Exela Technologies (XELA) AI Stock Analysis

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Exela Technologies

(OTC:XELA)

29Underperform

Exela Technologies faces substantial financial and operational challenges. While there is some revenue growth and operational improvements, the significant financial instability, declining margins, and NASDAQ delisting present considerable risks. The technical analysis and valuation metrics further reflect the company's precarious position, resulting in a low overall stock score.

Exela Technologies (XELA) vs. S&P 500 (SPY)

Market Cap

$11.38M

Dividend YieldN/A

Average Volume (3M)29.47K

Price to Earnings (P/E)―

Beta (1Y)0.38

Revenue Growth-2.68%

EPS Growth94.28%

CountryUS

Employees12,600

SectorTechnology

Sector Strength40

IndustrySoftware - Application

Share Statistics

EPS (TTM)-12.90

Shares Outstanding27,751,057

10 Day Avg. Volume36,336

30 Day Avg. Volume29,467

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.01

Price to Cash Flow (P/CF)0.70

P/FCF Ratio2.30

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Exela Technologies Business Overview & Revenue Model

Company DescriptionExela Technologies (XELA) is a global business process automation (BPA) company operating primarily across the United States and Europe. It provides digital transformation solutions for a wide array of industries, including banking, healthcare, insurance, and legal. The company's core services include information management, workflow automation, and integrated communication services, which help organizations improve efficiency and reduce operational costs.

How the Company Makes MoneyExela Technologies generates revenue through a combination of software-as-a-service (SaaS) offerings, business process outsourcing (BPO), and transaction-based services. Its key revenue streams include subscription fees for its software platforms, fees for managed services, and charges for transaction processing and document management services. Exela often forms strategic partnerships with large enterprises to provide customized automation solutions, contributing significantly to its earnings. These partnerships allow for long-term contracts that ensure a steady flow of income. Additionally, the company benefits from cross-selling opportunities across its product portfolio, leveraging its extensive client base to promote complementary services.

Exela Technologies Financial Statement Overview

Summary

Exela Technologies exhibits severe financial challenges, with declining revenues, high leverage, and negative equity. The company struggles with profitability and operational efficiency. Although there are minor improvements in cash flow, the overall financial health remains precarious.

Income Statement

Negative

Exela Technologies shows a severe decline in revenue over recent years, with a negative revenue growth rate from the previous annual period to the TTM. Gross profit margin and net profit margin are significantly low, reflecting operational inefficiencies and persistent net losses. Despite some improvement in EBITDA, the company remains unprofitable, with negative EBIT and net income margins.

Balance Sheet

Very Negative

The balance sheet reveals a highly leveraged position with a negative equity, indicating financial instability and potential insolvency risks. The debt-to-equity ratio is not calculable due to negative equity, but the significant liabilities overshadow the assets. Return on equity is negative, further highlighting the company's financial struggles.

Cash Flow

Negative

The cash flow statement indicates a modest improvement in operating cash flow in the TTM, but free cash flow remains low. There is a slight positive free cash flow growth rate compared to the previous year, yet the overall cash flow health remains weak due to consistent negative net income impacting the operating cash flow to net income ratio.

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
1.04B	1.06B	1.08B	1.17B	1.29B	1.56B
	Gross Profit
198.57M	230.70M	199.68M	277.51M	269.02M	337.60M
	EBIT
-14.41M	8.05M	-70.81M	21.39M	18.52M	12.94M
	EBITDA
47.96M	84.63M	-174.68M	114.46M	102.89M	-237.12M
	Net Income Common Stockholders
-104.98M	-125.16M	-415.58M	-142.39M	-178.53M	-509.12M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
25.61M	25.28M	15.07M	20.77M	68.22M	6.20M
	Total Assets
1.64B	636.34M	721.91M	1.04B	1.16B	1.26B
	Total Debt
1.38B	1.11B	1.15B	1.32B	1.64B	1.57B
	Net Debt
1.35B	1.09B	1.14B	1.30B	1.57B	1.56B
	Total Liabilities
1.82B	1.50B	1.53B	1.70B	2.08B	2.00B
	Stockholders Equity
-181.01M	-855.50M	-807.59M	-666.77M	-926.53M	-743.04M
Cash Flow		Free Cash Flow
10.89M	-8.34M	-109.13M	-128.06M	-45.27M	-84.39M
	Operating Cash Flow
20.56M	3.56M	-87.16M	-111.53M	-29.78M	-63.85M
	Investing Cash Flow
-9.11M	17.92M	-21.77M	-9.26M	21.44M	-25.18M
	Financing Cash Flow
-11.52M	624.00K	106.64M	98.65M	63.36M	59.14M

Exela Technologies Technical Analysis

Technical Analysis Sentiment

Negative

Last Price0.48

Price Trends

50DMA

0.52

Negative

100DMA

0.78

Negative

200DMA

1.44

Negative

Market Momentum

MACD

-0.03

Negative

RSI

45.29

Neutral

STOCH

13.87

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For XELA, the sentiment is Negative. The current price of 0.48 is above the 20-day moving average (MA) of 0.48, below the 50-day MA of 0.52, and below the 200-day MA of 1.44, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 45.29 is Neutral, neither overbought nor oversold. The STOCH value of 13.87 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for XELA.

