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Investing.com - ExlService Holdings Inc. (NASDAQ:EXLS) has been named the top small and mid-cap investment idea for 2025 by TD Cowen in a research note released Monday. For deeper insights into small and mid-cap opportunities like EXLS, InvestingPro offers comprehensive research reports covering over 1,400 US stocks.
TD Cowen highlighted EXLS for its "high revenue visibility and relative insulation" through industry and geographic exposures that support attractive double-digit organic growth with a favorable mix shift. The firm believes EXLS is positioned to outperform 2025 estimates through consistent execution and prudent forecasts.
The research firm noted that EXLS has posted "consistent leading growth" over the past two years, driving stock outperformance of 46% over the last 12 months. TD Cowen expects this trend to continue through the second half of 2025 and into 2026 based on the current macroeconomic backdrop.
Other companies featured in TD Cowen’s best smidcap ideas include GXO Logistics, which the firm believes "has room to re-rate" following the resolution of its Wincanton acquisition and CEO uncertainty. Klaviyo (NASDAQ:NYSE:KVYO), currently valued at $8.84 billion with impressive gross margins of 76% and strong revenue growth of 34% in the last twelve months, Playtika (NASDAQ:PLTK), and Ultragenyx Pharmaceutical (NASDAQ:RARE) rounded out the list of top picks. According to InvestingPro data, analysts have set price targets for KVYO ranging from $35 to $60, suggesting potential upside from current levels.
TD Cowen specifically noted that ExlService’s target client industry and geographic exposures provide "relative insulation to tariff-induced pressures," while the company continues to innovate with incremental GenAI solution development to drive new growth.
In other recent news, Klaviyo Inc. reported its first-quarter earnings, exceeding expectations and showcasing strength in both revenue and earnings. The company has maintained a stable Net Revenue Retention rate of 108%, suggesting that it may not require significant new customer revenue to meet its 2025 revenue guidance. Klaviyo’s CEO, Andrew Bialecki, initiated a $372 million stock sale to cover tax obligations related to expiring stock options. While Klaviyo itself will not benefit financially from this sale, it has been managed by Goldman Sachs and Morgan Stanley (NYSE:MS).
Cantor Fitzgerald initiated coverage on Klaviyo with an Overweight rating, setting a price target of $48, reflecting confidence in the company’s strategic shift towards larger enterprises. Benchmark analysts raised the stock price target to $44, maintaining a Buy rating, citing stabilization across customer segments and a promising pipeline for customer service and marketing analytics solutions. Stifel analysts adjusted their price target to $45, also maintaining a Buy rating, and noted the company’s robust customer acquisition and retention.
Truist Securities reiterated a Buy rating with a $40 price target, highlighting Klaviyo’s resilience and effective execution in growth areas, particularly in international markets. The company’s focus on digital engagement rather than consumer spending is seen as advantageous in the current economic environment. Klaviyo’s introduction of new tools like Custom Objects aims to attract larger customers, further solidifying its market position.
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