Issue #84

These two data-first leaders are currently trading at a significant discount to their 2026 price targets.

The data revolution isn’t about who has the most information—it’s about who can refine that raw noise into actionable intelligence. As we navigate a 2026 economy defined by shifting consumer loyalties and the "efficiency mandate," the spotlight is moving away from experimental AI and toward the companies that possess the two most critical assets: unmatched global data sets and the specialized expertise to deploy them.

This is where the analytics conversation shifts from "nice-to-have" insights to mission-critical infrastructure. Today, we are looking at the architects of this new data-first economy: the intelligence engine and the operations brain that are effectively "digitizing" the physical world.

👉 One company is the global "source of truth" for consumer behavior, providing the data backbone for $7 trillion in annual global spending.

👉 The other is the digital architect transforming the world’s largest insurance and healthcare providers into AI-native powerhouses.

👉 Both are deeply integrated into the Global 1000, increasingly profitable, and currently trading at valuations that have caught the eye of every major analyst on Wall Street.

In this edition, we break down the two stocks providing the "Full View" and the "Agentic AI" needed to survive the next decade—and why they are the foundation of any serious data-driven portfolio.

ExlService (NASDAQ: EXLS)

ExlService (NASDAQ: EXLS) is a global leader in data analytics and digital operations, specializing in transforming business models through artificial intelligence and deep industry expertise. Originally rooted in business process management, the company has successfully pivoted to become a "data-first" partner for Global 1000 companies across high-stakes sectors like insurance, healthcare, and banking.

Business Model and Revenue Streams 📦

EXL’s business model has undergone a significant evolution, shifting from traditional outsourcing to high-value AI and data engineering. The company operates through an integrated approach that helps clients modernize their data architecture before embedding AI into their core workflows. Its revenue is primarily categorized into two powerful segments:

• Data and AI-Led Solutions: This is the company’s fastest-growing and most critical engine, now accounting for approximately 56% of total revenue as of late 2025. It includes advanced analytics, data modernization, and "Agentic AI" solutions that automate complex decision-making. Revenue here is often project-based or tied to the scale of data managed.
• Digital Operations and Solutions (DOS): This segment focuses on managing end-to-end business processes (like insurance claims or healthcare management) using digital-first tools. While more traditional, it provides a stable, recurring revenue base, with over 75% of EXL’s total income classified as annuity-like or recurring.

ExlService is strategically positioned to navigate current macroeconomic shifts. While persistent inflation and high interest rates in 2025-2026 have pressured some sectors, EXL benefits from the "efficiency mandate"—as companies look to cut costs, they turn to EXL’s AI solutions to automate expensive manual processes. However, the company remains sensitive to wage inflation in India and the U.S. dollar's fluctuations, as a large portion of its global workforce is based in offshore delivery centers.

Recent Performance and Corporate Developments 📈

EXL delivered a robust performance in the third quarter of 2025, signaling that its pivot to AI is yielding tangible financial results. The company has consistently beaten analyst expectations throughout the year.

Q3 2025 Financial Highlights: 💰

• Total Revenue: Reached $529.6 million, a 12.2% increase year-over-year, driven by an 18% surge in the Data and AI segment.
• Net Profit: Reported a GAAP diluted EPS of $0.36, up nearly 11% from the previous year, while adjusted EPS (non-GAAP) reached $0.48.
• Guidance Hike: Management raised its full-year 2025 revenue outlook to between $2.07 billion and $2.08 billion, reflecting a 13% annual growth rate.

Strategic Initiatives and Mergers: 🤝

The company’s most significant recent move was the acquisition of ITI Data in late 2024, which significantly expanded its data engineering capabilities in the banking sector. In October 2025, EXL launched EXLdata.ai, an AI-native suite developed in collaboration with Databricks that uses over 65 AI agents to slash data migration times from months to days. Furthermore, EXL has secured over 10 new patents for AI solutions in early 2026, reinforcing its intellectual property moat.

Profitability and Fair Value 🎯

EXL is highly profitable, with a trailing net income of nearly $198 million. The company has maintained an adjusted operating margin of around 19.4%, balancing aggressive investments in R&D with operational efficiency.

