G - Embedded Expectations Analysis - 2020 01 27
Genpact Limited (G:USA) currently trades near corporate averages relative to Uniform Earnings, with a 20.9x Uniform P/E. At these levels, the market has somewhat bearish expectations for the firm, but management is confident about their supply chain and financial services pipeline, total addressable market, and their sole-source deal bookingsSpecifically, management is confident that their acquisitions have led to a fivefold increase in their pipeline for supply chain and financial crimes risk services, and that these services have massive total addressable markets. In addition, they are confident that sole-source deals remain approximately 50% of their bookings
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
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