Research

EXLS – Markets have expectations for Uniform ROA to fall significantly, but management is confident about their acquisitions, EBTIDA, and Analytics business

  • ExlService Holdings, Inc. (EXLS:USA) currently trades near corporate averages relative to UAFRS-based (Uniform) Earnings, with a 21.2x Uniform P/E. At these levels, the market has bearish expectations for the firm, but management is confident about the value of their acquisitions, EBITDA growth, and their Analytics business
  • Specifically, management is confident that their SCIO acquisition has allowed them to integrate their capabilities to develop technology-based healthcare solutions, and they are confident that their Analytics segment grew 6.4% year-over-year. Furthermore, they are confident that their EBITDA improved 9% year-over-year and that they are raising their full year revenue guidance based on their first half performance and increased visibility in the remainder of the year. Finally, they are confident that their Analytics group gross margin improved in Q2 and that their recently expanded relationship with a Fortune 50 insurer significantly grows their engagements and long-term value generation potential.