As the Q4 earnings season wraps, let’s dig into this quarter’s best and worst performers in the data & business process services industry, including SS&C (NASDAQ:SSNC) and its peers.
A combination of increasing reliance on data and analytics across various industries and the desire for cost efficiency through outsourcing could mean that companies in this space gain. As functions such as payroll, HR, and credit risk assessment rely on more digitization, key players in the data & business process services industry could be increased demand. On the other hand, the sector faces headwinds from growing regulatory scrutiny on data privacy and security, with laws like GDPR and evolving U.S. regulations potentially limiting data collection and monetization strategies. Additionally, rising cyber threats pose risks to firms handling sensitive personal and financial information, creating outsized headline risk when things go wrong in this area.
The 11 data & business process services stocks we track reported a mixed Q4. As a group, revenues along with next quarter’s revenue guidance were in line with analysts’ consensus estimates.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 15.8% since the latest earnings results.
SS&C (NASDAQ:SSNC)
Founded in 1986 as a bridge between technology and financial services, SS&C Technologies (NASDAQ:SSNC) provides software and software-enabled services that help financial firms and healthcare organizations automate complex business processes.
SS&C reported revenues of $1.53 billion, up 8.3% year on year. This print exceeded analysts’ expectations by 3.2%. Overall, it was a strong quarter for the company with a solid beat of analysts’ EPS and billings estimates.
SS&C Total Revenue
SS&C scored the biggest analyst estimates beat of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 18.7% since reporting and currently trades at $66.50.
Powering billions of critical customer interactions annually, CSG Systems (NASDAQ:CSGS) provides cloud-based software platforms that help companies manage customer interactions, process payments, and monetize their services.
CSG reported revenues of $316.7 million, up 6.5% year on year, in line with analysts’ expectations. The business had an exceptional quarter with an impressive beat of analysts’ EPS estimates and full-year revenue guidance exceeding analysts’ expectations.
CSG Total Revenue
CSG pulled off the highest full-year guidance raise among its peers. The stock is down 11.4% since reporting. It currently trades at $53.93.
Known for its proprietary D-U-N-S Number that serves as a unique identifier for businesses worldwide, Dun & Bradstreet (NYSE:DNB) provides business decisioning data and analytics that help companies evaluate credit risks, verify suppliers, enhance sales productivity, and gain market visibility.
Dun & Bradstreet reported revenues of $631.9 million, flat year on year, falling short of analysts’ expectations by 4%. It was a disappointing quarter as it posted a significant miss of analysts’ full-year EPS guidance estimates.
Dun & Bradstreet delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 17.8% since the results and currently trades at $8.63.
Processing over 2.8 billion insurance transaction records annually through one of the world's largest private databases, Verisk Analytics (NASDAQ:VRSK) provides data, analytics, and technology solutions that help insurance companies assess risk, detect fraud, and make better business decisions.
Verisk reported revenues of $735.6 million, up 8.6% year on year. This number met analysts’ expectations. More broadly, it was a slower quarter as it logged a significant miss of analysts’ full-year EPS guidance estimates and full-year revenue guidance slightly missing analysts’ expectations.
The stock is down 6.7% since reporting and currently trades at $279.16.
One of the three major credit bureaus in the United States alongside Equifax and Experian, TransUnion (NYSE:TRU) is a global information and insights company that provides credit reports, fraud prevention tools, and data analytics to help businesses make decisions and consumers manage their financial health.
TransUnion reported revenues of $1.04 billion, up 8.6% year on year. This result beat analysts’ expectations by 1%. Aside from that, it was a softer quarter with sales and EPS guidance for the full year below analysts' expectations.
The stock is down 30.5% since reporting and currently trades at $65.
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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