Regarding fair value, EXL presents a compelling "growth at a reasonable price" (GARP) case. After a period of share price consolidation in early 2026, the stock currently trades at a P/E ratio of approximately 21.2x. While some conservative "bear" narratives suggest a lower fair value due to offshore risks, many Discounted Cash Flow (DCF) models suggest an intrinsic value closer to $57.00—$59.00, indicating the stock may be significantly undervalued at current prices near $31.00.

Analyst Estimates and Ratings 📊

• Consensus Rating: The consensus among Wall Street analysts is a "Buy" or "Strong Buy", with 70-75% of covering firms maintaining a bullish outlook.
• Price Target: The average 12-month price target stands at approximately $52.14, suggesting a massive potential upside of over 60% from recent trading levels. High-end targets have reached as far as $58.00.
• Recent Momentum: In the last 30 days, several firms have reiterated their "Buy" ratings, viewing the recent price dip as an attractive entry point for a company growing its AI business at a double-digit clip.

Investor-Focused Takeaway: Is EXLS Right for Your Portfolio?

ExlService offers a sophisticated way to play the AI revolution. Unlike hardware plays, EXL is an "implementation winner"—it makes money by actually making AI work for massive, legacy corporations. With a strong cash flow and a growing moat in specialized sectors like Insurance and Healthcare, it is a resilient pick for a data-driven portfolio.

What to Watch in the Near Term: 📈

• Q4 Earnings Release: Scheduled for February 24, 2026. Watch for updates on the "Agentic AI" adoption rates.
• Margin Expansion: Monitor if the high-margin AI segment can push overall operating margins toward the 20% mark in 2026.

NIQ Global Intelligence (NYSE: NIQ)

NIQ Global Intelligence (NYSE: NIQ) is a newly public titan in the consumer intelligence space, formed by the landmark 2023 merger of NielsenIQ and GfK. Re-entering the public markets via a $1.05 billion IPO in July 2025, the company now offers "The Full View"—the world’s most complete set of consumer buying data, covering over 90 countries and approximately $7.2 trillion in annual global spending.

Business Model and Revenue Streams 📦

NIQ’s business model revolves around its proprietary "Connect" data engine, which processes over 3.5 trillion data records per week. The company serves as the "source of truth" for 80% of Fortune 100 companies, helping them understand what consumers buy, why they buy it, and where they will shop next.

• Intelligence Subscriptions: This is NIQ's bread and butter, accounting for the vast majority of its revenue. Manufacturers and retailers pay for long-term access to retail measurement and consumer panel data. This segment is highly "sticky," boasting a Net Dollar Retention (NDR) of 105%.
• Analytics and Strategic Solutions: NIQ earns high-margin revenue through specialized tools like the "Revenue Optimizer" and its newly launched "Say-Do Gap" framework. These services use AI to help brands adjust pricing and innovation strategies in real-time.
• Macro Impact: NIQ is uniquely sensitive to global inflation and regional economic shifts. While high interest rates in 2025-2026 have led to more cautious consumer spending, this actually increases demand for NIQ’s data as brands become desperate to find "hidden" pockets of growth. However, a significant slowdown in China (projected at -5% for 2026) remains a headwind for their Asia-Pacific operations.

Recent Performance and Corporate Developments 📈

NIQ has had a volatile yet strategically active start to 2026. The company recently underwent a major capital structure transformation following its IPO, which has significantly cleared its balance sheet.

Recent Financial Highlights: 💰

• Q2 2025 Results: NIQ reported revenue of $1.04 billion, a 5.6% year-over-year increase. Its Adjusted EBITDA grew by 15.7%, reaching a healthy 20.6% margin.
• Debt Refinancing: In August 2025, the company successfully refinanced over $2.2 billion in debt, extending maturities to 2030 and reducing annual interest expenses by nearly $100 million.
• CEO Transition: In February 2026, the company announced a surprise leadership change. While this caused short-term stock price volatility, analysts believe the underlying business remains firm.

