Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at ADP (NASDAQ: ADP) and the best and worst performers in the data & business process services industry.

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.

Thankfully, share prices of the companies have been resilient as they are up 5.4% on average since the latest earnings results.

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 $5.55 billion, up 5.7% year on year. This print exceeded analysts’ expectations by 0.8%. Overall, it was a satisfactory quarter for the company with a decent beat of analysts’ EPS estimates.

Interestingly, the stock is up 4.2% since reporting and currently trades at $308.10.

Is now the time to buy ADP? 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 an impressive beat of analysts’ EPS estimates.

CSG scored the highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 6% since reporting. It currently trades at $65.

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. As expected, the stock is down 1.9% since the results and currently trades at $237.49.

Read our full analysis of Broadridge’s results here.

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. This print beat analysts’ expectations by 2.3%. Taking a step back, it was a slower quarter as it logged a miss of analysts’ full-year EPS guidance estimates.

TransUnion pulled off the biggest analyst estimates beat among its peers. The stock is up 17.3% since reporting and currently trades at $90.63.

Read our full, actionable report on TransUnion 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 $732.2 million, up 11.5% year on year. This number met analysts’ expectations. Overall, it was a strong quarter as it also recorded a solid beat of analysts’ EPS estimates and revenue guidance for next quarter meeting analysts’ expectations.

CoStar had the weakest full-year guidance update among its peers. The stock is down 7.1% since reporting and currently trades at $76.74.

Read our full, actionable report on CoStar 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.

Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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