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 EXL (NASDAQ: EXLS) 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 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 7.9% on average since the latest earnings results.
EXL (NASDAQ: EXLS)
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 print exceeded analysts’ expectations by 2%. Overall, it was a satisfactory quarter for the company with a solid beat of analysts’ EPS estimates but a slight miss of analysts’ full-year EPS guidance estimates.
Chairman and Chief Executive Officer Rohit Kapoor said, “We are pleased with our first quarter results and strong start to the year, as we delivered revenue and adjusted diluted EPS growth of 15% and 27% respectively. Our strong business momentum underscores the successful execution of our differentiated data and AI-led strategy and demonstrates the enduring resilience and adaptability of EXL’s business model.”
EXL pulled off the fastest revenue growth of the whole group. Unsurprisingly, the stock is up 5% since reporting and currently trades at $47.25.
Is now the time to buy EXL? 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 2.9% since reporting. It currently trades at $63.07.
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 2% since the results and currently trades at $237.18.
Read our full analysis of Broadridge’s results here.
Equifax (NYSE: EFX)
Holding detailed financial records on over 800 million consumers worldwide and dating back to 1899, Equifax (NYSE: EFX) is a global data analytics company that collects, analyzes, and sells consumer and business credit information to lenders, employers, and other businesses.
Equifax reported revenues of $1.44 billion, up 3.8% year on year. This print surpassed analysts’ expectations by 1.7%. Aside from that, it was a satisfactory quarter as it also produced an impressive beat of analysts’ EPS estimates.
The stock is up 27% since reporting and currently trades at $273.10.
Read our full, actionable report on Equifax here, it’s free.
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 result was in line with analysts’ expectations. It was a strong quarter as it also put up a decent beat of analysts’ EPS estimates.
The stock is flat since reporting and currently trades at $9.04.
Read our full, actionable report on Dun & Bradstreet here, it’s free.
Market Update
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.
Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