Strategic Initiatives and Mergers: 🤝

Following the massive NielsenIQ-GfK merger, NIQ has focused on smaller "tuck-in" acquisitions, such as Cornerstone Capabilities to bolster its revenue management AI. In early 2026, it launched a breakthrough behavioral framework to measure the "Say-Do Gap," helping retailers reclaim billions in lost sales by aligning consumer intent with actual purchase behavior.

Profitability and Fair Value 🎯

NIQ is currently in a "transition to profitability" phase on a GAAP basis. While it reported a net loss of $14.1 million in Q2 2025, this was a 93% improvement from the prior year. On an Adjusted EBITDA basis, the company is highly profitable, generating over $214 million in a single quarter.

The company’s path to a fair valuation is tied to its de-leveraging strategy. Management aims for a 3.5x net leverage ratio by the end of 2025. Currently trading near $10.70—$11.00, the stock is viewed as a deep-value play compared to its 52-week high of $20.39. Its price-to-sales ratio remains conservative compared to other data giants, suggesting that as the market digests the CEO transition and the 2025-2026 debt reduction, the price may correct upward.

Analyst Estimates and Ratings 📊

• Consensus Rating: Despite recent price drops, the consensus remains a "Buy" or "Strong Buy" (approx. 90% of analysts).
• Price Target: The average 12-month price target is approximately $21.50, with some aggressive targets reaching $24.00. This implies a potential upside of nearly 100% from early February 2026 levels.
• Recent Sentiment: While firms like Baird recently lowered their short-term target to $20.00 following the CEO departure, they maintained an "Outperform" rating, citing the company’s indispensable role in the CPG and Retail ecosystem.

Investor-Focused Takeaway: Is NIQ Right for Your Portfolio?

NIQ Global Intelligence is a "foundational" data stock. It doesn't just benefit from AI; it provides the massive, verified datasets that other companies' AI models need to function. It is a high-conviction pick for investors who believe that data is the new oil, provided they can stomach the short-term turbulence of a newly public company.

What to Watch in the Near Term: 📈

• New CEO Appointment: The market is waiting for a permanent successor to lead the next phase of AI integration.
• Regional Growth in Europe: While China is sluggish, NIQ expects 5% growth in Eastern Europe and 3% in Western Europe for 2026.
• Interest Savings: Watch for the impact of the $100 million in annual interest savings to hit the bottom line in upcoming 2026 reports.

Final Take: The Intelligence Engine and the Operations Brain

The data revolution isn’t just about having the most information—it’s about the speed and scale of execution. To win in 2026, companies need two things: the deepest data sets to understand the world and the AI-ready operations to act on that knowledge instantly.

That’s where NIQ Global Intelligence (NIQ) and ExlService (EXLS) stand apart.

📊 NIQ Global Intelligence (NIQ) — The Global Source of Truth

• ✔ Tracks $7.2 trillion in global spend across 90+ countries with "The Full View"
• ✔ Landmark NielsenIQ-GfK merger provides a moat that is virtually impossible to replicate
• ✔ Drastic debt reduction and high-margin SaaS growth driving a path to net profitability
• ➤ Best for: Investors seeking a deep-value play on global consumer data with significant upside potential as the company de-leverages.

🤖 ExlService (EXLS) — The Architect of Agentic AI

• ✔ Transitioned from back-office processing to a "Data-First" AI powerhouse
• ✔ Proprietary AI agents (EXLdata.ai) are slashing enterprise data migration times by 90%
• ✔ Consistent double-digit growth and a history of raising guidance and beating expectations
• ➤ Best for: Investors looking for a high-profitability AI compounder that is indispensable to the insurance, healthcare, and banking sectors.

Investor Insight

🧩 Want the world's most comprehensive consumer data "moat"? → NIQ

⚙️ Want the software brain automating the Fortune 500? → EXLS

Bottom Line:

Data is the new oil, but only if you have the refinery and the pipeline. NIQ owns the largest data reserves on the planet, while EXL provides the high-tech refinery that turns that data into corporate profit.

As the "efficiency mandate" forces every global enterprise to automate or be left behind, NIQ and EXLS aren’t just vendors—they are the foundational pillars of the modern analytics economy.

​
Happy Trading
​— Team Premium Stock Alerts