Looking back on data & business process services stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including ADP (NASDAQ:ADP) and its peers.
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 satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 2.5% while next quarter’s revenue guidance was 0.6% below.
Thankfully, share prices of the companies have been resilient as they are up 7.1% 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 $5.13 billion, up 7.5% year on year. This print exceeded analysts’ expectations by 1.9%. Despite the top-line beat, it was still a mixed quarter for the company with a beat of analysts’ EPS estimates but revenue guidance for next quarter meeting analysts’ expectations.
Unsurprisingly, the stock is down 6.3% since reporting and currently trades at $289.51.
Is now the time to buy ADP? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q2: 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 $73.39 million, up 20.1% year on year, outperforming analysts’ expectations by 11.2%. The business had an exceptional quarter with a beat of analysts’ EPS estimates and full-year revenue guidance exceeding analysts’ expectations.
Planet Labs scored the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 125% since reporting. It currently trades at $14.73.
Is now the time to buy Planet Labs? Access our full analysis of the earnings results here, it’s free for active Edge members.
Slowest Q2: 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 $2.07 billion, up 6.2% year on year, in line with analysts’ expectations. It was a slower quarter as it posted revenue guidance for next quarter meeting analysts’ expectations.
As expected, the stock is down 5% since the results and currently trades at $236.
Read our full analysis of Broadridge’s results here.
SS&C (NASDAQ:SSNC)
Founded in 1986 as a bridge between technology and financial services, SS&C Technologies (NASDAQ:SSNC) provides software and software-enabled services that help financial firms and healthcare organizations automate complex business processes.
SS&C reported revenues of $1.54 billion, up 5.9% year on year. This number topped analysts’ expectations by 1.5%. Overall, it was a satisfactory quarter as it also logged a decent beat of analysts’ full-year EPS guidance estimates.
The stock is up 4.4% since reporting and currently trades at $87.32.
Read our full, actionable report on SS&C here, it’s free for active Edge members.
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 $1.14 billion, up 9.5% year on year. This result surpassed analysts’ expectations by 3.7%. Taking a step back, it was a mixed quarter as it also produced a beat of analysts’ EPS estimates but full-year EPS guidance in line with analysts’ estimates.
The stock is down 18.5% since reporting and currently trades at $77.
Read our full, actionable report on TransUnion here, it’s free for active Edge members.
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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