Is ExlService Holdings, Inc. (NASDAQ:EXLS) Potentially Undervalued?
While ExlService Holdings, Inc. (NASDAQ:EXLS) might not be the most widely known stock at the moment, it led the NASDAQGS gainers with a relatively large price hike in the past couple of weeks. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s take a look at ExlService Holdings’s outlook and value based on the most recent financial data to see if the opportunity still exists.
View our latest analysis for ExlService Holdings
Is ExlService Holdings Still Cheap?
The stock is currently trading at US$178 on the share market, which means it is overvalued by 30% compared to my intrinsic value of $136.41. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Since ExlService Holdings’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What kind of growth will ExlService Holdings generate?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. ExlService Holdings' earnings over the next few years are expected to increase by 33%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? It seems like the market has well and truly priced in EXLS’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe EXLS should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on EXLS for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for EXLS, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
If you want to dive deeper into ExlService Holdings, you'd also look into what risks it is currently facing. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of ExlService Holdings.
If you are no longer interested in ExlService Holdings, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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