Exlservice Stock (EXLS): A Great Value That’s Ready To Breakout

Exlservice Holding (NASDAQ:EXLS) shares have traded flat for the past three months but are now setting up as a weekly bull flag under the $53 breakout level. If triggered, this pattern targets a move to $62.50.

Exlservice stock price historically shows seasonal strength Q4 to Q1 with an average 3 year return of 35%. It is particularly strong in October and February with 12% and 10.7% average returns respectively.

Below is a chart of EXLS stock price performance.

exls stock chart bullish exlservice_july 5

Exlservice is a leading business process solutions company that integrates management services, decision analytics and technology platforms to deliver immediate results. Its services are used to help businesses enhance growth and profitability, and services insurance, healthcare, financial services, utility, transport and logistics industries. Analytics currently represents 19.4% of revenues. The company has over 700 clients and its top 10 clients account for 40.5% of revenues, so fairly concentrated. It lists its main competition in the BPM service industry as Genpact (NYSE:G), Accenture (NYSE:ACN), Infosys (NYSE:INFY) and Cognizant Tech (NASDAQ:CTSH).

The $1.75B company trades 19.65X Earnings, 2.69X Sales, 3.57X Book and 28.8X FCF with a bulletproof balance sheet. EXLS is generating double digit revenue growth and 12-15% EPS growth annually. As well, Exlservice stock trades relatively in-line with peers on valuation (as seen below). And it also has potential for margin expansion.

bpm service industry competitors valuations fundamentals 2016

In a time when companies are looking for tech solutions to enhance operational performance, Exlservice stock (EXLS) offers a long term steady earnings growth outlook with a reasonable valuation.

Thanks for reading.


Twitter: @OptionsHawk

Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.


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