A month has gone by since the last earnings report for Genpact (G Quick QuoteG - Free Report) . Shares have lost about 2% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Genpact due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Genpact Surpasses Q3 Earnings and Revenues Estimates

Genpact Limited reported impressive third-quarter 2022 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate.

Adjusted EPS (excluding 24 cents from non-recurring items) of 75 cents outpaced the Zacks Consensus Estimate by 10.3% and climbed 13.6% year over year. Revenues of $1.11 billion beat the consensus estimate by 3% and increased 9.4% year over year on a reported basis and 12% on a constant-currency (cc) basis.

Quarterly Details

Data-Tech-AI services revenues (representing 46% of total revenues) climbed 19% year over year on a reported basis and 21% at cc to $510 million. Digital Operations services revenues of $601 million were up 2% year over year (6% at cc) and contributed 54% to total revenues.   Adjusted income from operations totaled $189 million, up 12% year over year. Adjusted operating income margin of 17.1% surged 50 basis points (bps) year over year.

Genpact exited the quarter with cash and cash equivalents of $518.7 million compared with $460.4 million recorded at the end of the previous quarter. Long-term debt totaled $1.3 billion compared to $746.6 million reported in the prior quarter. G generated $202.1 million cash from operating activities, while capex was $8.4 million. Genpact returned $22.8 million to its shareholders through dividends and $30 million through share repurchases in the quarter.

2022 Guidance

Revenues are now anticipated between $4.32 billion and $4.355 billion (prior view: $4.32 billion and $4.37 billion). Genpact’s guided range for adjusted EPS is $2.69-$2.74 (prior view: $2.68-$2.74). Management still expects the adjusted-income-from-operations margin at the upper end of the prior outlook of 16.0-16.5%.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month.

The consensus estimate has shifted -7.88% due to these changes.

VGM Scores

Currently, Genpact has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Genpact has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Genpact is part of the Zacks Outsourcing industry. Over the past month, Automatic Data Processing (ADP Quick QuoteADP - Free Report) , a stock from the same industry, has gained 2%. The company reported its results for the quarter ended September 2022 more than a month ago.

ADP reported revenues of $4.22 billion in the last reported quarter, representing a year-over-year change of +10%. EPS of $1.86 for the same period compares with $1.65 a year ago.

ADP is expected to post earnings of $1.95 per share for the current quarter, representing a year-over-year change of +18.2%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for ADP. Also, the stock has a VGM Score of C.