As the Q4 earnings season wraps, let’s dig into this quarter’s best and worst performers in the business process outsourcing & consulting industry, including TaskUs (NASDAQ:TASK) and its peers.
The sector stands to benefit from ongoing digital transformation, increasing corporate demand for cost efficiencies, and the growing complexity of regulatory and cybersecurity landscapes. For those that invest wisely, AI and automation capabilities could emerge as competitive advantages, enhancing process efficiencies for the companies themselves as well as their clients. On the flip side, AI could be a headwind as well as the technology could lower the barrier to entry in the space and give rise to more self-service solutions. Additional challenges in the years ahead could include wage inflation for highly skilled consultants and potential regulatory scrutiny on outsourcing practices—especially in industries like finance and healthcare where who has access to certain data matters greatly.
The 8 business process outsourcing & consulting stocks we track reported a satisfactory Q4. As a group, revenues beat analysts’ consensus estimates by 1.3% while next quarter’s revenue guidance was in line.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
Weakest Q4: TaskUs (NASDAQ:TASK)
Starting as a virtual assistant service in 2008 before evolving into a global digital services provider, TaskUs (NASDAQ:TASK) provides outsourced digital services including customer experience management, content moderation, and AI data services to innovative technology companies.
TaskUs reported revenues of $274.2 million, up 17.1% year on year. This print exceeded analysts’ expectations by 2%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts’ EPS estimates.
Interestingly, the stock is up 11% since reporting and currently trades at $17.34.
Read our full report on TaskUs here, it’s free.
Best Q4: FTI Consulting (NYSE:FCN)
With a team of experts deployed across 30+ countries to tackle complex business challenges, FTI Consulting (NYSE:FCN) is a global business advisory firm that helps organizations manage change, mitigate risk, and resolve disputes across financial, legal, operational, and regulatory matters.
FTI Consulting reported revenues of $943.7 million, flat year on year, outperforming analysts’ expectations by 3.4%. The business had a very strong quarter with a beat of analysts’ EPS estimates and full-year revenue guidance slightly topping analysts’ expectations.
However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $168.44.
Is now the time to buy FTI Consulting? Access our full analysis of the earnings results here, it’s free.
Concentrix (NASDAQ:CNXC)
With a team of approximately 450,000 employees across 75 countries, Concentrix (NASDAQ:CNXC) designs and delivers customer experience solutions that help global brands manage their customer interactions across digital channels and contact centers.
Concentrix reported revenues of $2.42 billion, up 1.5% year on year, exceeding analysts’ expectations by 1.2%. Still, it was a mixed quarter as it posted a significant miss of analysts’ EPS estimates.
As expected, the stock is down 10.1% since the results and currently trades at $49.58.
Read our full analysis of Concentrix’s results here.
CBIZ (NYSE:CBZ)
With over 120 offices across 33 states and a team of more than 6,700 professionals, CBIZ (NYSE:CBZ) provides accounting, tax, benefits, insurance brokerage, and advisory services to help small and mid-sized businesses manage their finances and operations.
CBIZ reported revenues of $683.5 million, up 62.7% year on year. This result came in 2.6% below analysts' expectations. Aside from that, it was a satisfactory quarter as it put up a beat of analysts’ EPS estimates.
CBIZ scored the fastest revenue growth but had the weakest performance against analyst estimates among its peers. The stock is down 16% since reporting and currently trades at $64.
Read our full, actionable report on CBIZ here, it’s free.
Exponent (NASDAQ:EXPO)
With a team of over 800 consultants holding advanced degrees in 90+ technical disciplines, Exponent (NASDAQ:EXPO) is a science and engineering consulting firm that investigates complex problems and provides expert analysis for clients across various industries.
Exponent reported revenues of $132.9 million, flat year on year. This number topped analysts’ expectations by 1.5%. More broadly, it was a mixed quarter as it also produced EPS in line with analysts’ estimates but revenue guidance for next quarter slightly missing analysts’ expectations.
The stock is up 1.6% since reporting and currently trades at $70.03.
Read our full, actionable report on Exponent 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.
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