As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the data & business process services industry, including TransUnion (NYSE: TRU) 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 0.7% below.
Thankfully, share prices of the companies have been resilient as they are up 9.6% on average 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 $1.14 billion, up 9.5% year on year. This print exceeded analysts’ expectations by 3.7%. Overall, it was a satisfactory quarter for the company with a solid beat of analysts’ revenue estimates but a miss of analysts’ EPS guidance for next quarter estimates.
“In the second quarter, TransUnion delivered strong results that again exceeded financial guidance,” said Chris Cartwright, President and CEO.
Unsurprisingly, the stock is down 18.7% since reporting and currently trades at $76.78.
Is now the time to buy TransUnion? 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 incredible quarter with a beat of analysts’ EPS and revenue estimates.
Planet Labs achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 147% since reporting. It currently trades at $16.15.
Is now the time to buy Planet Labs? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q2: 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 $1.54 billion, up 7.4% year on year, exceeding analysts’ expectations by 1.5%. Still, it was a slower quarter as it posted a miss of analysts’ full-year EPS guidance estimates.
As expected, the stock is down 6.5% since the results and currently trades at $242.90.
Read our full analysis of Equifax’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 $5.13 billion, up 7.5% year on year. This result surpassed analysts’ expectations by 1.9%. Zooming out, it was a mixed quarter as it also logged a decent beat of analysts’ revenue estimates.
The stock is down 5.3% since reporting and currently trades at $292.40.
Read our full, actionable report on ADP here, it’s free for active Edge members.
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 $781.3 million, up 15.3% year on year. This print beat analysts’ expectations by 1.2%. Taking a step back, it was a mixed quarter as it also produced a beat of analysts’ EPS estimates but a significant miss of analysts’ full-year EPS guidance estimates.
CoStar had the weakest full-year guidance update among its peers. The stock is down 5.2% since reporting and currently trades at $80.60.
Read our full, actionable report on CoStar here, it’s free for active Edge members.
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 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
