Citi
recently
named
one
under-the-radar
company
to
buy
on
a
“data
and
AI
opportunity.”
That’s
U.S.-listed
ExlService
Holdings
,
an
analytics
and
digital
solutions
company.
“With
AI,
EXLS
views
its
differentiation
and
opportunity
in
its
ability
to
combine
domain,
data,
and
AI
expertise
to
embed
AI
into
client
workflows
and
fine-tune
models
to
get
higher
accuracy
levels,”
Citi
said
in
a
May
8
note.
Citi
noted
that
ExlService
said
its
current
exposure
to
its
data
and
artificial
intelligence-led
business
is
at
about
51%
of
its
2023
revenue.
That
has
grown
at
a
32%
compound
annual
growth
rate
since
2020,
according
to
the
Citi
note.
The
company
pivoted
to
data
and
AI
only
in
recent
years,
but
is
now
able
to
meet
demand
for
AI
services,
Citi
noted,
adding
that
the
company
said
its
total
addressable
market
has
increased
nearly
three
times
to
$950
billion
—
from
$350
billion
before
the
AI
business.
Citi
said
the
company
has
highlighted
some
factors
that
can
drive
growth,
including
tapping
its
data
capabilities
to
target
“higher
value”
potential
customers,
and
increasing
revenue
mix
via
partnerships.
The
bank
pointed
out
that
ExlService
has
the
talent
to
meet
the
demand
too,
with
its
more
than
13,000
AI,
generative
AI,
data
and
digital
“experts.”
“EXLS
also
provided
medium-term
targets
(2024-25)
of
double
digit
revenue
growth,
incremental
margin
improvement,
and
faster-than-revenue
EPS
growth,”
Citi
analysts
wrote.
“We
continue
to
like
EXLS’
positioning
to
meet
these
demand
trends
and
continue
its
industry-leading
growth
levels
along
with
its
beat-and-raise
execution,”
they
added.
The
current
demand
pipeline
for
its
data
and
AI
services
stand
at
$2
billion,
according
to
Citi.
The
bank
gave
the
stock
a
buy
rating
and
a
price
target
of
$37,
or
potential
upside
of
22%.
According
to
FactSet,
analysts
covering
the
stock
give
it
a
73%
buy
rating
and
average
upside
of
20.9%,
with
a
consensus
price
target
of
$36.61.
