As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q4. Today, we are looking at business process outsourcing & consulting stocks, starting with Exponent (NASDAQ: EXPO).
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 mixed Q4. As a group, revenues along with next quarter’s revenue guidance were in line with analysts’ consensus estimates.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 6% since the latest earnings results.
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 $123.8 million, up 8.7% year on year. This print exceeded analysts’ expectations by 3.5%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ EPS estimates.
The stock is down 11.6% since reporting and currently trades at $79.33.
Is now the time to buy Exponent? Access our full analysis of the earnings results here, it’s free.
Best Q4: CRA (NASDAQ: CRAI)
Often retained for high-stakes matters with multibillion-dollar implications, CRA International (NASDAQ: CRAI) provides economic, financial, and management consulting services to corporations, law firms, and government agencies for litigation, regulatory proceedings, and business strategy.
CRA reported revenues of $176.4 million, up 9.2% year on year, outperforming analysts’ expectations by 5.8%. The business had a stunning quarter with an impressive beat of analysts’ EPS estimates and full-year revenue guidance beating analysts’ expectations.
CRA scored the biggest analyst estimates beat and highest full-year guidance raise among its peers. The stock is down 12.3% since reporting. It currently trades at $165.33.
Is now the time to buy CRA? Access our full analysis of the earnings results here, it’s free.
Weakest 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 $894.9 million, down 3.2% year on year, falling short of analysts’ expectations by 2.1%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations.
FTI Consulting delivered the slowest revenue growth in the group. As expected, the stock is down 13.3% since the results and currently trades at $164.91.
Read our full analysis of FTI Consulting’s results here.
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 topped analysts’ expectations by 2%. Taking a step back, it was a slower quarter as it produced a significant miss of analysts’ EPS estimates.
The stock is down 17.6% since reporting and currently trades at $12.87.
Read our full, actionable report on TaskUs here, it’s free.
Huron (NASDAQ: HURN)
Founded in 2002 during a time of significant regulatory change in corporate America, Huron Consulting Group (NASDAQ: HURN) is a professional services company that helps organizations develop growth strategies, optimize operations, and implement digital transformation solutions.
Huron reported revenues of $399.3 million, up 14.1% year on year. This number beat analysts’ expectations by 1.7%. It was a very strong quarter as it also recorded a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ full-year EPS guidance estimates.
The stock is up 13.5% since reporting and currently trades at $142.24.
Read our full, actionable report on Huron here, it’s free.
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.
Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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