Measuring ExlService Holdings, Inc.’s (NASDAQ:EXLS) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess EXLS’s recent performance announced on 31 December 2018 and compare these figures to its historical trend and industry movements.
Were EXLS’s earnings stronger than its past performances and the industry?
EXLS’s trailing twelve-month earnings (from 31 December 2018) of US$57m has jumped 16% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 6.8%, indicating the rate at which EXLS is growing has accelerated. How has it been able to do this? Let’s take a look at if it is merely owing to an industry uplift, or if ExlService Holdings has experienced some company-specific growth.
In terms of returns from investment, ExlService Holdings has fallen short of achieving a 20% return on equity (ROE), recording 9.2% instead. However, its return on assets (ROA) of 5.8% exceeds the US IT industry of 5.8%, indicating ExlService Holdings has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for ExlService Holdings’s debt level, has declined over the past 3 years from 12% to 7.8%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 0.7% to 46% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as ExlService Holdings gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research ExlService Holdings to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for EXLS’s future growth? Take a look at our free research report of analyst consensus for EXLS’s outlook.
- Financial Health: Are EXLS’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2018. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.