Investors may be interested in diversifying their portfolios with some of the unique technology companies delivering creative solutions for the top U.S. organizations as the business technology sector continues to grow. Exela Technologies Inc. (NASDAQ: XELA) is a market leader in business process automation, serving more than 60% of the Fortune 100. Is XELA stock a solid investment? Discover more about the XELA stock forecast below.
Exela serves over 4,000 enterprise customers in 50 countries with business process automation products. Business process automation is essentially the use of technology to reduce the need for human engagement in company operations and processes.
Exela’s products include HR solutions, authorized digital signature solutions, a social intelligence platform, and integrated end-to-end marketing solutions.
The corporation presently employs approximately 22,000 people and is headquartered in Irving, Texas.
XELA stock history
Exela debuted on July 15, 2014, as Quinpario, a blank check corporation with cash assets ranging from $500 to $600. The company rose steadily for nearly three years until June 2017, when it saw a significant year-long decline following its merger with SourceHOV and Novitex.
Upon the transaction, the corporate name was changed to Exela Technologies Inc. In May 2018, the negative trend reached a low of $268. The stock then attempted to recover, reaching a local high of $427.80 in October 2018, but was ultimately unsuccessful – XELA stock has been gradually declining since 2018. Its current price as of November 1, 2022 is $0.23, a drop of nearly 99% from its high in 2018.
XELA stock a good buy
Is the stock of XELA undervalued? Some analysts believe so, but not all of them. The company’s financials are bleak, with quarterly revenue down 8.96% and net income down 308.94%. However, the business outperformed its Q1 and Q2 earnings per share expectations by 10.02% and 32.48%, respectively.
According to Utradea, XELA stock has a price-to-earnings ratio of 3 out of 5, indicating that it is reasonably priced in comparison to other firms in the space. It also has a return on equity score of 4 out of 5, indicating that it is undervalued in comparison to competitors in the space, owing to higher ROE.
The current discounted cash flow value rating for XELA stock is 5, indicating that the firm may have excellent fundamentals.
The year 2022 has been difficult for technology firms in general, with the S&P 500 information technology sector down 21.62% as of November 1, 2022. If Exela starts to perform well and the market gains confidence in the information technology industry, XELA stock might skyrocket.
If XELA stock is going to break out of its slump, now is the time to buy while the stock is low. While it is doubtful, if the firm ever reaches its 2018 high, an investor who buys now stands to earn by more than 150,000%.
Exela Stock Influencing Factors
Recent leadership changes at Exela may have a long-term impact on the company’s valuation.
Ronald Cogburn, Exela’s CEO since its IPO in 2017, will step down on April 30, 2022. Par Chadha, the executive chairman, now leads the company. Time will tell whether this leadership transition has a substantial impact on the company’s future.
Exela recently sold its European division, XBP Europe, to CF Acquisition Corp VIII, a special-purpose acquisition firm, for $220 million. The transaction is expected to finalize in the first half of 2023. When XBP Europe goes public, Exela is expected to retain a majority stake.
Such investments can assist a company boost organizational efficiency and reduce operating debts, which can be beneficial to the stock. A successful IPO for XBP Europe may boost investor confidence in XELA, given the business will have a majority stake.
Exela Technologies Inc. is a business process automation market leader serving over 4,000 enterprise customers in 50 countries. Despite experiencing a significant decline in its stock price since 2018, some analysts believe that the current price may present a buying opportunity for investors. While the company’s financials are bleak, its return on equity score and discounted cash flow value rating suggest that the firm may have strong fundamentals. Recent leadership changes and the sale of its European division may have a long-term impact on the company’s valuation. However, it is essential to keep in mind that investing in stocks comes with inherent risks, and investors should conduct thorough research before making investment decisions.
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