What Happened?
A number of stocks fell in the afternoon session after a surprisingly weak U.S. jobs report was released, fueling concerns about a slowing economy. The U.S. economy added only 73,000 jobs, falling significantly short of economists' expectations, while figures for May and June were revised down, erasing 258,000 previously reported jobs. The professional and business services industry itself shed 14,000 jobs. This data points to a cooling labor market, fueling concerns of a slowing economy. A weaker economic outlook often leads to reduced corporate spending on key services like IT consulting and professional staffing, which directly impacts the sector's revenue and growth prospects. The report immediately increased investor expectations of an interest rate cut by the Federal Reserve.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Electronic Components & Manufacturing company TTM Technologies (NASDAQ: TTMI) fell 6.7%. Is now the time to buy TTM Technologies? Access our full analysis report here, it’s free.
- Enterprise Networking company Applied Digital (NASDAQ: APLD) fell 3%. Is now the time to buy Applied Digital? Access our full analysis report here, it’s free.
- Hardware & Infrastructure company Pure Storage (NYSE: PSTG) fell 6.5%. Is now the time to buy Pure Storage? Access our full analysis report here, it’s free.
- Business Process Outsourcing & Consulting company Concentrix (NASDAQ: CNXC) fell 9.7%. Is now the time to buy Concentrix? Access our full analysis report here, it’s free.
- Traditional Media & Publishing company Sinclair (NASDAQ: SBGI) fell 3%. Is now the time to buy Sinclair? Access our full analysis report here, it’s free.
Zooming In On Concentrix (CNXC)
Concentrix’s shares are very volatile and have had 22 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 4 months ago when the stock gained 38% on the news that the company reported impressive first quarter 2025 results which beat analysts' EPS and EBITDA expectations. Adjusting for currency swings, revenue managed to inch up a bit, with momentum driven by demand for the company's AI offerings, and this could partly be responsible for the improved market optimism. Adding to the positive aspect, it slightly lifted its revenue guidance for the full year, given the outperformance recorded during the quarter. Overall, this quarter had some key positives.
Concentrix is up 6.6% since the beginning of the year, but at $46.41 per share, it is still trading 38.6% below its 52-week high of $75.58 from August 2024.
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