Critical Review: ExlService (NASDAQ:EXLS) & XBP Europe (NASDAQ:XBP)

ExlService (NASDAQ:EXLS) and XBP Europe (NASDAQ:XBP) are both business services companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, earnings, institutional ownership, profitability, dividends, analyst recommendations and valuation.

Institutional and Insider Ownership

92.9% of ExlService shares are held by institutional investors. Comparatively, 15.7% of XBP Europe shares are held by institutional investors. 4.2% of ExlService shares are held by insiders. Comparatively, 82.5% of XBP Europe shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and target prices for ExlService and XBP Europe, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ExlService	0	1	6	0	2.86
XBP Europe	0	0	0	0	0.00

ExlService currently has a consensus target price of $42.86, suggesting a potential downside of 8.46%. Given ExlService’s stronger consensus rating and higher possible upside, analysts clearly believe ExlService is more favorable than XBP Europe.

Profitability

This table compares ExlService and XBP Europe’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ExlService	10.61%	23.23%	13.38%
XBP Europe	N/A	N/A	-18.77%

Risk & Volatility

ExlService has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500. Comparatively, XBP Europe has a beta of -0.32, indicating that its share price is 132% less volatile than the S&P 500.

Valuation and Earnings

This table compares ExlService and XBP Europe”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ExlService	$1.63 billion	4.62	$184.56 million	$1.14	41.07
XBP Europe	$157.86 million	0.25	-$11.05 million	N/A	N/A

ExlService has higher revenue and earnings than XBP Europe.

Summary

ExlService beats XBP Europe on 11 of the 12 factors compared between the two stocks.

About ExlService

ExlService Holdings, Inc. operates as a data analytics, and digital operations and solutions company in the United States and internationally. The company operates through Insurance, Healthcare, Analytics, and Emerging Business segments. It also provides digital operations and solutions and analytics-driven services, such as claims processing, premium and benefit administration, agency management, account reconciliation, policy research, underwriting support, new business acquisition, policy servicing, premium audit, surveys, billing and collection, commercial and residential survey, and customer service using digital technology, artificial intelligence, machine learning, and advanced automation; digital customer acquisition services using a software-as-a-service delivery model through LifePRO and LISS platforms; subrogation services; and Subrosource software platform, an end-to-end subrogation platform. In addition, the company offers health care services related to care management, utilization management, disease management, payment integrity, revenue optimization, and customer engagement. Further, it provides financial planning and analysis, management reporting, forecasting and decision support, data management, regulatory reporting and risk, and compliance services; reservations, customer, and fulfilment services; freight billing, collections, claims management, freight audit, freight scheduling, supply chain management, and revenue assurance services; residential mortgage lending, title verification and validation, retail banking and credit cards, trust verification, commercial banking, and investment management; merchandising, pricing, and demand forecasting; and digital operations and solutions. The company offers predictive and prescriptive analytics in the areas of customer acquisition and lifecycle management. ExlService Holdings, Inc. was founded in 1999 and is headquartered in New York, New York.

About XBP Europe

XBP Europe Holdings, Inc. provides bills, payments, and related solutions and services in France, Germany, the United Kingdom, Sweden, and internationally. The company operates through two segments, Bills & Payments and Technology. The Bills & Payments segment focuses on optimizing how bills and payments are processed by businesses of all sizes and industries. This segment also offers automation of accounts payable and accounts receivables processes and seeks to integrate buyers and suppliers, as well as engages in digital transformation business. The Technology segment engages in the sale of recurring software licenses and related maintenance, and hardware solutions, as well as provision of related maintenance and professional services. In addition, the company offers XBP platform that provides a secured network allowing billers, consumers, and businesses to communicate and transact; XBP Omnidirect, a cloud-based platform that provides enterprise level client communication management; and Reaktr.ai for cybersecurity, data modernization and cloud management, and generative AI. Further, it provides request to pay solutions; enterprise information management solutions; robotic process automation solutions; digital mailroom and records digitization solutions; business process management and intelligent workflow automation solutions; integrated communications solution; banking and financial industry solutions and services; cross-border payments; digitization of checks; confirmation of payee; and mortgage and loan management solutions. The company is based in Egham, the United Kingdom. XBP Europe Holdings, Inc. operates as a subsidiary of Exela Technologies, Inc.