Exlservice Holdings Inc (NASDAQ:EXLS) stock rose 0.36% (As on September 10, 11:30:30 AM UTC-4, Source: Google Finance) after the company received an upgrade in its rating from Jefferies, moving from Hold to Buy. Accompanying the rating change, the price target for Exlservice was raised to $42.00, up from the previous target of $35.00.
The analyst from Jefferies stated that the headwinds affecting Exlservice’s underlying business are believed to have reached their lowest point, suggesting a turnaround in the company’s fortunes. The new price target is based on a valuation of 19 times the firm’s projected adjusted earnings per share (EPS) for 2025. This valuation is considered appealing given Exlservice’s industry-leading organic growth rate, which is in the double digits.
Exlservice has also demonstrated a resilient business model amid the current economic climate, according to the analyst’s observations. This resilience is underscored by the fact that Exlservice is the only IT Services firm within its peer group that has not experienced negative earnings revisions for 2024 when compared to initial pre-guidance expectations.
The positive outlook on Exlservice is further supported by the company’s performance and the analyst’s confidence in its growth trajectory. With the upgrade and increased price target, Jefferies signals its belief that Exlservice is well-positioned to navigate the market and deliver value to its shareholders.
On the other hand, the company now expects revenue to be in the range of $1.805 billion to $1.830 billion, up from the prior guidance of $1.790 billion to $1.820 billion. This represents 11% to 12% year-over-year growth on both a reported and constant currency basis. The company now expect the adjusted diluted earnings per share for 2024 to be in the range of $1.59 to $1.62, up from the prior guidance of $1.58 to $1.62, representing growth of 11% to 13% over the prior year.
Additionally, revenue for the quarter ended June 30, 2024 increased to $448.4 million compared to $405.0 million for the second quarter of 2023, an increase of 10.7% on a reported basis and 10.8% on a constant currency basis. Revenue increased by 2.7% sequentially on a reported basis and 2.8% on a constant currency basis, from the first quarter of 2024. Adjusted operating income margin for the quarter ended June 30, 2024, was 19.8%, compared to 20.0% for the second quarter of 2023 and 18.9% for the first quarter of 2024. Adjusted diluted earnings per share for the quarter ended June 30, 2024, was $0.40, compared to $0.36 for the second quarter of 2023 and $0.38 for the first quarter of 2024.