EXLS – Given management’s confidence about Analytics growth and their partnerships, market expectations are too bearish, and equity outperformance is warranted

• ExlService Holdings, Inc. (EXLS:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 24.0x Uniform P/E. Even at these levels, the market is pricing in bearish expectations for the firm. However, given management’s confidence about Analytics growth and their partnerships with clients, market expectations are still too bearish, and equity outperformance is warranted.
  
• Specifically, management is confident analytics demand was driven by their enterprise-wide adoption of data-driven decision-making, their efforts to hyper-personalize customer interactions, and the accelerated shift to the cloud. Similarly, they are confident the Analytics business will exceed their own expected growth rate. Management is also confident they have formed closer partnerships with their clients, which has helped them get through the uncertainty of the past several quarters.