As the Q4 earnings season wraps, let’s dig into this quarter’s best and worst performers in the business process outsourcing & consulting industry, including TaskUs (NASDAQ:TASK) and its peers.
The sector stands to benefit from ongoing digital transformation, increasing corporate demand for cost efficiencies, and the growing complexity of regulatory and cybersecurity landscapes. For those that invest wisely, AI and automation capabilities could emerge as competitive advantages, enhancing process efficiencies for the companies themselves as well as their clients. On the flip side, AI could be a headwind as well as the technology could lower the barrier to entry in the space and give rise to more self-service solutions. Additional challenges in the years ahead could include wage inflation for highly skilled consultants and potential regulatory scrutiny on outsourcing practices—especially in industries like finance and healthcare where who has access to certain data matters greatly.
The 8 business process outsourcing & consulting stocks we track reported a mixed Q4. As a group, revenues beat analysts’ consensus estimates by 0.7% while next quarter’s revenue guidance was in line.
While some business process outsourcing & consulting stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.1% since the latest earnings results.
TaskUs (NASDAQ:TASK)
Starting as a virtual assistant service in 2008 before evolving into a global digital services provider, TaskUs (NASDAQ:TASK) provides outsourced digital services including customer experience management, content moderation, and AI data services to innovative technology companies.
TaskUs reported revenues of $274.2 million, up 17.1% year on year. This print exceeded analysts’ expectations by 2%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts’ EPS estimates.
TaskUs achieved the highest full-year guidance raise of the whole group. Unsurprisingly, the stock is up 8.7% since reporting and currently trades at $16.98.
Read our full report on TaskUs here, it’s free.
Best Q4: CRA (NASDAQ:CRAI)
Often retained for high-stakes matters with multibillion-dollar implications, CRA International (NASDAQ:CRAI) provides economic, financial, and management consulting services to corporations, law firms, and government agencies for litigation, regulatory proceedings, and business strategy.
CRA reported revenues of $181.9 million, up 5.9% year on year, outperforming analysts’ expectations by 3%. The business had a very strong quarter with an impressive beat of analysts’ EPS estimates and full-year revenue guidance slightly topping analysts’ expectations.
CRA scored the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 8.7% since reporting. It currently trades at $175.18.
Is now the time to buy CRA? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: Genpact (NYSE:G)
Originally spun off from General Electric in 2005 to provide business process services, Genpact (NYSE:G) is a global professional services firm that helps businesses transform their operations through digital technology, AI, and data analytics solutions.
Genpact reported revenues of $1.21 billion, up 7.4% year on year, in line with analysts’ expectations. It was a slower quarter with revenue guidance for next quarter slightly missing analysts’ expectations.
Genpact delivered the weakest full-year guidance update in the group. As expected, the stock is down 8.6% since the results and currently trades at $45.27.
Read our full analysis of Genpact’s results here.
CBIZ (NYSE:CBZ)
With over 120 offices across 33 states and a team of more than 6,700 professionals, CBIZ (NYSE:CBZ) provides accounting, tax, benefits, insurance brokerage, and advisory services to help small and mid-sized businesses manage their finances and operations.
CBIZ reported revenues of $838 million, up 69.5% year on year. This number lagged analysts' expectations by 2.6%. It was a slower quarter as it also logged full-year revenue guidance missing analysts’ expectations.
CBIZ delivered the fastest revenue growth but had the weakest performance against analyst estimates among its peers. The stock is down 5.9% since reporting and currently trades at $72.68.
Read our full, actionable report on CBIZ here, it’s free.
Concentrix (NASDAQ:CNXC)
With a team of approximately 450,000 employees across 75 countries, Concentrix (NASDAQ:CNXC) designs and delivers customer experience solutions that help global brands manage their customer interactions across digital channels and contact centers.
Concentrix reported revenues of $2.42 billion, up 1.5% year on year. This result surpassed analysts’ expectations by 1.2%. Taking a step back, it was a mixed quarter as it also produced full-year revenue guidance slightly topping analysts’ expectations but a miss of analysts’ EPS estimates.
The stock is up 4.2% since reporting and currently trades at $57.47.
Read our full, actionable report on Concentrix here, it’s free.
Market Update
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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