TaskUs Core Business Remains Resilient Despite Client Automation, Morgan Stanley Says

MT Newswires Live08-11 23:32

TaskUs (TASK) reported resilient Q2 performance outside its largest client, with accelerating growth across other customers and stronger-than-expected BPO trends helping keep the core thesis intact, Morgan Stanley said in a Tuesday note.

The analyst said Q2 revenue rose 5% year over year and beat its and consensus estimates by about 4%, despite a 22% decline in revenue from the largest client, whose share of total revenue fell to 20% from 24% in Q1. Management expects automation and cost-optimization pressures to continue through H2 2026 and potentially into 2027.

Revenue growth across the broader client base accelerated, with growth excluding the largest client reaching about 15% and growth among No. 2-to-No. 20 clients reaching about 30%. Morgan Stanley said resilient BPO demand suggests AI spending is displacing discretionary and consulting work rather than BPO services.

The brokerage forecasts TaskUs' 2026 revenue of about $1.23 billion, adjusted EBITDA of $234 million and adjusted earnings per share of $1.34. For 2027, revenue is expected to grow 5% to $1.30 billion, with EPS at $1.40 as investments in physical AI, TaskVerse, robotics and agentic consulting pressure margins.

Morgan Stanley maintained its equal weight rating on the stock and raised its price target to $7 from $6.

Price: 7.08, Change: -0.02, Percent Change: -0.28

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