Financial Analysis: ExlService Holdings (EXLS) versus Checkpoint Systems (CKP)

ExlService Holdings (NASDAQ: EXLS) and Checkpoint Systems (NYSE:CKP) are both business services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, analyst recommendations and profitability.

Analyst Ratings

This is a summary of recent recommendations for ExlService Holdings and Checkpoint Systems, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ExlService Holdings 1 4 6 0 2.45
Checkpoint Systems 0 0 0 0 N/A

ExlService Holdings currently has a consensus price target of $61.82, indicating a potential upside of 1.41%. Given ExlService Holdings’ higher probable upside, analysts clearly believe ExlService Holdings is more favorable than Checkpoint Systems.

Insider & Institutional Ownership

93.9% of ExlService Holdings shares are held by institutional investors. 5.8% of ExlService Holdings shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares ExlService Holdings and Checkpoint Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ExlService Holdings 9.94% 14.81% 11.40%
Checkpoint Systems -27.26% -50.16% -20.24%

Risk and Volatility

ExlService Holdings has a beta of 1.3, indicating that its stock price is 30% more volatile than the S&P 500. Comparatively, Checkpoint Systems has a beta of 1.67, indicating that its stock price is 67% more volatile than the S&P 500.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
ExlService Holdings $685.99 million 3.02 $61.73 million $2.11 28.89
Checkpoint Systems N/A N/A N/A ($1.32) -7.68

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

Summary

ExlService Holdings beats Checkpoint Systems on 9 of the 10 factors compared between the two stocks.

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.

Checkpoint Systems Company Profile

Checkpoint Systems, Inc. is a United States-based supplier of merchandise availability solutions for the retail industry. The Company provides end-to-end solutions enabling retailers to achieve real-time inventory, accelerate the replenishment cycle, prevent out-of-stocks and reduce theft. It offers merchandise availability solutions, such as shrink management, including antennas, labels and tags, source tagging, deactivation, remote service and support, and Alpha High Theft Solutions, and merchandise visibility solutions, including inventory management, asset tracking and OneTag Program. OneTag Program allows retailers to obtain the benefits of inventory visibility and loss prevention with a single radio frequency identification tag. It offers apparel labelling solutions, such as Trim, including woven labels, printed fabric labels and specialty trim services, and brand merchandising, including printed items and self-adhesive. It serves markets, such as electronics and grocery.

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