One-glance verdict
Undervalued
$89.96 our estimate vs market $35.26
Wall Street consensus: $44.62 (-50.4% lower than our fair-value estimate)
61% below our estimate, below the bear case
Fundamentals snapshot
ExlService Holdings, Inc.
EXLS · NMS · Technology · Information Technology Services
Current price
$35.26
52-week range
$24.85 - $44.32
Market cap
$5.35B
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 80% 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 (EXLS) helps other businesses, particularly in insurance and healthcare, run more efficiently by using data analysis and artificial intelligence (AI). The company makes its money by managing essential but complex tasks for its clients, like processing insurance claims or analyzing financial data. This matters because by embedding its services deep into a client's daily operations, EXLS can build long-term relationships that provide a steady stream of revenue (the money a company earns from its business activities).
How the company got here
ExlService Holdings, often called EXL, was started in 1999 by two co-founders, Vikram Talwar and Rohit Kapoor. Initially, it focused on handling business tasks for other companies, a practice known as business process outsourcing (BPO), especially for the insurance industry. A key moment came in 2006 when the company began trading on the NASDAQ stock exchange, which allowed it to raise money and grow by acquiring other companies. Over the years, EXL has bought several firms to add new skills, particularly in data analysis (analytics) and artificial intelligence, shifting its focus from just handling tasks to providing data-driven solutions.
What it actually does
Think of EXL as a helper for large companies in industries like insurance, healthcare, and banking. Instead of those companies handling every single task themselves, they hire EXL to manage complex processes, like processing insurance claims or managing customer data. EXL uses its expertise in data, analytics (the process of finding meaningful patterns in data), and artificial intelligence to make these tasks more efficient and to help its clients make smarter business decisions. Essentially, EXL helps other businesses run more smoothly and effectively by taking on some of their operational burdens and providing data-driven insights.
Insurance
This is the company's largest and original business area, making up the biggest piece of its sales. It provides a wide range of services to insurance companies, such as managing claims, supporting underwriters (the professionals who decide whether to insure something or someone), and handling customer service. For example, if you file a car insurance claim, EXL might be the company working behind the scenes to process the paperwork and data for the insurance provider. Insurance companies pay EXL to handle these essential but time-consuming tasks so they can focus on their main business.
Healthcare and Life Sciences
In this segment, EXL works with healthcare organizations like insurance payers and providers. It offers services that help manage patient care, ensure payments are accurate to prevent fraud, and optimize revenue (the total amount of money a business brings in). For instance, a hospital might use EXL's data analytics to better understand patient needs or to make their billing processes more efficient. This part of the business helps healthcare companies navigate complex regulations and improve how they serve patients.
Banking, Capital Markets, and Diversified Industries
This division serves banks, investment firms, and companies in other industries like retail, media, and travel. EXL provides services such as financial planning and analysis, accounting, and support for regulatory reporting (the required financial information companies must share with the government). A bank might hire EXL to analyze customer data to offer more personalized services, or a retail company could use EXL to make its supply chain (the entire process of making and selling goods) more efficient.
International Growth Markets
This segment focuses on expanding EXL's business in regions outside of its primary markets. It offers the same types of data analytics and digital operations services to clients in different parts of the world. The goal of this division is to find new customers and grow the company's presence globally. This is a smaller but important part of the company's plan to continue growing.
What management is betting on now
The company's leadership is heavily focused on data, artificial intelligence (AI), and cloud computing (using a network of remote servers to store and manage data). They are investing in these areas to provide smarter and more automated solutions to their clients. The strategy is to move beyond simply managing business processes to becoming a partner that helps companies use their own data to make better decisions and operate more efficiently. By deepening its expertise in key industries like insurance and healthcare, EXL aims to solve more complex problems for its clients and grow its business.
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 $89.96 vs current price $35.26
Wall Street consensus is the average analyst price target: $44.62 (-50.4% lower than our fair-value estimate).
Our most-likely fair value is $89.96 a share — about 155.1% above today's price of $35.26, 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 $2.09B Interest coverage 89.92x +405% vs EXLS Carries about 5.0x more debt cushion than EXLS.
Total debt $1.73B Interest coverage 6.28x -65% vs EXLS Carries about 2.8x less debt cushion than EXLS.
Total debt $1.27B Interest coverage 19.37x +9% vs EXLS Has roughly the same debt cushion as 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 80% 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)
22.32x
Forward P/E
13.58x
P/B
6.18x
P/S
2.39x
EV/EBITDA
14.39x
PEG ratio
0.91x
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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