ExlService (NASDAQ:EXLS) vs. ServiceNow (NYSE:NOW) Critical Comparison

ServiceNow (NYSE:NOW) and ExlService (NASDAQ:EXLS) are both computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, risk, valuation, dividends, profitability, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a breakdown of current ratings and price targets for ServiceNow and ExlService, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ServiceNow	1	5	31	1	2.84
ExlService	0	1	4	0	2.80

ServiceNow presently has a consensus price target of $1,149.67, indicating a potential upside of 38.63%. ExlService has a consensus price target of $54.50, indicating a potential upside of 37.28%. Given ServiceNow’s stronger consensus rating and higher possible upside, research analysts plainly believe ServiceNow is more favorable than ExlService.

Earnings & Valuation

This table compares ServiceNow and ExlService”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ServiceNow	$12.67 billion	13.62	$1.43 billion	$8.27	100.28
ExlService	$2.03 billion	3.11	$198.30 million	$1.47	27.01

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

Profitability

This table compares ServiceNow and ExlService’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ServiceNow	13.66%	19.23%	9.30%
ExlService	11.91%	25.60%	15.03%

Institutional & Insider Ownership

87.2% of ServiceNow shares are owned by institutional investors. Comparatively, 92.9% of ExlService shares are owned by institutional investors. 0.3% of ServiceNow shares are owned by insiders. Comparatively, 4.0% of ExlService shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

ServiceNow has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500. Comparatively, ExlService has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500.

Summary

ServiceNow beats ExlService on 11 of the 15 factors compared between the two stocks.

About ServiceNow

ServiceNow, Inc. provides end to-end intelligent workflow automation platform solutions for digital businesses in the North America, Europe, the Middle East and Africa, Asia Pacific, and internationally. The company operates the Now platform for end-to-end digital transformation, artificial intelligence, machine learning, robotic process automation, process mining, performance analytics, and collaboration and development tools. It also provides asset management, cloud observability, integrated risk management; information technology (IT) service management applications; IT service management product suite for enterprise's employees, customers, and partners; strategic portfolio management product suite; IT operations management product that connects a customer's physical and cloud-based IT infrastructure; IT asset management; and security operations that connects with internal and third party. In addition, the company offers integrated risk management product to manage risk and resilience; environmental, social and governance management product; human resources, legal, and workplace service delivery products; customer service management product; and field service management applications. Further, the company provides app engine product; automation engine; platform privacy and security product; and source-to-pay operations. It serves to government, financial services, healthcare, telecommunications, manufacturing, IT services, technology, oil and gas, education, and consumer products through service providers and resale partners. The company was formerly known as Service-now.com and changed its name to ServiceNow, Inc. in May 2012. ServiceNow, Inc. was founded in 2004 and is headquartered in Santa Clara, California.

About ExlService

ExlService Holdings, Inc. operates as a data analytics, and digital operations and solutions company in the United States and internationally. The company operates through Insurance, Healthcare, Analytics, and Emerging Business segments. It also provides digital operations and solutions and analytics-driven services, such as claims processing, premium and benefit administration, agency management, account reconciliation, policy research, underwriting support, new business acquisition, policy servicing, premium audit, surveys, billing and collection, commercial and residential survey, and customer service using digital technology, artificial intelligence, machine learning, and advanced automation; digital customer acquisition services using a software-as-a-service delivery model through LifePRO and LISS platforms; subrogation services; and Subrosource software platform, an end-to-end subrogation platform. In addition, the company offers health care services related to care management, utilization management, disease management, payment integrity, revenue optimization, and customer engagement. Further, it provides financial planning and analysis, management reporting, forecasting and decision support, data management, regulatory reporting and risk, and compliance services; reservations, customer, and fulfilment services; freight billing, collections, claims management, freight audit, freight scheduling, supply chain management, and revenue assurance services; residential mortgage lending, title verification and validation, retail banking and credit cards, trust verification, commercial banking, and investment management; merchandising, pricing, and demand forecasting; and digital operations and solutions. The company offers predictive and prescriptive analytics in the areas of customer acquisition and lifecycle management. ExlService Holdings, Inc. was founded in 1999 and is headquartered in New York, New York.