Is ExlService Holdings, Inc. overvalued or undervalued?

As of 29 April 2025, ExlService Holdings, Inc. has moved from an attractive to a very attractive valuation grade. The company appears to be undervalued based on its strong performance metrics, including a P/E ratio of 37, a ROCE of 28.07%, and an ROE of 21.55%. In comparison to its peers, ExlService's P/E ratio is slightly higher than the industry average, indicating that while it is priced at a premium, its growth potential justifies this valuation.
When evaluating peer companies, ExlService's P/E ratio of 37.17 is comparable to its closest competitor, which has a P/E of 35.00, suggesting that ExlService is positioned well within its industry. Additionally, its EV to EBITDA ratio of 23.67 reflects a solid valuation relative to its earnings potential. Despite recent underperformance against the S&P 500 over the past month, the company's one-year return of 46.06% significantly outpaces the index, reinforcing the notion that it remains a strong investment opportunity.