Is TIXT stock a buy?

Its first quarter results are in the books and National Bank Financials analyst Richard Tse is feeling less bullish about Telus International (Telus International Stock Quote, Chart, News, Analysts, Financials TSX:TIXT).

On May 9, TIXT reported its Q1, 2024 results. The company posted Adjusted EBITDA of $152-million on revenue of $657-million, a topline that was down 4% year-over-year.

“Telus International delivered first quarter results in line with our expectations, amidst a backdrop of lingering macroeconomic pressures,” CEO Jeff Puritt said. “At all levels and across all areas of our organization, we continue to focus on further establishing ourselves as the AI-fuelled customer experience partner of choice by our clients, prospects and partners, as well as throughout the industry based on our differentiated end-to-end service offerings and expertise. With this objective in mind, we are starting to see the success of our efforts manifest through the client mandates we are winning, the continued evolution of our capabilities, the partnerships we are forming and the industry recognition we are receiving.”

Tse says TIXT is not a cheap stock, currently.

“Consistent with our earnings preview, TI pointed to (a continued) challenging environment with elongated sales cycles and some customers paring back service levels, particularly in Europe as a Top 3 (“Leading Social Media”) client had another quarter of reduced volume, representing