On Friday, Jefferies updated its outlook on Exlservice (NASDAQ: EXLS) shares, raising the price target to $35 from $34 while maintaining a Hold rating on the stock.
The adjustment follows Exlservice's performance, which surpassed expectations, and the company's increased guidance due to the positive results.
Exlservice's recent financial results have outperformed projections, leading to an upward revision of their future guidance. The firm's Digital Operations segment is anticipated to persist in its robust double-digit growth trajectory. Furthermore, the Analytics division is expected to see accelerated growth following what is believed to be the lowest point in the previous quarter.
Jefferies has adjusted its 2024 revenue and adjusted earnings per share (EPS) estimates for Exlservice slightly upward, citing the recent results and the management's guidance. The firm expressed increased confidence in the management's projections following the latest financial outcomes.
Despite the positive developments and an attractive valuation, Jefferies has opted to maintain a cautious approach. The firm's stance remains patient, reiterating a Hold rating on Exlservice stock. The raised price target reflects the improved performance and optimistic growth prospects for the company's operations.
In other recent news, Exlservice has reported a strong start to 2024 with a 9% increase in first-quarter revenues to $436 million, and adjusted earnings per share (EPS) also rising to $0.38.
Additionally, the company has announced a partnership with NVIDIA (NASDAQ:NVDA) to create AI applications for sectors such as insurance, healthcare, and banking.
TD Cowen has maintained a Buy rating on Exlservice stock, holding a $37.00 price target, while Jefferies has updated its outlook on Exlservice, raising the price target to $35 while maintaining a Hold rating.
The company's Digital Operations & Solutions segment saw a 12% year-over-year growth to $246 million, and the Insurance segment reported a 15.6% increase. However, the Healthcare segment experienced a slight decline of 1.7% year-over-year.
These recent developments suggest promising growth prospects for Exlservice. The company's focus on data and AI strategy has spurred growth across various sectors, and it has revised the lower end of its full-year guidance for both revenue and EPS. The company's leadership team remains optimistic about future growth prospects, despite some challenges in the macroeconomic landscape.
InvestingPro Insights
Exlservice (NASDAQ: EXLS) has been capturing investor interest following its recent performance. According to InvestingPro data, Exlservice boasts a market capitalization of $5.3 billion and a Price/Earnings (P/E) ratio of 32.67, indicating a premium valuation relative to its earnings. The company's revenue growth has been positive, with a 10.91% increase over the last twelve months as of Q2 2024, underscoring the robust growth trajectory highlighted by Jefferies.
InvestingPro Tips reveal that Exlservice's management has been actively buying back shares, which could be a sign of confidence in the company's prospects. Meanwhile, the company's liquid assets surpass its short-term obligations, suggesting a solid liquidity position. However, analysts have flagged concerns with two analysts revising their earnings downwards for the upcoming period, and the company trading at a high P/E ratio in relation to near-term earnings growth. For investors seeking more insights, there are additional tips available on InvestingPro, including perspectives on Exlservice's debt levels, profitability, and historical returns.
Overall, Exlservice's performance and strategic moves seem to align with Jefferies' optimistic yet cautious outlook. For investors considering Exlservice as part of their portfolio, the detailed analysis and additional InvestingPro Tips, which are readily accessible, can provide a deeper understanding of the company's financial health and market position.
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