Comparing ExlService (NASDAQ:EXLS) & Farfetch (NYSE:FTCH)

ExlService (NASDAQ:EXLS) and Farfetch (NYSE:FTCH) are both mid-cap business services companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, analyst recommendations, risk, institutional ownership, profitability and earnings.

Institutional and Insider Ownership

93.9% of ExlService shares are held by institutional investors. Comparatively, 89.5% of Farfetch shares are held by institutional investors. 3.6% of ExlService shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings for ExlService and Farfetch, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ExlService 0 5 1 0 2.17
Farfetch 1 2 9 0 2.67

ExlService currently has a consensus target price of $109.33, indicating a potential downside of 15.72%. Farfetch has a consensus target price of $53.67, indicating a potential upside of 97.30%. Given Farfetch’s stronger consensus rating and higher possible upside, analysts clearly believe Farfetch is more favorable than ExlService.

Profitability

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

Net Margins Return on Equity Return on Assets
ExlService 11.03% 19.06% 11.32%
Farfetch -43.15% N/A -26.30%

Volatility and Risk

ExlService has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500. Comparatively, Farfetch has a beta of 3.12, meaning that its stock price is 212% more volatile than the S&P 500.

Earnings and Valuation

This table compares ExlService and Farfetch’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ExlService $958.43 million 4.51 $89.48 million $3.45 37.60
Farfetch $1.67 billion 5.76 -$3.35 billion ($7.37) -3.69

ExlService has higher earnings, but lower revenue than Farfetch. Farfetch is trading at a lower price-to-earnings ratio than ExlService, indicating that it is currently the more affordable of the two stocks.

Summary

ExlService beats Farfetch on 8 of the 14 factors compared between the two stocks.

About ExlService

ExlService Holdings, Inc. is an operations management and analytics company, which engages in providing business process management. It operates through the following segments: Insurance, Healthcare, Travel, Transportation, and Logistics, Finance and Accounting, Analytic, and All Other. The Insurance segment serves property and casualty insurance, life insurance, disability insurance, annuity, and retirement services companies. The Healthcare segment offers services related to care management or population health, payment integrity, revenue optimization, and customer engagement. The Travel, Transportation, and Logistics segment includes business processes in corporate and leisure travel such as reservations, customer service, fulfilment, and finance and accounting. The Finance and Accounting segment comprises of procure-to-pay, order-to-cash, hire-to-retire, record-to-report, regulatory reporting, financial planning and analysis, audit and assurance, treasury, and tax processes. The Analytics segment consists of driving improved business outcomes for customers by generating data-driven insights. The All Other segment involves in banking, financial, utilities, and consulting service

About Farfetch

Farfetch Ltd. engages in the retail of fashion and luxury goods. It offers womenswear, menswear, kidswear, vintage, fine watches, and fine jewelry. The company was founded by José Manuel Ferreira Neves in 2007 and launched in 2008 and is headquartered in London, the United Kingdom.

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