Is It Time To Consider Buying ExlService Holdings, Inc. (NASDAQ:EXLS)?

ExlService Holdings, Inc. (NASDAQ:EXLS), might not be a large cap stock, but it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$32.87 and falling to the lows of US$27.37. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether ExlService Holdings' current trading price of US$27.77 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at ExlService Holdings’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for ExlService Holdings

What's The Opportunity In ExlService Holdings?

According to my valuation model, ExlService Holdings seems to be fairly priced at around 19% below my intrinsic value, which means if you buy ExlService Holdings today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $34.16, then there’s not much of an upside to gain from mispricing. Furthermore, ExlService Holdings’s low beta implies that the stock is less volatile than the wider market.

Can we expect growth from ExlService Holdings?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. ExlService Holdings' earnings over the next few years are expected to increase by 28%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in EXLS’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on EXLS, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Since timing is quite important when it comes to individual stock picking, it's worth taking a look at what those latest analysts forecasts are. Luckily, you can check out what analysts are forecasting by clicking here.

If you are no longer interested in ExlService Holdings, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.