ExlService (EXLS) versus CIELO S A/S (CIOXY) Critical Analysis

ExlService (NASDAQ:EXLS) and CIELO S A/S (OTCMKTS:CIOXY) are both business services companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, earnings and institutional ownership.

Profitability

This table compares ExlService and CIELO S A/S’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ExlService 5.27% 13.63% 8.05%
CIELO S A/S 26.20% 18.75% 3.53%

Volatility and Risk

ExlService has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500. Comparatively, CIELO S A/S has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500.

Valuation and Earnings

This table compares ExlService and CIELO S A/S’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ExlService $883.11 million 2.41 $56.73 million $2.31 26.84
CIELO S A/S $3.22 billion 1.58 $1.12 billion N/A N/A

CIELO S A/S has higher revenue and earnings than ExlService.

Dividends

CIELO S A/S pays an annual dividend of $0.29 per share and has a dividend yield of 15.5%. ExlService does not pay a dividend.

Insider & Institutional Ownership

94.1% of ExlService shares are owned by institutional investors. 4.4% of ExlService shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations for ExlService and CIELO S A/S, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ExlService 0 3 3 0 2.50
CIELO S A/S 1 2 1 0 2.00

ExlService presently has a consensus price target of $63.20, indicating a potential upside of 1.94%. Given ExlService’s stronger consensus rating and higher possible upside, research analysts clearly believe ExlService is more favorable than CIELO S A/S.

Summary

ExlService beats CIELO S A/S on 9 of the 14 factors compared between the two stocks.

ExlService Company Profile

ExlService Holdings, Inc. provides operations management and analytics services in the United States, the United Kingdom, and internationally. The company offers business process management (BPM) services to the insurance industry in the areas of claims processing, subrogation, premium and benefit administration, agency management, account reconciliation, policy research, underwriting support, new business processing, policy servicing, premium audit, surveys, billing and collection, commercial and residential survey, and customer services. It also provides BPM services related to the care management, utilization management, multi-chronic case management, disease management, dual eligible special needs plans, payment integrity, revenue optimization, and customer engagement for the healthcare industry; BPM services related to business processes in corporate and leisure travel, such as reservations, customer service, fulfillment, and finance and accounting; and finance and accounting BPM services, including procure-to-pay, order-to-cash, hire-to-retire, record-to-report, regulatory reporting, financial planning and analysis, audit and assurance, and treasury and tax processes. In addition, the company offers BPM services for banking and financial services industry comprising residential mortgage lending, retail banking and credit cards, commercial banking, and investment management; BPM services related to enhancing operating models, enhancing customer experience, reducing costs, shortening turnaround time, and simplifying compliance for clients; and industry-specific digital transformational services. Further, it provides predictive and prescriptive analytics in the areas of customer acquisition and lifecycle management, risk underwriting and pricing, operational effectiveness, credit and operational risk monitoring and governance, regulatory reporting, and data management. The company was founded in 1999 and is headquartered in New York, New York.

CIELO S A/S Company Profile

Cielo S.A., through its subsidiaries, provides payment services in Brazil. The company is involved in the provision of services related to credit and debit cards, and other payment methods, including signing up of merchants and service providers; rental, installation, and maintenance of point of sale terminals; and data capture and processing of electronic and manual transactions. It also offers services related in the processing means of payments that involve cards, maintenance services, and contacts with merchants for acceptance of credit and debit cards; data transmission services to load fixed or mobile phone credits; software development and licensing of computer programs; electronic transactions processing; IT services for collection and management of accounts payable and receivable; and data processing services and support services to medical companies. The company was formerly known as Companhia Brasileira de Meios de Pagamento and changed its name to Cielo S.A. in December 2009. Cielo S.A. was founded in 1995 and is headquartered in Barueri, Brazil.

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