €200 sounds like a reasonable initial target given the company’s low valuation. That’s why we’ve added TP to our portfolio along with 13 other stock positions.
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