ExlService (NASDAQ:EXLS) and InnerWorkings (NASDAQ:INWK) are both business services companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, analyst recommendations, profitability, institutional ownership, dividends and valuation.
Risk & Volatility
ExlService has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500. Comparatively, InnerWorkings has a beta of 1.32, meaning that its share price is 32% more volatile than the S&P 500.
Profitability
This table compares ExlService and InnerWorkings’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| ExlService | 6.82% | 13.68% | 7.62% |
| InnerWorkings | -3.10% | 0.50% | 0.14% |
Analyst Ratings
This is a breakdown of recent ratings and price targets for ExlService and InnerWorkings, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| ExlService | 1 | 3 | 2 | 0 | 2.17 |
| InnerWorkings | 0 | 0 | 2 | 0 | 3.00 |
ExlService presently has a consensus target price of $79.20, indicating a potential upside of 35.50%. InnerWorkings has a consensus target price of $6.00, indicating a potential upside of 160.87%. Given InnerWorkings’ stronger consensus rating and higher probable upside, analysts plainly believe InnerWorkings is more favorable than ExlService.
Earnings & Valuation
This table compares ExlService and InnerWorkings’ gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| ExlService | $991.35 million | 2.03 | $67.66 million | $2.43 | 24.05 |
| InnerWorkings | $1.12 billion | 0.11 | -$76.17 million | ($0.08) | -28.75 |
ExlService has higher earnings, but lower revenue than InnerWorkings. InnerWorkings is trading at a lower price-to-earnings ratio than ExlService, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
93.2% of ExlService shares are held by institutional investors. Comparatively, 82.9% of InnerWorkings shares are held by institutional investors. 3.6% of ExlService shares are held by company insiders. Comparatively, 6.4% of InnerWorkings shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Summary
ExlService beats InnerWorkings on 8 of the 13 factors compared between the two stocks.
About ExlService
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.
About InnerWorkings
InnerWorkings, Inc. provides marketing execution solutions in North America and internationally. The company’s software applications and databases create an integrated solution that stores, analyzes, and tracks the production capabilities of its supplier network, as well as detailed pricing data. It offers outsourced print management solutions that encompass the design, sourcing, and delivery of printed marketing materials, including direct mail, in-store signage, and marketing collateral; and outsourced solutions for the design, sourcing, and delivery of branded merchandise and product packaging. The company also assists clients with the management of events, promotions spending, and related procurement needs; and designs, sources, and installs point of sale displays, permanent retail fixtures, and overall store design, as well as offers on-site outsourced creative studio, digital marketing, and on-demand creative services. In addition, it provides fulfillment and logistics services, such as kitting and assembly, inventory management, and pre-sorting postage. Further, the company offers creative services comprising copywriting, graphics and Website design, identity work and marketing collateral development, and image and print-ready page processing and proofing capability services. It serves corporate clients in a range of industries, such as retail, financial services, hospitality, consumer packaged goods, non-profits, healthcare, pharmaceuticals, food and beverage, broadcasting and cable, and transportation. The company was founded in 2001 and is headquartered in Chicago, Illinois.
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