The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Dun & Bradstreet (NYSE:DNB) and the rest of the data & business process services stocks fared in Q1.
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 4.1% on average since the latest earnings results.
Dun & Bradstreet (NYSE:DNB)
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 $579.8 million, up 2.7% year on year. This print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with a decent beat of analysts’ EPS estimates.
“We are pleased with our solid start to the year as we delivered 3.6% organic revenue growth, expanded our Adjusted EBITDA margin by 70 basis points, grew adjusted Net Earnings by 6.9%, generated strong cash flow conversion and reduced our net leverage ratio to 3.5 times. We continued to see strong demand for both our Finance & Risk and Sales & Marketing solutions in both North America and International,” said Anthony Jabbour, Dun & Bradstreet Chief Executive Officer.
Dun & Bradstreet Total Revenue
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $8.97.
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 an impressive beat of analysts’ EPS estimates.
CSG Total Revenue
CSG achieved the highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 6.4% since reporting. It currently trades at $65.21.
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, falling short of analysts’ expectations by 2.5%. It was a slower quarter, leaving some shareholders looking for more.
Broadridge delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 2.5% since the results and currently trades at $236.
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 $5.55 billion, up 5.7% year on year. This result beat analysts’ expectations by 0.8%. Overall, it was a satisfactory quarter as it also recorded a decent beat of analysts’ EPS estimates.
The stock is up 3.5% since reporting and currently trades at $306.16.
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 $501 million, up 14.8% year on year. This number topped analysts’ expectations by 2%. Aside from that, it was a satisfactory quarter as it also logged a solid beat of analysts’ EPS estimates.
EXL scored the fastest revenue growth among its peers. The stock is flat since reporting and currently trades at $45.30.
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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