One-glance verdict
Undervalued
$84.88 our estimate vs market $35.87
Wall Street consensus: $44.62 (-47.4% lower than our fair-value estimate)
58% below our estimate, below the bear case
Fundamentals snapshot
ExlService Holdings, Inc.
EXLS · NMS · Technology · Information Technology Services
Current price
$35.87
52-week range
$24.85 - $43.88
Market cap
$5.44B
Balance sheet
Healthy
17.82x Strong cushion
Net debt $206.34M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 3.3% last year.
- Reward Returns 25.9% on equity, ahead of 60% of its peers.
- Reward Free cash flow was positive in 10/10 years.
- Risk Net debt grew 387.5% over 3 years.
What this company does
ExlService Holdings, Inc.
ExlService uses data analysis and artificial intelligence (AI) to handle complex operational jobs for other companies, primarily in the insurance, banking, and healthcare industries. It earns money by managing its clients' essential tasks, like processing claims or analyzing financial data. This helps its customers operate more efficiently and make better-informed decisions.
How the company got here
ExlService started in 1999 primarily as a business process outsourcing (BPO) company, which means it handled operational tasks for other businesses, focusing heavily on the insurance industry. [18] A key turning point was its 2006 acquisition of a company called Inductis, which shifted its focus toward data analytics (the science of analyzing raw data to make conclusions about that information). [9, 18] Over the years, through various acquisitions, the company has deliberately evolved from a service provider that relied on a large workforce to a technology-focused company. [1, 9] Today, it positions itself as a data and artificial intelligence (AI) company, helping clients use technology to improve their operations. [17]
What it actually does
Think of EXLS as a team of specialists that other large companies hire to improve their behind-the-scenes work, especially in complex industries like insurance and healthcare. [1, 4] Instead of selling a single software product, EXLS provides a combination of services, using its industry experts, data analysis, and artificial intelligence to make a company's processes more efficient and effective. [4] For example, an insurance company might hire EXLS to handle its claims process, and EXLS would use its tools and experts to manage those claims quickly and accurately. [3] The goal is to help clients use their own data more intelligently to save money, manage risks, and improve their customers' experience. [1, 21]
Insurance
This is the company's largest and original line of business, making up over a third of its revenue. [2] It serves all types of insurance companies, including those in property and casualty, life, and retirement services. [3, 5] Clients in this segment pay EXLS to handle core insurance tasks like managing claims, underwriting (the process of deciding whether to provide insurance and on what terms), and providing customer service. [3, 4] EXLS uses data and AI to make these processes, which are often complex and data-heavy, more efficient and accurate. [21, 29]
Healthcare and Life Sciences
This is a fast-growing part of the company, representing about a quarter of its business. [2] The customers are typically healthcare payers (like insurance providers), providers (like hospitals), and life sciences companies. [3, 16] These organizations pay EXLS to help with tasks like payment integrity (ensuring medical claims are paid correctly), managing patient care processes, and analyzing health data to improve outcomes. [4, 5] Given the vast amount of data and regulation in healthcare, this segment is a key area for applying EXLS's data and AI expertise. [4]
Banking, Capital Markets, and Diversified Industries
This segment, which accounts for just under a quarter of revenue, serves banks, investment firms, and companies in a variety of other sectors like retail, travel, and utilities. [2, 3, 5] These clients pay for help with services like financial planning and analysis, ensuring they are following government rules, also known as compliance, and managing customer operations. [1] This business line helps diversify the company so it isn't solely reliant on the insurance and healthcare industries. [4]
International Growth Markets
