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Exela Technologies Inc (XELA)
OTHER OTC:XELA
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Exela Technologies
(OTC:XELA)
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Rating:39Underperform
Price Target:
$0.07
▲(550.00% Upside)
Exela Technologies' overall stock score is primarily driven by its poor financial performance and unattractive valuation. The company's significant financial challenges, including declining revenues and high leverage, pose substantial risks. Technical analysis provides some neutral signals, but the lack of positive valuation metrics further weighs down the score.
Positive Factors
Recurring Revenue Streams
Exela's long-term contracts across various sectors ensure a stable revenue base, enhancing predictability and financial stability over time.
Strategic Partnerships
Strategic alliances with industry leaders bolster Exela's service offerings, potentially driving growth and competitive positioning in the market.
Cash Generation Ability
Despite losses, Exela's ability to generate cash relative to net income indicates underlying operational strength and potential for liquidity management.
Negative Factors
High Leverage
Exela's significant leverage poses financial risk, limiting flexibility and increasing vulnerability to economic downturns or interest rate hikes.
Declining Revenue
A substantial decline in revenue indicates challenges in maintaining market share and competitiveness, impacting long-term growth prospects.
Profitability Challenges
Ongoing losses and reduced profit margins reflect operational inefficiencies, posing a threat to sustainable profitability and shareholder value.
Exela Technologies (XELA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.96M
Dividend YieldN/A
Average Volume (3M)3.69K
Price to Earnings (P/E)―
Beta (1Y)10.21
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 Cap17.12
Enterprise Value/Revenue-0.12
Enterprise Value/Gross Profit-0.76
Enterprise Value/Ebitda-1.64
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
Exela Technologies is facing significant financial challenges, including declining revenues, persistent losses, and a highly leveraged balance sheet. While there are some positive cash flow metrics, the overall financial health is concerning, with risks related to liquidity and profitability.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
Negative
0.01
Price Trends
0.07
Negative
0.05
Negative
0.20
Negative
Market Momentum
>-0.01
Positive
40.77
Neutral
66.54
Neutral
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 0.01 is below the 20-day moving average (MA) of 0.06, below the 50-day MA of 0.07, and below the 200-day MA of 0.20, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 40.77 is Neutral, neither overbought nor oversold. The STOCH value of 66.54 is Neutral, 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
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% | |
50 Neutral | $19.40M | -0.07 | -205.65% | ― | 72.57% | -261.66% | |
45 Neutral | $14.87M | -0.37 | -101.21% | ― | -24.08% | 70.11% | |
45 Neutral | $11.47M | -0.63 | -80.59% | ― | -27.47% | 83.06% | |
42 Neutral | $8.27M | -0.20 | -61.41% | ― | -13.81% | 86.73% | |
39 Underperform | $1.96M | >-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.