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 Q1, starting with CoStar (NASDAQ: CSGP).
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 satisfactory Q1. As a group, revenues beat analysts’ consensus estimates by 1.3% while next quarter’s revenue guidance was in line.
Thankfully, share prices of the companies have been resilient as they are up 9.1% on average since the latest earnings results.
CoStar (NASDAQ: CSGP)
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 $732.2 million, up 11.5% year on year. This print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with an impressive beat of analysts’ EPS estimates and revenue guidance for next quarter meeting analysts’ expectations.
CoStar delivered the weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 1.9% since reporting and currently trades at $81.
Is now the time to buy CoStar? 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. The market seems content with the results as the stock is up 4.4% since reporting. It currently trades at $64.
Is now the time to buy CSG? Access our full analysis of the earnings results here, it’s free.
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, 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. The stock is flat since the results and currently trades at $241.80.
Read our full analysis of Broadridge’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 print was in line with analysts’ expectations. More broadly, it was a mixed quarter as it also recorded a narrow beat of analysts’ constant currency revenue estimates but a slight miss of analysts’ full-year EPS guidance estimates.
The stock is up 9.9% since reporting and currently trades at $325.42.
Read our full, actionable report on Verisk here, it’s free.
Planet Labs (NYSE: PL)
Pioneering the concept of "agile aerospace" with hundreds of small but powerful satellites, Planet Labs (NYSE: PL) operates the world's largest fleet of Earth observation satellites, capturing daily images of our planet to provide insights on deforestation, agriculture, and climate change.
Planet Labs reported revenues of $66.27 million, up 9.6% year on year. This result beat analysts’ expectations by 6.5%. Overall, it was a very strong quarter as it also recorded an impressive beat of analysts’ EPS estimates and full-year revenue guidance slightly topping analysts’ expectations.
Planet Labs achieved the biggest analyst estimates beat among its peers. The stock is up 38.4% since reporting and currently trades at $5.55.
Read our full, actionable report on Planet Labs here, it’s free.
Market Update
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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