Will ExlService Holdings Stock Go Up? [Hint: Big Data] - Financhill

Will ExlService Holdings Stock Go Up? [Hint: Big Data]

ExlService Stock Forecast: Every day, there are astonishing advances in technology. From artificial intelligence to data collection and analysis, machine capabilities are transforming how business is done.

However, simply knowing there are sophisticated technologies available isn’t enough. Integrating them into operations requires deep understanding of the technology’s capabilities, as well as a firm grasp of whether and how these capabilities can enhance current processes.

The biggest transition major organizations have to make is moving into the digital world. Consumers are no longer willing to limit their interactions with businesses to brick-and-mortar stores or customer service call centers. They want access to the most up-to-date technology so they can perform transactions online, and they expect to have the ability to get questions answered and problems resolved through virtual chats and social media.

Making the transition is a massive undertaking that must be carefully coordinated. A poor rollout can cause long-term damage to brand. The best way to ensure a seamless move to the digital world is to bring experienced consultants on-board to coordinate efforts.

So what companies are the best investments to capitalize on these seismic shifts?

The Market Opportunity for Big Data Consulting

The short answer is big data companies.

Big Data is another game-changer for today’s businesses – particularly those that have embraced digital life. Every transaction and interaction generates huge amounts of information that, when sorted, can show mission-critical patterns. Smart business leaders are using this data to identify risk, improve operational efficiency, update product offerings, and deepen consumer relationships.

Incorporating data collection into the business can be complicated – and analysis presents its own set of challenges. While much of the analysis can be automated – and must be automated due to volume – choosing how and what to measure makes a difference in the quality of results.

Most companies don’t have the kind of knowledge and expertise on staff to ensure effective implementation of Big Data processes. Most business leaders choose to bring experienced professionals in to set up data collection and analysis tools.

Identifying artificial intelligence and other emerging technologies that can enhance business operations offers additional opportunities for improving the speed and adaptability of an organization. However, many businesses aren’t prepared to identify and implement such tools.

As with the move to digital technology and the incorporation of Big Data, bringing expert consultants in to manage these projects is the most common method of ensuring the success of such projects.

One of the top names in digital consulting is ExlService Holdings – a company that has been around since computers went mainstream. For investors, the question is whether ExlService Holdings’ history of success has set a foundation for future growth and profitability.

What Does ExlService Holdings Do?

ExlService Holdings is headquartered in New York, but it is a global organization. It employs more than 30,000 professionals throughout the United States, Australia, South Africa, Europe, Asia, and Latin America, ensuring it has the ability to reach clients around the world.

ExlService Holdings calls its services Digital Intelligence – a combination of state-of-the-art digital technology, industry expertise, artificial intelligence, and human expertise.

By blending these four elements, the company promises that client businesses will grow more quickly, realize greater profits, and establish market leadership, regardless of the competitive landscape.

For example, ExlService Holdings leverages Big Data analytics to provide real-time customer engagement details, creating deeper customer relationships that result in repeat sales.

While ExlService Holdings offers process improvement strategies that could benefit companies in any industry, it is primarily focused on six:

  • Banking and Financial Services
  • Healthcare
  • Insurance
  • Transportation and Logistics
  • Travel and Leisure
  • Utilities

Essentially, it develops roadmaps for clients in these industries that offer step-by-step plans to embrace digital tools, collect, analyze, and take action on data, and streamline operations. In addition to enabling growth and improving efficiency, these steps are intended to reduce risk and increase regulatory compliance.

Of course, this all sounds good in theory, but is ExlService Holdings a success from the perspective of shareholders? Has it been able to increase revenues and decrease operating expenses to generate value for investors?

ExlService Holdings by the Numbers 

ExlService Holdings has had a strong 2019, as illustrated by third quarter earnings that beat analyst projections. In the October 29th earnings announcement, the company reported $19 million in net income for the quarter and profits of $0.55 per share.

Adjusted earnings per share came in at $0.84. Considering industry experts predicted just $0.75 per share for the third quarter, this is a solid win.

Total revenues also exceeded expectations for the third quarter, totalling $251.4 million. Analysts had estimated $249.1 million for the period.

Management is forecasting full-year earnings between $2.95 and $3.05 per share, and they expect 2019 revenues to come in between $980 million and $990 million.

ExlService Holdings Stock Forecast Summary

Since the beginning of the year, share prices have increased 26 percent, and a bump is expected in response to the third quarter earnings report.

Both investors and analysts expect more good news from ExlService Holdings in coming months, making this stock a buy.

However, that is not to say the investment is without risk – and the biggest risk facing ExlService Holdings is competition. Digital consulting is already crowded with start-ups.

On top of that, many of the world’s leading tech companies want to capture market share in this space. While ExlService Holdings is holding its own for now, it could eventually lose to businesses with more resources.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.