The Advisory Board (NASDAQ: ABCO) and ExlService Holdings (NASDAQ:EXLS) are both mid-cap industrials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, earnings, valuation, risk, profitability and dividends.

Volatility and Risk

The Advisory Board has a beta of 1.34, indicating that its share price is 34% more volatile than the S&P 500. Comparatively, ExlService Holdings has a beta of 1.3, indicating that its share price is 30% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for The Advisory Board and ExlService Holdings, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Advisory Board 0 11 3 0 2.21
ExlService Holdings 1 4 6 0 2.45

The Advisory Board presently has a consensus price target of $51.44, indicating a potential downside of 4.44%. ExlService Holdings has a consensus price target of $61.82, indicating a potential upside of 0.09%. Given ExlService Holdings’ stronger consensus rating and higher probable upside, analysts plainly believe ExlService Holdings is more favorable than The Advisory Board.

Valuation & Earnings

This table compares The Advisory Board and ExlService Holdings’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
The Advisory Board $803.42 million 2.73 $91.23 million $1.74 30.94
ExlService Holdings $685.99 million 3.06 $61.73 million $2.11 29.27

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

Profitability

This table compares The Advisory Board and ExlService Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Advisory Board 9.24% 12.31% 3.33%
ExlService Holdings 9.94% 14.81% 11.40%

Insider and Institutional Ownership

95.5% of The Advisory Board shares are held by institutional investors. Comparatively, 91.5% of ExlService Holdings shares are held by institutional investors. 4.7% of The Advisory Board shares are held by insiders. Comparatively, 5.8% of ExlService Holdings shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

ExlService Holdings beats The Advisory Board on 9 of the 14 factors compared between the two stocks.

The Advisory Board Company Profile

The Advisory Board Company is a provider of software and solutions to the healthcare and higher education industries. The Company offers subscription-based membership programs, software and data-enabled services. All of its programs are rooted in best practices and extends across four areas, including Best practices research, Technology, Data-enabled services and Consulting services. The best practices research and insight programs provide the foundation for all of its other programs. The Company offers technology analytics programs anchored by cloud-based software applications that surface performance improvement opportunities to accelerate progress. Through its consulting services, the Company provides on-the-ground support for performance improvement initiatives, as well as best practice professional management of areas of the hospital or medical group. The Company’s data-enabled services are primarily focused in the area of enrollment management.

ExlService Holdings Company Profile

ExlService Holdings, Inc. is an operations management and analytics company. The Company segments include Insurance; Healthcare; Travel, Transportation and Logistics; Finance and Accounting (F&A); Analytics, and All Other. The Insurance operating segment serves property and casualty insurance, life insurance, disability insurance, annuity and retirement services companies. The Healthcare operating segment serves healthcare payers and providers. The Travel, Transportation and Logistics operating segment primarily serves clients in the travel, transport and logistics industries. The F&A operating segment provides finance and accounting business process management (BPM) services across an array of F&A processes. The Analytics services focus on driving business outcomes for its customers by generating data-driven insights across all parts of its customers’ businesses. The All Other segment includes banking and financial services, utilities and consulting operating segments.

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