Exlservice Holdings (EXLS) AI Stock Analysis

• Market Cap: $4.56B
• Dividend Yield: N/A
• Average Volume (3M): 2.02M
• Price to Earnings (P/E): 19.5
• Beta (1Y): 0.76
• Revenue Growth: 14.43%
• EPS Growth: 29.86%
• Country: US
• Employees: 59,500
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 0.50
• Shares Outstanding: 158,700,880
• 10 Day Avg. Volume: 2,589,871
• 30 Day Avg. Volume: 2,015,954
• PEG Ratio: 0.98
• Price to Book (P/B): 7.49
• Price to Sales (P/S): 3.27
• P/FCF Ratio: 22.92
• Enterprise Value/Market Cap: 1.08
• Enterprise Value/Revenue: 2.42
• Enterprise Value/Gross Profit: 6.33
• Enterprise Value/Ebitda: 11.75
• 1Y Price Target: $47.00
• Price Target Upside: 20.05% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 76 Outperform
• Price Target: $32.00 ▼(-18.26% Downside)
• Action: Reiterated Date: 02/25/26
• Date: Action: Reiterated 02/25/26

The score is driven primarily by strong financial performance (improving profitability, robust free cash flow, and significantly reduced leverage) and a constructive earnings update with raised guidance and accelerating data/AI mix. These are partially offset by weak technicals (below key moving averages with negative MACD) and only moderate valuation support (P/E ~19.5 with no dividend yield data).

Positive Factors

Strong free cash flow generation

Sustained, high free cash flow and strong cash conversion improve financial flexibility and fund investments, buybacks, or debt reduction without relying on external financing. This durable cash generation supports reinvestment in AI capabilities and cushions cyclical revenue swings over 2–6 months.

Materially stronger balance sheet / lower leverage

A sharp reduction in leverage meaningfully lowers refinancing and solvency risk, enabling strategic optionality. With much lower debt levels, EXL can pursue M&A, absorb short-term margin investments, and sustain shareholder returns while maintaining resilience through industry cycles.

AI-led services and high recurring revenue mix

A majority AI-driven, recurring revenue base plus a new EXLdata.ai product creates durable competitive differentiation. Embedded analytics and managed services increase switching costs, produce predictable cash streams, and position EXL to scale outcomes-based engagements over the medium term.

Negative Factors

Margin pressure from SG&A investments

Sustained front-end investments in sales, marketing and new solutions can compress margins and delay margin recovery. If revenue acceleration slows, elevated SG&A could weigh on operating profitability and limit near-term free cash flow upside until productivity from those investments is realized.

Customer concentration in regulated sectors

Heavy exposure to insurance and healthcare means revenue and contract dynamics are sensitive to regulatory changes, reimbursement cycles, and programmatic shifts. Structural regulatory risks and budget cadences in these sectors can produce lumpy demand and constrain faster diversification over the medium term.

Inconsistent operating-profit signals / reporting noise

Reported anomalies and mixed margin metrics reduce clarity on normalized profitability trends. Structural planning and investor confidence can be impaired if core margin drivers are obscured, making it harder to forecast sustainable margins and to separate durable improvement from one-off reporting items.

Exlservice Holdings Business Overview & Revenue Model

Company Description

ExlService Holdings, Inc. operates as a data analytics, and digital operations and solutions company in the United States and internationally. It operates through Insurance, Healthcare, Analytics, and Emerging Business segments. The company provides digital operations and solutions and analytics-driven services across the insurance industry in areas, such as claims processing, premium and benefit administration, agency management, account reconciliation, policy research, underwriting support, new business acquisition, policy servicing, premium audit, surveys, billing and collection, commercial and residential survey, and customer service using digital technology, artificial intelligence, machine learning, and advanced automation; digital customer acquisition services using a software-as-a-service delivery model through LifePRO and LISS platforms; subrogation services; and Subrosource software platform, an end-to-end subrogation platform. It also offers CareRadius, an integrated care management offering; and health care services related to care management, utilization management, disease management, payment integrity, revenue optimization and customer engagement to healthcare payers, providers, pharmacy benefit managers, and life sciences organizations. Further, it offers predictive and prescriptive analytics in the areas of customer acquisition and lifecycle management, risk underwriting and pricing, operational effectiveness, credit and operational risk monitoring and governance, payment integrity and care management, and data management. The company was founded in 1999 and is headquartered in New York, New York.

How the Company Makes Money

Exlservice Holdings generates revenue primarily through its Business Process Management and analytics services. The company's revenue model is based on a combination of fixed-price contracts and time-and-materials arrangements. Key revenue streams include fees for operational and outsourcing services, consulting engagements, and analytics solutions tailored to client needs. Exl has established significant partnerships with various technology companies, which enhance its service offerings and capabilities. Additionally, the company's ability to leverage data and technology to deliver customized solutions contributes to its competitive advantage and revenue growth.

