William Blair initiated research coverage of AgileThought, Inc. (AGIL $9.53), a digital transformation and agile software development service provider for Fortune 1,000 customers. The company is based in Irving, Texas, and has several delivery centers in Mexico, Brazil, Argentina, Costa Rica, and the United States.
Analyst Maggie Nolan believes the company can generate double-digit revenue growth and expanding margins to drive double-digit organic EPS growth annually and positive free cash flow over the long term. Nolan estimates AgileThought to record revenue of $159 million in 2021 and $190 million in 2022.
“We believe that management has successfully focused AgileThought on being a digital transformation service provider,” Nolan said. “Led by founder and CEO Manuel Senderos, AgileThought strategically doubled down on high-growth digital transformation services, disposed of noncore service offerings, made significant investments in its salesforce, and reoriented the business toward the U.S. market. With over 2,000 employees in Latin America, and as one of the largest IT service providers in the region, AgileThought has a differentiated positioning in an increasingly sought-after IT services delivery geography. We believe AgileThought will benefit from exposure to Latin America, a nearshore and culturally compatible region to its primary client market, the United States.”
Nolan continued, “AgileThought maintains a well-balanced business generating revenue across multiple industry verticals. We believe conditions are set for agile IT service providers like AgileThought to benefit from robust secular demand for digital transformation services and increasingly for nearshore delivery, particularly in Latin America and Mexico. The company’s accelerating commercial momentum, focused strategic objectives, and strong blue-chip client base, in addition to favorable macro trends, provide ample long-term opportunities for growth.”
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Current Ratings Distribution (as of 10/4/21)
Outperform (Buy): 76%
Market Perform (Hold): 23%
Underperform (Sell): 1%
Inv. Banking Relationships*
Outperform (Buy): 30%
Market Perform (Hold): 13%
Underperform (Sell): 0%
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