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Wednesday, Needham analysts increased their price target on WNS Limited (NYSE: NYSE:WNS) shares to $70 from $65, while maintaining a Buy rating. The adjustment follows WNS’s announcement of acquiring Kip.ai, a provider specializing in data modernization and democratization on the Snowflake (NYSE:SNOW) platform. According to InvestingPro data, WNS shares have shown strong momentum with a 24.82% year-to-date return, and the company appears undervalued based on its Fair Value analysis. The acquisition is expected to have a negligible impact on WNS’s fourth-quarter fiscal year 2025 earnings but is projected to contribute approximately 2% to the company’s revenue, excluding repair payments, and be neutral to earnings per share (EPS) in fiscal year 2026. WNS currently maintains strong financial health with a current ratio of 1.81 and operates with a moderate debt level, as revealed by InvestingPro analysis.
Kip.ai brings a broad spectrum of data-related services, including data engineering, advanced analytics, and data science. With roughly 600 employees globally, of which over 450 are data engineers, and its status as a Snowflake Elite Partner, Kip.ai serves a diverse array of industry verticals. The acquisition by WNS aims to enhance the company’s capabilities in addressing the growing client demand for data and AI-based services.
The analyst from Needham expressed a positive outlook on the deal, citing the additional expertise and AI-based resources that Kip.ai will contribute to WNS. The move is seen as a strategic enhancement to WNS’s service offerings in the data and AI domain, which is increasingly sought after by clients.
WNS’s acquisition of Kip.ai is not expected to significantly affect the company’s financials for the fourth quarter of the fiscal year 2025. However, the addition of Kip.ai’s services and capabilities is anticipated to provide a modest boost to WNS’s revenue in the following fiscal year while not affecting the company’s EPS.
In conclusion, Needham’s revised price target reflects confidence in WNS’s strategic acquisition of Kip.ai and the potential for revenue growth driven by expanded data and AI service capabilities. The firm reiterates its Buy rating and highlights the acquisition as an important step for WNS in meeting the evolving needs of its clients. With an EBITDA of $236.65 million in the last twelve months and a market capitalization of $2.37 billion, WNS demonstrates solid fundamentals. For deeper insights into WNS’s financial health and growth potential, including additional ProTips and comprehensive analysis, check out the detailed Pro Research Report available on InvestingPro.
In other recent news, WNS Holdings reported its third-quarter earnings for fiscal year 2024, with net revenue reaching $319.1 million, reflecting a 1% year-over-year growth. The company achieved an earnings per share (EPS) of $1.04, which aligned with market expectations. In a significant development, WNS Limited has acquired Kipi.ai, a company focused on data modernization and AI analytics for the Snowflake platform, to enhance its data, AI, and analytics capabilities globally. The acquisition aims to expand WNS’s offerings without altering Kipi.ai’s operational structure or strategic focus.
Analyst firms have also weighed in on WNS’s performance. Baird analyst David Koning raised the price target for WNS to $66, maintaining an Outperform rating, citing the company’s return to normal sequential growth patterns. Deutsche Bank (ETR:DBKGn) analyst Bryan Keane increased the price target to $54, while maintaining a Hold rating, noting the company’s positive third-quarter results and raised EPS forecast. This revision was influenced by a one-time benefit from the sale of WNS’s Cybercity Tower in Pune, which is expected to add significantly to the company’s adjusted net income and EPS in the fourth quarter of FY25.
WNS Holdings has expressed confidence in returning to high single to low double-digit organic revenue growth in FY26, following the resolution of specific challenges like the loss of a healthcare client. The company continues to expand its AI and GenAI capabilities, positioning itself for future growth.
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