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 data & business process services stocks fared in Q4, starting with ADP (NASDAQ:ADP).
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.
While some data & business process services stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 3.7% since the latest earnings results.
ADP (NASDAQ:ADP)
Processing one out of every six paychecks in the United States, ADP (NASDAQ:ADP) provides cloud-based human capital management solutions that help businesses manage payroll, benefits, talent acquisition, and HR administration.
ADP reported revenues of $5.05 billion, up 8.1% year on year. This print exceeded analysts’ expectations by 1.7%. Overall, it was a very strong quarter for the company with revenue guidance for next quarter beating analysts’ expectations and a decent beat of analysts’ EPS estimates.
ADP Total Revenue
The stock is up 2.8% since reporting and currently trades at $306.46.
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 a solid 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. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $60.44.
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 15% since the results and currently trades at $8.92.
Originally founded as an outsourcing company in 1999 before evolving into a technology-focused enterprise, EXL (NASDAQ:EXLS) provides data analytics and AI-powered digital operations solutions that help businesses transform their operations and make better decisions.
EXL reported revenues of $481.4 million, up 16.3% year on year. This number beat analysts’ expectations by 1.1%. Taking a step back, it was a slower quarter as it logged a miss of analysts’ full-year EPS guidance estimates.
EXL delivered the fastest revenue growth among its peers. The stock is down 3.2% since reporting and currently trades at $47.10.
With a research department that makes over 10,000 property updates daily to its 35-year-old database, CoStar Group (NASDAQ:CSGP) provides comprehensive real estate data, analytics, and online marketplaces for commercial and residential properties in the U.S. and U.K.
CoStar reported revenues of $709.4 million, up 10.8% year on year. This result topped analysts’ expectations by 0.9%. It was an exceptional quarter as it also recorded an impressive beat of analysts’ EPS estimates.
The stock is up 6.4% since reporting and currently trades at $80.29.
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