A Preview Of ExlService's Q3 Earnings

Barrington Research expects ExlService Holdings, Inc. EXLS earnings and revenues lower than consensus, when it reports its third-quarter financial results on October 27, despite maintaining an Outperform rating on the stock.

Analyst Vincent Colicchio anticipates third quarter non-GAAP EPS of $0.58, which would represent a flat comparison year-over-year, but sequential growth of 6 percent. The EPS forecast is $0.01 less than the FactSet consensus of $0.59.

The analyst projects quarterly revenue to grow 7 percent from last year to $175.2 million, which is 1 percent less than the FactSet consensus of $176.5 million.

“The company's pipeline was large and continued to expand as of the last earnings call. In OM, areas of strength included the insurance and healthcare verticals and the finance/accounting service line. In analytic, areas of strength included the financial services, healthcare and retail verticals,” Colicchio wrote in a note.

Related Link: EXL Acquires IQR Consulting, Terms Not Disclosed

Looking ahead, the analyst estimates 2016 revenue/non-GAAP EPS forecasts at $697.3 million/$2.33, which are largely in line with the FactSet consensus forecasts of $697.9 million/$2.32. The company’s guidance stands at revenue of $691 million–$703 million and EPS of $2.25–$2.35.

“EXL has a high level of revenue visibility, which makes us confident In management's ability to achieve their financial objectives,” Colicchio continued.

Notably, when management updated their 2016 financial guidance in July, which was largely unchanged, they had 90 percent visibility to the mid-point ($700 million) of their revenue guidance range.

The analyst has a price target of $55, which implies potential upside of 11 percent over Wednesday’s close of $49.61.

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