Exela Technologies Risk Analysis

Exela Technologies disclosed 42 risk factors in its most recent earnings report. Exela Technologies reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Exela Technologies Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
G	80 Outperform	$8.45B	16.90	22.15%	1.30%	6.46%	-16.94%
DOX	73 Outperform	$9.57B	19.66	14.13%	2.30%	-1.55%	-7.26%
Sector *	57 Neutral	$20.24B	9.51	-13.28%	2.72%	5.43%	-24.54%
FIS	51 Neutral	$38.35B	51.06	4.65%	2.04%	-17.38%	―
DXC	47 Neutral	$2.82B	267.98	-2.46%	―	-5.65%	78.20%
CNDT	42 Neutral	$365.74M	0.99	48.63%	―	-9.83%	―
XELA	29 Underperform	$11.38M	―	11.21%	―	-2.68%	94.28%

* Technology Sector Average

Performance Comparison

XELA

Exela Technologies

0.48

-1.88

-79.66%

DOX

Amdocs

82.21

-1.55

-1.85%

FIS

Fidelity National Info

69.51

-0.11

-0.16%

Genpact

46.71

15.97

51.95%

CNDT

Conduent

2.13

-1.07

-33.44%

DXC

DXC Technology

14.25

-6.05

-29.80%

Exela Technologies Earnings Call Summary

Earnings Call Date: Apr 2, 2025 | % Change Since: 4.35% | Next Earnings Date: May 8, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mix of positive revenue growth and operational efficiencies with significant challenges in margin decline, net loss, and NASDAQ delisting. While there are promising growth opportunities and improvements, the financial struggles and delisting weigh heavily.

Highlights

Revenue Growth

Third quarter revenues were $269.2 million, up 6.3% year-over-year. Information and Transaction Processing Solutions increased by 11.5% year-over-year.

Sequential Improvements

Sequentially, Q3 was up 22.4% in ITPS, primarily driven by a large project from an existing customer. Adjusted EBITDA improved by 6.7% sequentially.

Operational Efficiency

SG&A was down about 1% year-over-year and 16% sequentially due to reductions in legal and professional fees and employee-related costs. The company is shifting from CapEx to OpEx by moving data center infrastructure to the cloud.

New Business Achievements

The company renewed over $113 million of TCV in the quarter, won approximately $40 million of new ACV, and added 81 new logos.

Improved Cash Flow

Cash flow from operations improved with $5 million of positive cash flow in Q3.

Lowlights

Gross Margin Decline

Q3 gross margins were 20.2%, down 330 basis points sequentially and 140 basis points year-over-year due to higher postage costs.

Segment Performance Decline

Healthcare Solutions and Legal and Loss Prevention Services declined by 5.3% and 2.4% year-over-year, respectively. LLPS was down 28.8% sequentially due to project fluctuations.

Net Loss

The company reported a net loss of $24.9 million, although it was an improvement of $2 million sequentially.

NASDAQ Delisting

Exela was delisted from NASDAQ due to failure to meet the Exchange's $35 million market cap minimum requirement for 30 consecutive business days.

Company Guidance

During the Exela Third Quarter 2024 Earnings Call, interim CFO Matt Brown provided detailed financial guidance, highlighting a 6.3% year-over-year increase in revenues, reaching $269.2 million. Information and Transaction Processing Solutions (ITPS) grew by 11.5% year-over-year and 22.4% sequentially, driven by a large project from an existing customer, while Healthcare Solutions and Legal and Loss Prevention Services (LLPS) saw declines of 5.3% and 2.4% year-over-year, respectively. Gross margins dropped by 330 basis points sequentially and 140 basis points year-over-year, primarily due to increased postage costs. Exela achieved a net loss of $24.9 million, a $2 million improvement sequentially, with adjusted EBITDA at $14.6 million and a 6.7% sequential improvement. The company renewed over $113 million in Total Contract Value (TCV) and added approximately $40 million in Annual Contract Value (ACV) with 81 new logos. Despite being delisted from NASDAQ, Exela remains focused on growing revenue, improving gross margins, and enhancing profitability and liquidity.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.