EXLS - Embedded Expectations Analysis - 2020 08 31
ExlService Holdings, Inc. (EXLS:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with an 18.3x Uniform P/E, implying bearish expectations for the firm. Although management's concerns about client engagement, the potential of their EXL partnership, and their Analytics business suggest the potential for near-term headwinds, market expectations remain far too bearish, and longer-term equity outperformance is likely warrantedSpecifically, management may lack confidence in their ability to pursue new operating models with EXL, elevate customer experience, and hire new talent, particularly in their Analytics business. Furthermore, they may be exaggerating their market position in data management and analytics, as well as the customer usage of their platform. Management may also lack confidence in their ability to swiftly develop and launch new solutions relevant to their clients and improve logistics volume. In addition, they may have concerns about the potential of their breakthrough recovery indicators and continued declines in revenue and captive performance. Moreover, they may also lack confidence in their ability to secure new clients and capitalize on business opportunities. Finally, they may have concerns about FX headwinds, the current environment's impact on client relationships, and the challenges of changing their operational processes
Although management's concerns about client engagement, the potential of their EXL partnership, and their Analytics business suggest the potential for near-term headwinds, given its scalable solutions and robust economic moat, market expectations remain far too bearish, and longer-term equity outperformance is likely warranted for EXLS
ExlService Holdings is a holding company. Through its subsidiaries, the company is an operations management and analytics company. The company's operations management services involve the transfer to the company's business operations of a client such as claims processing, clinical operations, or financial transaction processing, after which the company administers and manages those operations for its client on an ongoing basis, or in case of consulting, consulting services related to transformation services, including digital transformation services. The company's Analytics services focus on driving business outcomes for its customers by generating data-driven insights across various parts of its customers' business.
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