Today, the share price is showing it: -36% over one year, -73% over three years, -75% over five years and -23% over ten years (-7.3% including dividends, to be exact). Result: Teleperformance ended up being kicked out of the CAC 40 last September. This pile-up of calamities has earned it a place in the column that gives investor-relations teams everywhere nightmares: "Shouldn't have invited them...
You still don't have solar panels for 1 euro?
Let's go back a few years. Founded in 1978, Teleperformance in just a few years became a major player in what were still called "call centers". The expression has since been banished because it too strongly evokes battery-farmed workers tasked with flooding ordinary people with promotional phone messages. We now prefer more elegant terms such as "customer-experience manager" or "creator of competitive advantages through integrated digital commercial services".
In call centers, people are happy and put two fingers on their headsets
As the company was expanding nicely, its founder, Daniel Julien, teamed up with Jacques Berrebi within Société Rochefortaise de Communication. That name may ring a bell with some of the more seasoned amongst you, since it was the name under which the company was first listed in Paris, in the last century. The subsidiary and the parent company merged before the internet bubble to become SR Teleperformance (or SRT to its friends). Société Rochefortaise disappeared from the name in 2006 and the modern-day Teleperformance was born. The company had already grown substantially, but it would take until 2012 for it to become a stockmarket thoroughbred.
€13↗️ €402 ↘️€60
After a low of €13 on an autumn evening in 2011, the share embarked on a frenzied rise that would make the American tech stars turn pale. Put simply, Teleperformance racked up 10 consecutive years of gains. On 4 January 2022 came the apotheosis: €402 intraday, after a 31-fold increase in the share price. People didn't know it yet, but that was the first and last time the stock would cross the €400 threshold. The symbolic milestones would keep passing, but in the opposite direction. €300 in 2022. €200 in 2023. €100 in 2024. €70 in 2025. Then €60 just a few days ago, taking us back 11 years.
Teleunderperformance
What has happened over the last three years to trigger such a cataclysm? I could challenge stock-picking enthusiasts and profit-and-loss spelunkers to guess the share's trajectory by looking only at the company's financial performance between 2022 and 2025. Revenue has risen, margins have remained decent and cash generation is not outrageous. Only debt has ballooned after the big acquisition of Majorel. But wiping out one of your main competitors by swallowing it isn't necessarily a bad idea, is it? A simple reading of the accounts shows that the company has come to the end of its strong-growth phase and is clearly on a plateau. But from there to imagining it has lost 75% of its value in the meantime, there's a gap that has to be filled with something else. In fact, with several other things.
Like Apple, but not quite
The first factor is purely narrative. Stockmarket success stories work only as long as they work. Yes, I know, that's kicking in an open door, but it's not that stupid: slightly unexpected adventures like Teleperformance's have to be constantly fed to sustain what created them. And the longer time drags on, the truer that becomes. A tech stock can always mystify investors a bit about its distant prospects. A group like Teleperformance, with a workforce of 490,000 people (top 10 worldwide amongst listed companies, no less!) and a fairly straightforward business (acting as a go-between for companies and their customers: products, after-sales service, moderation, etc.) finds it harder to sell a story of blazing tomorrows. By the way, the stock trades at an average of 26x earnings over 10 years, which is a tad more than Apple over the same period. However, Teleperformance went from a ridiculously high level in 2020 (50x) to an extremely low one in 2024 (9.5x). The truth is probably somewhere in between, but certainly not at Apple's level. Especially if we take into account what follows.
Teleperformance's P/E over 10 years, with the average
The second factor that brought Teleperformance to its knees is cyclical: the excesses of the pandemic had to be unwound. During the Covid period, several types of stocks soared. For example, medical equipment or home entertainment. But also all the companies that enabled things to be done remotely. Including Teleperformance, which explains the stratospheric level reached by the P/E in 2020 (50x, if you've been following). The market's rotation toward other, less expensive and/or more promising companies weighed heavily on the Covid stocks. In 2022, Teleperformance thus recorded its first down year in 11 years. And what a drop: -43%! It was followed by the declines of 2023 (-41%) and 2024 (-37%), for which the explanation must be sought elsewhere.
AI as a problem
Because the last factor is probably the most problematic. It boils down to a single question: is AI going to make Teleperformance disappear? It's possible, the market reckons. Quite the opposite, the group's management keeps insisting. You already know who has been shouting the loudest so far. OpenAI launched its revolutionary conversational app ChatGPT on 30 November 2022. Very quickly, it became apparent that some of the tasks performed by companies like Teleperformance could be replaced by AI. That little tune dragged down the share's performance in 2023. It was reinforced by aggressive statements from certain companies that are natural clients of Teleperformance and its competitors.
The Klarna episode stuck in investors' minds in February 2024 . At the time, the fintech had proudly announced that its AI assistant based on OpenAI had replaced the work of 700 human agents while being more efficient, faster and significantly cheaper. Klarna had even hinted it expected to generate an extra $40m in profits over the year thanks to its magic assistant. In two weeks, the Teleperformance share price fell from €133 to €86. Ironically, Klarna has since given up on all-AI and rehired humans, without renouncing the benefits of its chatbot.
AI anyone? (typical call-center humour)
This AI distrust is a bit like Captain Haddock's sticking plaster: impossible to get rid of. In fact, it's almost pointless to wade into the quarrel between management and the market: the reality is that AI is a powerful downgrading factor for Teleperformance. In valuation terms, there is a before and an after.
The Great Satan
To top it all off - and because I've chopped up my paragraphs badly and no longer know quite where to put this - Teleperformance has also had to deal with a few additional mishaps. There have been plenty of controversies over working conditions in call centers, notably big scandals in South America. I remember that at the time, a rumor suggested that unscrupulous rivals
