EXLS
ExlService Holdings, Inc.
$36.79
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 38.3% below fair value
You pay
$36.79
Bear
$35.72
Fair
$59.59
Bull
$87.41
Bear
$35.72
-2.9%
10% stage 1 growth, 11% discount
Fair
$59.59
+62.0%
17% stage 1 growth, 11% discount
Bull
$87.41
+137.6%
22% stage 1 growth, 11% discount
Adjust Assumptions
16.8%
11.0%
3.0%
Key Value Driver
FCF growth rate (17% base case)
Terminal Value % of EV
44%
Implied Market Multiple
22.4x
Market is pricing in (growth)
10.5%
vs 16.9% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (19 analysts)
$44.00
Divergence from AlphaVal
35%
Summary
Using a two-stage FCF DCF with 17% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $59.59 per share.
Warnings
Stock-based employee pay equals 32% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $44.00 (from 19 analysts). Our estimate is 35% above the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions