3 Reasons Why Growth Investors Shouldn't Overlook ExlService Holdings (EXLS)

Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying strong growth stocks can be challenging due to inherent volatility and risks [1] Group 1: Company Overview - ExlService Holdings (EXLS) is currently highlighted as a recommended growth stock by the Zacks Growth Style Score system, which evaluates a company's genuine growth potential beyond traditional metrics [2] - The company has a favorable Growth Score and a top Zacks Rank, indicating strong investment potential [2] Group 2: Earnings Growth - Historical EPS growth for ExlService Holdings stands at 22.5%, with projected EPS growth of 14.2% for the current year, significantly surpassing the industry average of 8.1% [5] - Earnings growth is a critical factor for growth investors, as double-digit growth is often seen as a sign of robust future prospects [4] Group 3: Cash Flow Growth - ExlService Holdings has a year-over-year cash flow growth of 2.1%, outperforming the industry average of -11.2%, which is crucial for funding new projects without external financing [6] - The company's annualized cash flow growth rate over the past 3-5 years is 10.6%, compared to the industry average of 4.8%, indicating strong cash generation capabilities [7] Group 4: Earnings Estimate Revisions - There is a positive trend in earnings estimate revisions for ExlService Holdings, with the Zacks Consensus Estimate for the current year increasing by 1.3% over the past month, which correlates with potential stock price movements [8] - The overall earnings estimate revisions have contributed to ExlService Holdings achieving a Zacks Rank of 2, reflecting its strong growth potential [9] Group 5: Investment Recommendation - The combination of a strong Growth Score and favorable earnings revisions positions ExlService Holdings well for outperformance, making it an attractive option for growth investors [10]