8/21/24 - $exls - Want 2 own, but <$308/21/24 :: VROCKSTAR :: NASDAQ:EXLS
Want 2 own, but <$30
- reviewing some B2B names and old "friend" $TNET. there's a PE that has about 70% of their assets in NYSE:TNET and also bowling (meme-ish) stonk NYSE:BOWL , and 13F's have hit... so what else does a guy who enjoys looking at these things to unwind on a wednesday night (me lol) do? turns out they also own NASDAQ:EXLS
- NASDAQ:EXLS is basically a better performing, better margin, more focused (half or more customers are insurance) and AI-forward version of $TNET. mgmt seems competent too from a few clips i've watched (i'd recommend everyone incorporate this into their due diligence... mgmt speech can really bull you up or turn you off).
- the bottom line is this... stock is basically a good LT performer. there's probably a lot more to go in a multi-year context. I'd like to own it. and EPS can continue to grow mid to high teens. that's great. it's not *exactly* software margins, so i can't say "let's do 25 or 30x PE" for something that's growing and in a macro-cyclical period of meh, but i'll give you 1.5x PEG on 15% which is ~22.5x and I'll even put it on the 2025 EPS of $1.86, which gets me close to $42. I think downside here is probably to re-test the earnings dump/repump level of $32.
- 20% return for YE25 from here... not bad. not amazing either. so while i *want* to own it, it's not a must own for me (I can own anything! probably you can too). so we will keep turning over rocks. if this thing hits $32 i reassess. but realistically i'd prefer it under $30.
- if you think/ see an AI-transformation here that's not being baked into their client acquisition growth or margin profile... then this would be some alpha that we can all use to make good money buying the stock where it stands today. we can of course try to buy some red days. but anyway. it's on my radar.
have a gn. lmk what you think
V
