Head to Head Survey: ExlService (EXLS) & Atento (ATTO)

Atento (NYSE: ATTO) and ExlService (NASDAQ:EXLS) are both small-cap business services companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, dividends, valuation, institutional ownership and earnings.

Valuation & Earnings

This table compares Atento and ExlService’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Atento $1.92 billion 0.30 -$16.80 million $0.75 10.53
ExlService $762.31 million 2.54 $48.88 million $2.52 22.48

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

Dividends

Atento pays an annual dividend of $0.34 per share and has a dividend yield of 4.3%. ExlService does not pay a dividend. Atento pays out 45.3% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of current ratings and price targets for Atento and ExlService, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atento 0 2 2 0 2.50
ExlService 1 5 6 0 2.42

Atento currently has a consensus target price of $12.38, suggesting a potential upside of 56.65%. ExlService has a consensus target price of $62.18, suggesting a potential upside of 9.78%. Given Atento’s stronger consensus rating and higher probable upside, analysts clearly believe Atento is more favorable than ExlService.

Risk and Volatility

Atento has a beta of 0.09, suggesting that its stock price is 91% less volatile than the S&P 500. Comparatively, ExlService has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Atento -0.88% 13.57% 4.00%
ExlService 6.41% 15.09% 11.51%

Insider and Institutional Ownership

95.1% of Atento shares are owned by institutional investors. Comparatively, 92.5% of ExlService shares are owned by institutional investors. 5.8% of ExlService shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

ExlService beats Atento on 11 of the 16 factors compared between the two stocks.

Atento Company Profile

Atento S.A., together with its subsidiaries, provides customer relationship management and business process outsourcing services and solutions in Brazil, the Americas, Europe, the Middle East, and Africa. It offers a range of front and back-end services, including sales, customer care, collections, back office, applications-processing, credit-management, and technical support services. The company serves clients primarily in the telecommunications and financial services sectors; and in multi-sectors, including consumer goods, retail, public administration, healthcare, travel, and transportation and logistics, as well as technology and media. It provides its services and solutions through digital channels, which include SMS, email, chats, social media and apps, and others, as well as through voice and in-person. The company was formerly known as Atento Floatco S.A. Atento S.A. was founded in 1999 and is based in Luxembourg.

ExlService Company Profile

ExlService Holdings, Inc. provides operations management and analytics services in the United States, the United Kingdom, and internationally. The company offers business process management (BPM) services to the insurance industry in the areas of claims processing, subrogation, premium and benefit administration, agency management, account reconciliation, policy research, underwriting support, new business processing, policy servicing, premium audit, surveys, billing and collection, commercial and residential survey, and customer services. It also provides BPM services related to the care management and population health, multi-chronic case management, dual eligible special needs plans, payment integrity, revenue optimization, and customer engagement for the healthcare industry; BPM services related to business processes in corporate and leisure travel, such as reservations, customer service, fulfillment, and finance and accounting; and finance and accounting BPM services, including procure-to-pay, order-to-cash, hire-to-retire, record-to-report, regulatory reporting, financial planning and analysis, audit and assurance, and treasury and tax processes. In addition, the company offers BPM services for banking and financial services industry comprising residential mortgage lending, retail banking and credit cards, commercial banking, and investment management; BPM services related to enhancing operating models, improving customer experience, reducing costs, shortening turnaround time, and simplifying compliance for clients; and industry-specific digital transformational services. Further, it provides predictive and prescriptive analytics in the areas of customer acquisition and lifecycle management, risk underwriting and pricing, operational effectiveness, credit and operational risk monitoring and governance, regulatory reporting, and data management. The company was founded in 1999 and is headquartered in New York, New York.

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