The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how government & technical consulting stocks fared in Q4, starting with UL Solutions (NYSE:ULS).
The sector has historically benefitted from steady government spending on defense, infrastructure, and regulatory compliance, providing firms long-term contract stability. However, the Trump administration is showing more willingness than previous administrations to upend government spending and bloat. Whether or not defense budgets get cut, the rising demand for cybersecurity, AI-driven defense solutions, and sustainability consulting should benefit the sector for years, as agencies and enterprises seek expertise in navigating complex technology and regulations. Additionally, industrial automation and digital engineering are driving efficiency gains in infrastructure and technical consulting projects, which could help profit margins.
The 7 government & technical consulting stocks we track reported a very strong Q4. As a group, revenues beat analysts’ consensus estimates by 2.5% while next quarter’s revenue guidance was 6.7% above.
While some government & technical consulting stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.7% since the latest earnings results.
Best Q4: UL Solutions (NYSE:ULS)
Founded in 1894 as a response to the growing dangers of electricity in American homes and businesses, UL Solutions (NYSE:ULS) provides testing, inspection, and certification services that help companies ensure their products meet safety, security, and sustainability standards.
UL Solutions reported revenues of $739 million, up 8% year on year. This print exceeded analysts’ expectations by 1.9%. Overall, it was an exceptional quarter for the company with an impressive beat of analysts’ EPS estimates.
UL Solutions Total Revenue
Interestingly, the stock is up 3.8% since reporting and currently trades at $57.65.
Operating from over 100 locations across the U.S. and internationally, NV5 Global (NASDAQ:NVEE) provides engineering, environmental, geospatial, and technical consulting services to public and private sector clients for infrastructure and building projects.
NV5 Global reported revenues of $246.5 million, up 14.7% year on year, outperforming analysts’ expectations by 1.6%. The business had a very strong quarter with a solid beat of analysts’ full-year EPS guidance estimates and full-year revenue guidance exceeding analysts’ expectations.
NV5 Global Total Revenue
NV5 Global pulled off the fastest revenue growth and highest full-year guidance raise among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 7% since reporting. It currently trades at $16.20.
With roots dating back to 1914 and deep ties to nearly all U.S. cabinet-level departments, Booz Allen Hamilton (NYSE:BAH) provides management consulting, technology services, and cybersecurity solutions primarily to U.S. government agencies and military branches.
Booz Allen Hamilton reported revenues of $2.92 billion, up 13.5% year on year, exceeding analysts’ expectations by 1.7%. It may have had the worst quarter among its peers, but its results were still good as it also locked in an impressive beat of analysts’ organic revenue estimates and a decent beat of analysts’ EPS estimates.
As expected, the stock is down 7.3% since the results and currently trades at $119.59.
Operating at the intersection of policy, technology, and implementation for over five decades, ICF International (NASDAQ:ICFI) provides professional consulting services and technology solutions to government agencies and commercial clients across energy, health, environment, and security sectors.
ICF International reported revenues of $496.3 million, up 3.8% year on year. This number met analysts’ expectations. Overall, it was a very strong quarter as it also logged revenue guidance for next quarter exceeding analysts’ expectations and a narrow beat of analysts’ EPS estimates.
ICF International had the weakest performance against analyst estimates among its peers. The stock is down 14.1% since reporting and currently trades at $85.88.
With over five decades of experience supporting national security missions, Science Applications International Corporation (NASDAQ:SAIC) provides technical, engineering, and enterprise IT services primarily to U.S. government agencies and military branches.
SAIC reported revenues of $1.84 billion, up 5.8% year on year. This result topped analysts’ expectations by 1.4%. It was a very strong quarter as it also produced a solid beat of analysts’ EPS estimates and a narrow beat of analysts’ full-year EPS guidance estimates.
The stock is up 16.1% since reporting and currently trades at $121.27.
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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