Let’s dig into the relative performance of TransUnion (NYSE: TRU) and its peers as we unravel the now-completed Q4 data & business process services earnings season.
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.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 9.3% since the latest earnings results.
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 $1.04 billion, up 8.6% year on year. This print exceeded analysts’ expectations by 1%. Despite the top-line beat, it was still a softer quarter for the company with EPS guidance for the next quarter missing analysts' estimates.
The stock is down 21.7% since reporting and currently trades at $73.19.
Read our full report on TransUnion here, it’s free.
Best Q4: 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 $316.7 million, up 6.5% year on year, in line with analysts’ expectations. The business had an exceptional quarter with an impressive beat of analysts’ EPS estimates and full-year revenue guidance exceeding analysts’ expectations.
CSG achieved 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.
Is now the time to buy CSG? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: 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 $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 16.7% since the results and currently trades at $8.75.
Read our full analysis of Dun & Bradstreet’s results here.
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 result topped analysts’ expectations by 1.7%. Overall, it was a very strong quarter as it also recorded revenue guidance for next quarter beating analysts’ expectations and a decent beat of analysts’ EPS estimates.
The stock is down 5.2% since reporting and currently trades at $282.69.
Read our full, actionable report on ADP here, it’s free.
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 $709.4 million, up 10.8% year on year. This print surpassed analysts’ expectations by 0.9%. It was an exceptional quarter as it also logged an impressive beat of analysts’ EPS estimates.
The stock is up 1.6% since reporting and currently trades at $76.71.
Read our full, actionable report on CoStar 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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