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Exela Technologies Inc (XELA)
OTHER OTC:XELA
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Exela Technologies
(OTC:XELA)
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Rating:40Underperform
Price Target:
$0.04
▼(-2.50% Downside)
The score is primarily held down by poor financial performance—sharp revenue contraction, ongoing losses, weakening free cash flow, and a highly leveraged balance sheet with negative equity. Technicals add downside risk as the stock trades below major moving averages with negative MACD, while valuation provides limited support because losses make the P/E uninformative and there is no dividend yield.
Positive Factors
Recurring, contract-based services
Exela’s model relies on multi‑year contracts and recurring managed‑services fees, creating predictable, contractually backed revenue. This structural predictability supports revenue visibility, client retention and upsell potential, bolstering cash flow stability over the medium term.
Diversified end-market exposure
Serving multiple document‑intensive industries reduces client concentration and demand cyclicality. Durable exposure to regulated sectors like banking and healthcare supports steady baseline demand for automation and workflow services and enables cross‑selling of platform and transactional offerings.
Positive cash generation vs. accounting losses
A FCF/net income ratio above 1 indicates the business is generating cash despite accounting losses, providing management with liquidity to operate, invest selectively or restructure. That cash conversion is a durable operational strength relative to loss figures alone.
Negative Factors
Sharp revenue contraction
A ~35% TTM revenue decline materially reduces scale and undermines operating leverage. Continued top‑line shrinkage pressures margins, weakens bargaining power with customers, and makes sustaining multi‑year contracts and funding reinvestment harder absent consistent revenue stabilization.
Negative equity and high leverage
Negative shareholders' equity and a leveraged balance sheet constrain financial flexibility and increase refinancing and covenant risk. Over time this limits the company’s ability to invest in product development or absorb demand shocks, elevating structural solvency concerns.
Contracting free cash flow
A ~56% decline in FCF growth and negative operating‑cashflow-to‑net‑income indicate deteriorating liquidity dynamics. Sustained FCF contraction reduces capacity to service debt, invest in automation platforms or weather client volume downturns, raising medium‑term operational risk.
Exela Technologies (XELA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.98M
Dividend YieldN/A
Average Volume (3M)3.69K
Price to Earnings (P/E)―
Beta (1Y)3.32
Revenue Growth-62.61%
EPS Growth73.20%
CountryUS
Employees12,600
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)-0.19
Shares Outstanding27,751,057
10 Day Avg. Volume2,104
30 Day Avg. Volume3,694
Financial Highlights & Ratios
PEG Ratio0.00
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap16.74
Enterprise Value/Revenue-0.12
Enterprise Value/Gross Profit-0.75
Enterprise Value/Ebitda-1.62
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Exela Technologies Business Overview & Revenue Model
Company DescriptionExela Technologies, Inc. is a global provider of integrated technology-driven solutions for businesses, focusing on automating and optimizing business processes. The company operates in various sectors, including healthcare, financial services, and legal services, offering a range of products and services such as digital mailroom solutions, workflow automation, and enterprise information management. Exela combines advanced technology with data analytics to help its clients enhance efficiency, reduce costs, and improve customer experiences.
How the Company Makes MoneyExela Technologies generates revenue through multiple streams, primarily by providing technology-enabled services and solutions to its clients. Key revenue sources include transaction processing fees from its digital mailroom and document management services, subscription fees for software solutions, and consulting services aimed at improving operational efficiency. The company also benefits from long-term contracts with various clients across its target sectors, which provide a steady stream of recurring revenue. Additionally, strategic partnerships with technology providers and industry leaders enhance Exela's service offerings and expand its market reach, contributing to its overall earnings.
Exela Technologies Earnings Call Summary
Earnings Call Date:Nov 29, 2024
(Q3-2024)
| % Change Since: |
Next Earnings Date:May 07, 2026
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.Q3-2024 Updates
Positive Updates
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.
Negative Updates
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.Exela Technologies Financial Statement Overview
Summary
Financial health is weak: steep TTM revenue decline (-35.03%), continued losses (negative net margin), shrinking gross margin (20.07%), declining free cash flow growth (-55.99%), and a highly stressed balance sheet with negative equity and heavy leverage.Income Statement
Exela Technologies has experienced a significant decline in revenue, with a TTM revenue growth rate of -35.03%. The gross profit margin has decreased to 20.07% from previous years, indicating reduced efficiency in generating profit from sales. The net profit margin remains negative, reflecting ongoing losses. Despite a slight improvement in EBIT and EBITDA margins, the company continues to face profitability challenges.45
Neutral
Balance Sheet
The balance sheet shows a concerning financial structure with negative stockholders' equity and a high debt-to-equity ratio of -1.21. This indicates that the company is heavily leveraged, which poses a risk to financial stability. Return on equity is positive but low, suggesting limited returns for shareholders given the negative equity.30
Negative
Cash Flow
Cash flow analysis reveals a decline in free cash flow growth by -55.99% TTM, indicating potential liquidity issues. However, the free cash flow to net income ratio is positive at 1.52, suggesting that the company is generating cash relative to its net losses. The operating cash flow to net income ratio is negative, highlighting challenges in converting earnings into cash.40
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | -284.40M | 142.77M | 1.06B | 1.08B | 1.17B | 1.29B |
| Gross Profit | -43.97M | 35.10M | 230.70M | 199.68M | 277.51M | 269.02M |
| EBITDA | -20.50M | 5.86M | 84.63M | -174.68M | 114.46M | 102.89M |
| Net Income | -37.96M | -12.37M | -125.16M | -415.58M | -142.39M | -178.53M |
Balance Sheet | ||||||
| Total Assets | 105.18M | 88.05M | 636.34M | 721.91M | 1.04B | 1.16B |
| Cash, Cash Equivalents and Short-Term Investments | 6.12M | 12.10M | 67.15M | 17.93M | 29.69M | 68.22M |
| Total Debt | 39.24M | 35.39M | 1.11B | 1.15B | 1.32B | 1.64B |
| Total Liabilities | 133.46M | 109.39M | 1.50B | 1.53B | 1.70B | 2.08B |
| Stockholders Equity | -28.28M | -21.35M | -855.50M | -807.59M | -666.77M | -926.53M |
Cash Flow | ||||||
| Free Cash Flow | 10.53M | -6.49M | -8.34M | -109.13M | -128.06M | -45.27M |
| Operating Cash Flow | 7.69M | -5.23M | 3.56M | -87.16M | -111.53M | -29.78M |
| Investing Cash Flow | -759.00K | -1.71M | 17.92M | -21.77M | -9.26M | 21.44M |
| Financing Cash Flow | 8.30M | 12.45M | 624.00K | 106.64M | 98.65M | 63.36M |
Exela Technologies Technical Analysis
Positive
0.04
Price Trends
0.05
Positive
0.05
Positive
0.17
Negative
Market Momentum
>-0.01
Negative
53.50
Neutral
55.71
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For XELA, the sentiment is Positive. The current price of 0.04 is below the 20-day moving average (MA) of 0.04, below the 50-day MA of 0.05, and below the 200-day MA of 0.17, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 53.50 is Neutral, neither overbought nor oversold. The STOCH value of 55.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
44 Neutral | $14.62M | -0.38 | -101.21% | ― | -24.08% | 70.11% | |
44 Neutral | $21.71M | -0.09 | -205.65% | ― | 72.57% | -261.66% | |
43 Neutral | $9.25M | -0.48 | -80.59% | ― | -27.47% | 83.06% | |
40 Underperform | $1.98M | >-0.01 | ― | ― | -62.61% | 73.20% |
* Technology Sector Average
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.