EXL trades at $34.62 per share and has stayed right on track with the overall market, gaining 12% over the last six months. At the same time, the S&P 500 has returned 13.1%.
Is EXLS a buy right now? Find out in our full research report, it’s free.
Why Are We Positive on EXL?
Originally founded as an outsourcing company in 1999 before evolving into a technology-focused enterprise, EXL (NASDAQ: EXLS) provides data analytics and AI-powered digital operations solutions that help businesses transform their operations and make better decisions.
1. Skyrocketing Revenue Shows Strong Momentum
A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, EXL grew its sales at an incredible 16.9% compounded annual growth rate. Its growth surpassed the average business services company and shows its offerings resonate with customers.
2. Projected Revenue Growth Is Remarkable
Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite, though some deceleration is natural as businesses become larger.
Over the next 12 months, sell-side analysts expect EXL’s revenue to rise by 14.3%, close to its 16.9% annualized growth for the past five years. This projection is healthy and indicates the market sees success for its products and services.
3. Outstanding Long-Term EPS Growth
Analyzing the long-term change in earnings per share (EPS) shows whether a company’s incremental sales were profitable — for example, revenue could be inflated through excessive spending on advertising and promotions.
EXL’s EPS grew at 19% compounded annual growth rate over the last five years, higher than its 16.9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
Final Judgment
These are just a few reasons why we’re bullish on EXL. At $34.62 per share (or 14.6× forward P/E), is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
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