On Monday, Exlservice Holdings, Inc. (NASDAQ:EXLS) stock 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. This adjustment reflects a growing confidence in the company's financial prospects and market position.
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.
Investors and market observers will be watching Exlservice closely to see if the company meets the expectations set forth by Jefferies, as it aims to maintain its growth and leverage its robust business model in the evolving IT services industry.
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