This segment is focused on expanding all of the company's services to clients outside of North America. [16] It represents a strategic effort to grow the business in geographies like the United Kingdom, Europe, and Asia. [5, 16] Rather than being a distinct product line, this segment is about delivering EXLS's insurance, healthcare, and banking solutions to a global customer base. [16] This is a smaller but important part of the company's plan for future growth. [10]
What management is betting on now
The company's main strategy is to be a leader in data and artificial intelligence (AI). [7, 8] Management is deliberately shifting the business away from traditional operational services toward embedding AI directly into their clients' most important workflows. [1, 12] This is reflected in the fact that data and AI-led services now make up the majority of the company's revenue. [10, 20] To achieve this, the company is acquiring specialized AI firms and forming strategic partnerships with major technology companies like Google Cloud to accelerate its AI development and offerings. [12, 26]
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q2
$62.85M
FY2024 Q3
$97.28M
FY2024 Q4
$95.27M
FY2025 Q1
$-9.70M
FY2025 Q2
$94.95M
FY2025 Q3
$106.36M
FY2025 Q4
$106.51M
FY2026 Q1
$-11.21M
Revenue
$570.35M
Net income
$67.08M
Diluted EPS
0.43
Operating cash flow
$1.72M
Free cash flow
$-11.21M
Fetching…
Sources
Revenue
$542.62M
Net income
$60.25M
Diluted EPS
0.38
Operating cash flow
$117.38M
Free cash flow
$106.51M
Fetching…
Sources
Revenue
$529.59M
Net income
$58.16M
Diluted EPS
0.36
Operating cash flow
$120.72M
Free cash flow
$106.36M
Fetching…
Sources
Revenue
$514.46M
Net income
$66.05M
Diluted EPS
0.40
Operating cash flow
$109.38M
Free cash flow
$94.95M
Fetching…
Sources
Revenue
$501.02M
Net income
$66.56M
Diluted EPS
0.40
Operating cash flow
$3.24M
Free cash flow
$-9.70M
Fetching…
Sources
Revenue
$481.43M
Net income
$50.67M
Diluted EPS
0.31
Operating cash flow
$105.35M
Free cash flow
$95.27M
Fetching…
Sources
Revenue
$472.07M
Net income
$53.04M
Diluted EPS
0.33
Operating cash flow
$110.14M
Free cash flow
$97.28M
Fetching…
Sources
Revenue
$448.37M
Net income
$45.83M
Diluted EPS
0.28
Operating cash flow
$74.91M
Free cash flow
$62.85M
Fetching…
Sources
Is it cheap or expensive?
Fair value $84.88 vs current price $35.87
Wall Street consensus is the average analyst price target: $44.62 (-47.4% lower than our fair-value estimate).
Our most-likely fair value is $84.88 a share — about 136.7% above today's price of $35.87, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net debt $206.3M. Interest coverage 17.8x.
Net debt
$206.34M
Interest coverage
17.82x
ExlService Holdings, Inc.'s profit covers its interest bill about 17.8 times over. which is stronger than most peers shown here.
Healthy
Worse cushion
Baseline
Better cushion
EXLS
BASELINE
ExlService Holdings, Inc.
Total debt $490.17M Interest coverage 17.82x This is the baseline the peer rows are being compared against.
Total debt $1.41B Interest coverage 10.34x -42% vs EXLS Carries about 1.7x less debt cushion than EXLS.
Total debt $152.24M Interest coverage 301.10x +1,590% vs EXLS Carries about 16.9x more debt cushion than EXLS.
Total debt $1.27B Interest coverage 19.37x +9% vs EXLS Has roughly the same debt cushion as EXLS.
Total debt $865.16M Interest coverage 5.49x -69% vs EXLS Carries about 3.2x less debt cushion than EXLS.
What you should know
The case for and against EXLS
3 Rewards
1 Risk
Rewards
-
Revenue grew 3.3% last year.
-
Returns 25.9% on equity, ahead of 60% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Net debt grew 387.5% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
22.70x
Forward P/E
13.81x
P/B
6.28x
P/S
2.43x
EV/EBITDA
15.13x
PEG ratio
0.95x
Profitability
How much profit each dollar creates
Gross margin
38.5%
Operating margin
14.6%
Net margin
11.2%
ROE
25.9%
ROA
12.0%
Health
Liquidity and balance-sheet strength
Debt / equity
0.57x
Current ratio
1.24x
Quick ratio
1.11x
Total debt
$490.17M
Total cash
$283.82M
Growth
How the business has been compounding
Revenue TTM
$2.16B
Revenue 5Y CAGR
16.8%
EPS TTM
1.58
EPS 5Y CAGR
22.1%
Cash flow
How much cash the business throws off
Operating CF TTM
$349.19M
Free CF TTM
$298.12M
FCF margin
13.8%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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