Exlservice Holdings Financial Statement Overview

Summary

Strong fundamentals supported by steady multi-year revenue expansion, improving net margin (~12% in 2025), materially lower leverage (debt-to-equity ~0.12 in 2025), and robust cash generation (FCF $298M in 2025 with solid conversion vs. net income). Key watch-outs are the unusual 2025 revenue growth figure and an inconsistency in the reported 2025 operating margin data point.

Income Statement

EXLS shows a strong and improving earnings profile: revenue rose steadily from $958M (2020) to $2.09B (2025), with growth re-accelerating sharply in 2025 (2024: ~13% vs. 2025: ~302% per provided data). Profitability is healthy for IT services, with gross margin stable in the high-30%s and net margin improving to ~12.0% in 2025 (from ~10.8% in 2024). A key watch-out is mixed operating profitability signals across years, including an EBIT margin value of 0.0 in 2025 despite positive EBIT dollars, suggesting either reporting noise or a margin data issue to monitor.

Balance Sheet

The balance sheet strengthened meaningfully, highlighted by a sharp reduction in debt and consistently expanding asset base. Debt-to-equity improved to ~0.12 in 2025 from ~0.39 in 2024 (and ~0.50 in 2021), indicating significantly lower leverage and better financial flexibility. Returns to shareholders are strong, with return on equity rising to ~27.5% in 2025 (from ~21.3% in 2024), though equity was slightly lower in 2025 vs. 2024, which is worth tracking alongside any capital return activity or balance sheet changes.

Cash Flow

Cash generation is a clear strength. Operating cash flow increased to $351M in 2025 (from $269M in 2024), and free cash flow climbed to $298M (from $222M), supported by strong free cash flow growth in 2025 (~392% per provided data). Cash conversion remains solid: free cash flow was ~85% of net income in 2025 (vs. ~83% in 2024), and operating cash flow modestly exceeded net income in 2025 (~1.08x). Earlier periods showed weaker coverage (notably 2021–2023), indicating the business can be somewhat variable in working-capital timing, even though the recent trend is favorable.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.03B	2.09B	1.84B	1.63B	1.41B	1.12B
Gross Profit	774.84M	801.08M	691.01M	607.77M	515.45M	431.36M
EBITDA	417.71M	391.75M	357.59M	321.59M	276.24M	229.58M
Net Income	241.44M	251.02M	198.30M	184.56M	142.97M	114.76M
Balance Sheet
Total Assets	1.73B	1.70B	1.62B	1.44B	1.35B	1.28B
Cash, Cash Equivalents and Short-Term Investments	401.46M	328.37M	350.55M	294.90M	302.59M	320.05M
Total Debt	434.46M	109.91M	366.61M	271.76M	313.65M	347.38M
Total Liabilities	781.24M	789.53M	688.54M	552.53M	587.94M	589.75M
Stockholders Equity	952.39M	912.71M	929.86M	889.44M	758.18M	693.16M
Cash Flow
Free Cash Flow	286.88M	298.12M	222.26M	158.40M	121.31M	147.14M
Operating Cash Flow	338.68M	350.72M	268.52M	211.20M	166.14M	184.39M
Investing Cash Flow	-107.23M	-49.26M	-119.10M	-12.00M	-96.55M	-114.27M
Financing Cash Flow	-214.86M	-312.76M	-119.10M	-181.45M	-81.72M	-146.88M

Exlservice Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 39.15
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EXLS, the sentiment is Negative. The current price of 39.15 is above the 20-day moving average (MA) of 32.84, above the 50-day MA of 38.62, and below the 200-day MA of 41.90, indicating a bearish trend. The MACD of -2.93 indicates Positive momentum. The RSI at 23.65 is Positive, neither overbought nor oversold. The STOCH value of 23.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EXLS.

Exlservice Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EXLS	76 Outperform	$4.56B	19.47	25.96%	―	14.43%	29.86%
G	73 Outperform	$6.54B	11.99	22.37%	1.41%	7.40%	-14.45%
CACI	72 Outperform	$12.94B	25.09	13.18%	―	12.61%	11.85%
EPAM	68 Neutral	$7.12B	19.13	10.34%	―	14.26%	-15.49%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
CNXC	50 Neutral	$1.87B	―	-37.82%	3.38%	3.40%	53.13%

Exlservice Holdings Corporate Events

Exlservice Holdings Repurchases Shares from Orogen Echo

On December 15, 2025, EXL repurchased 1,551,970 shares of its common stock from Orogen Echo LLC for $63,373,143, reflecting confidence in its performance and future growth. This transaction, separate from EXL’s $500 million share repurchase program, underscores the company’s commitment to returning capital to shareholders while maintaining strategic partnerships, as Orogen’s CEO Vikram Pandit continues as EXL’s Lead Independent Director.

The most recent analyst rating on (EXLS) stock is a Buy with a $45.00 price target. To see the full list of analyst forecasts on Exlservice Holdings stock, see the EXLS Stock Forecast page.