Earnings beat, higher guidance and buybacks put ExlService Holdings in focus

ExlService Holdings (EXLS) has attracted fresh attention after reporting second quarter and six month 2026 results, raising full year revenue guidance and completing a sizeable share repurchase tranche.

ExlService Holdings' latest earnings, higher revenue guidance and ongoing buybacks arrive after a sharp rebound in the share price, with a 7 day share price return of 22.62% and a 30 day share price return of 26.65%. This comes against a year to date share price decline of 17.67% and a 1 year total shareholder return decline of 19.52%, while the 3 year and 5 year total shareholder returns of 22.67% and 43.09% show that longer term holders have still seen gains.

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After that sharp rebound, ExlService Holdings still trades at a sizeable discount to both analyst targets and some intrinsic value estimates. Is the market rightly cautious, or is it underpricing the earnings and buyback story here?

Most Popular Narrative: 22% Undervalued

Compared with the last close of $33.93, the most followed narrative places ExlService Holdings' fair value at $43.50, using a 7.5% discount rate and detailed long term assumptions.

The accelerated global adoption of AI and digital transformation in regulated industries is expanding the addressable market for ExlService, driving strong double-digit pipeline and growing annuity-like revenues; this trend supports sustained revenue growth and improved earnings visibility.

Want to see what sits behind that growth story? The narrative focuses on rising AI demand, richer data services and a tighter share count. Curious how those pieces fit together?

Result: Fair Value of $43.50 (UNDERVALUED)

However, ExlService Holdings still faces real risks, including tighter data privacy rules and rising skilled talent costs, which could pressure margins if its growth plans encounter friction.

Another View on ExlService Holdings' Valuation

The earlier narrative leans on a discounted cash flow view that points to ExlService Holdings trading at a sizeable discount, with the stock at $33.93 compared with an $80.08 future cash flow value estimate and a 57.6% discount to fair value.

Yet on earnings multiples, the picture is less one sided. ExlService trades on a P/E of 20.6x, which is close to its fair ratio of 20.7x and below the US Professional Services industry average of 23.2x, but above the peer average of 14.2x. That mix suggests some valuation support from cash flow models, while earnings based comparisons still leave room for debate. Which lens do you trust more when expectations move?

Next Steps

With all this in mind, are you leaning more optimistic or cautious on ExlService Holdings, and how quickly do you want to firm up that view? To see what the current optimism is based on, review the 4 key rewards

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.