As the Q1 earnings season wraps, let’s dig into this quarter’s best and worst performers in the data & business process services industry, including Broadridge (NYSE:BR) 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 10 data & business process services stocks we track reported a mixed Q1. As a group, revenues beat analysts’ consensus estimates by 0.7% while next quarter’s revenue guidance was in line.
In light of this news, share prices of the companies have held steady as they are up 4.9% on average since the latest earnings results.
Weakest Q1: Broadridge (NYSE:BR)
Processing over $10 trillion in equity and fixed income trades daily and managing proxy voting for over 800 million equity positions, Broadridge Financial Solutions (NYSE:BR) provides technology-driven solutions that power investing, governance, and communications for banks, broker-dealers, asset managers, and public companies.
Broadridge reported revenues of $1.81 billion, up 4.9% year on year. This print fell short of analysts’ expectations by 2.5%. Overall, it was a slower quarter for the company with some shareholders anticipating a better outcome.
"Broadridge delivered strong third quarter results, including 8% Recurring revenue growth constant currency and 9% Adjusted EPS growth," said Tim Gokey, Broadridge CEO.
Broadridge delivered the weakest performance against analyst estimates of the whole group. The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $244.01.
Is now the time to buy Broadridge? Access our full analysis of the earnings results here, it’s free.
Best Q1: CSG (NASDAQ:CSGS)
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 $299.5 million, up 1.5% year on year, outperforming analysts’ expectations by 1.4%. The business had an exceptional quarter with full-year revenue guidance exceeding analysts’ expectations and a solid beat of analysts’ EPS estimates.
CSG scored 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 $61.23.
Is now the time to buy CSG? Access our full analysis of the earnings results here, it’s free.
TransUnion (NYSE:TRU)
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 $1.10 billion, up 7.3% year on year, exceeding analysts’ expectations by 2.3%. Still, it was a slower quarter as it posted a miss of analysts’ full-year EPS guidance estimates.
Interestingly, the stock is up 10.3% since the results and currently trades at $85.20.
Read our full analysis of TransUnion’s results here.
Verisk (NASDAQ:VRSK)
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 $753 million, up 7% year on year. This number met analysts’ expectations. Taking a step back, it was a mixed quarter as it also logged a narrow beat of analysts’ constant currency revenue estimates but a slight miss of analysts’ full-year EPS guidance estimates.
The stock is up 7.2% since reporting and currently trades at $317.52.
Read our full, actionable report on Verisk here, it’s free.
Equifax (NYSE:EFX)
Holding detailed financial records on over 800 million consumers worldwide and dating back to 1899, Equifax (NYSE:EFX) is a global data analytics company that collects, analyzes, and sells consumer and business credit information to lenders, employers, and other businesses.
Equifax reported revenues of $1.44 billion, up 3.8% year on year. This result surpassed analysts’ expectations by 1.7%. Aside from that, it was a satisfactory quarter as it also recorded an impressive beat of analysts’ EPS estimates but revenue guidance for next quarter meeting analysts’ expectations.
The stock is up 22.5% since reporting and currently trades at $263.47.
Read our full, actionable report on Equifax here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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