General Finance Corporation (GFN) versus ExlService Holdings (EXLS) Critical Review
General Finance Corporation (NASDAQ: GFN) and ExlService Holdings (NASDAQ:EXLS) are both small-cap business services companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, earnings, valuation, risk and analyst recommendations.
Valuation and Earnings
This table compares General Finance Corporation and ExlService Holdings’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|General Finance Corporation||$275.92 million||0.44||$55.88 million||($0.33)||-13.79|
|ExlService Holdings||$720.56 million||2.64||$101.10 million||$1.97||28.67|
ExlService Holdings has higher revenue and earnings than General Finance Corporation. General Finance Corporation is trading at a lower price-to-earnings ratio than ExlService Holdings, indicating that it is currently the more affordable of the two stocks.
This table compares General Finance Corporation and ExlService Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|General Finance Corporation||-1.81%||-1.76%||-0.48%|
This is a breakdown of current ratings and target prices for General Finance Corporation and ExlService Holdings, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|General Finance Corporation||0||0||2||0||3.00|
General Finance Corporation currently has a consensus target price of $7.60, indicating a potential upside of 67.03%. ExlService Holdings has a consensus target price of $59.11, indicating a potential upside of 4.66%. Given General Finance Corporation’s stronger consensus rating and higher possible upside, equities research analysts plainly believe General Finance Corporation is more favorable than ExlService Holdings.
Institutional & Insider Ownership
19.2% of General Finance Corporation shares are held by institutional investors. Comparatively, 94.9% of ExlService Holdings shares are held by institutional investors. 25.8% of General Finance Corporation shares are held by insiders. Comparatively, 5.8% of ExlService Holdings shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Risk and Volatility
General Finance Corporation has a beta of 1.19, meaning that its stock price is 19% more volatile than the S&P 500. Comparatively, ExlService Holdings has a beta of 1.3, meaning that its stock price is 30% more volatile than the S&P 500.
ExlService Holdings beats General Finance Corporation on 10 of the 13 factors compared between the two stocks.
General Finance Corporation Company Profile
General Finance Corporation is a specialty rental services company. The Company offers a range of portable storage units, including its core 20-feet and 40-feet steel containers, office container, mobile office and modular space products and steel tanks. It has two geographic areas that include its four operating segments: the Asia-Pacific area, consisting of the leasing operations of Royal Wolf Holdings Limited and its Australian and New Zealand subsidiaries (Royal Wolf), and North America, consisting of the combined leasing operations of Pac-Van, Inc. and its Canadian subsidiary, PV Acquisition Corp. (Pac-Van) and Lone Star Tank Rental Inc. (Lone Star), and the manufacturing operations of GFN Manufacturing Corporation and its subsidiary, Southern Frac, LLC (Southern Frac). As of June 30, 2016, the Company provided its storage solutions to over 41,000 customers across a range of industries, including commercial, construction, retail, transportation, education and others.
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.
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