Financial Survey: Leidos (NYSE:LDOS) & ExlService (NASDAQ:EXLS)

Leidos (NYSE:LDOS) and ExlService (NASDAQ:EXLS) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, dividends, risk, profitability and earnings.

Volatility and Risk

Leidos has a beta of 0.58, indicating that its share price is 42% less volatile than the S&P 500. Comparatively, ExlService has a beta of 0.91, indicating that its share price is 9% less volatile than the S&P 500.

Valuation & Earnings

This table compares Leidos and ExlService”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Leidos	$17.33 billion	1.35	$1.25 billion	$10.72	17.09
ExlService	$1.84 billion	3.59	$198.30 million	$1.47	28.31

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

Insider and Institutional Ownership

76.1% of Leidos shares are held by institutional investors. Comparatively, 92.9% of ExlService shares are held by institutional investors. 1.0% of Leidos shares are held by company insiders. Comparatively, 4.0% of ExlService shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and price targets for Leidos and ExlService, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Leidos	0	6	10	0	2.63
ExlService	0	1	4	0	2.80

Leidos presently has a consensus price target of $205.42, indicating a potential upside of 12.12%. ExlService has a consensus price target of $54.50, indicating a potential upside of 30.96%. Given ExlService’s stronger consensus rating and higher probable upside, analysts clearly believe ExlService is more favorable than Leidos.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Leidos	8.11%	33.02%	11.40%
ExlService	11.91%	25.60%	15.03%

Summary

ExlService beats Leidos on 9 of the 14 factors compared between the two stocks.

About Leidos

Leidos Holdings, Inc., together with its subsidiaries, provides services and solutions in the defense, intelligence, civil, and health markets in the United States and internationally. The company operates through Defense Solutions, Civil, and Health segments. The Defense Solutions segment offers national security solutions and systems for air, land, sea, space, and cyberspace for the U.S. Intelligence Community, the Department of Defense, the space development agency, the National Aeronautics and Space Administration, defense information systems agency, military services, and government agencies of U.S. allies abroad, as well as other federal and commercial customers in the national security industry. The solutions include technology, large-scale systems, command and control platforms, data analytics, logistics, and cybersecurity solutions, as well as intelligence analysis and operations support services to critical missions. The Civil segment provides systems integration services to air navigation service providers, including the federal aviation administration, the En route automation modernization, advanced technology oceanic procedure, time based flow management, terminal flight data management, geo-7, and future flight services, as well as enterprise-information display systems; and security detection services. It also offers information technology (IT) solutions in cloud computing, mobility, application modernization, DevOps, data center, network modernization, asset management, help desk operations, and digital workplace enablement; and environment, energy, and infrastructure services. The Health segment offers solutions to federal and commercial customers responsible for health and well-being of people, include health information management, managed health, digital modernization, and life sciences research and development services. Leidos Holdings, Inc. was founded in 1969 and is headquartered in Reston, Virginia.

About ExlService

ExlService Holdings, Inc. operates as a data analytics, and digital operations and solutions company in the United States and internationally. The company operates through Insurance, Healthcare, Analytics, and Emerging Business segments. It also provides digital operations and solutions and analytics-driven services, such as claims processing, premium and benefit administration, agency management, account reconciliation, policy research, underwriting support, new business acquisition, policy servicing, premium audit, surveys, billing and collection, commercial and residential survey, and customer service using digital technology, artificial intelligence, machine learning, and advanced automation; digital customer acquisition services using a software-as-a-service delivery model through LifePRO and LISS platforms; subrogation services; and Subrosource software platform, an end-to-end subrogation platform. In addition, the company offers health care services related to care management, utilization management, disease management, payment integrity, revenue optimization, and customer engagement. Further, it provides financial planning and analysis, management reporting, forecasting and decision support, data management, regulatory reporting and risk, and compliance services; reservations, customer, and fulfilment services; freight billing, collections, claims management, freight audit, freight scheduling, supply chain management, and revenue assurance services; residential mortgage lending, title verification and validation, retail banking and credit cards, trust verification, commercial banking, and investment management; merchandising, pricing, and demand forecasting; and digital operations and solutions. The company offers predictive and prescriptive analytics in the areas of customer acquisition and lifecycle management. ExlService Holdings, Inc. was founded in 1999 and is headquartered in New York, New York.