Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at CBIZ (NYSE: CBZ) and the best and worst performers in the business process outsourcing & consulting industry.
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 strong Q2. As a group, revenues beat analysts’ consensus estimates by 2.1% while next quarter’s revenue guidance was in line.
While some business process outsourcing & consulting stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.6% since the latest earnings results.
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 print fell short of analysts’ expectations by 2.6%, but it was still a satisfactory quarter for the company with a beat of analysts’ EPS estimates.
“We’re pleased to deliver strong earnings in the second quarter and year-to-date demonstrating the strength and resilience of our business model amidst challenging market conditions,” said Jerry Grisko, CBIZ President and CEO.
CBIZ scored the fastest revenue growth but had the weakest performance against analyst estimates of the whole group. Even though it had a relatively good quarter, the market seems discontent with the results. The stock is down 2.8% since reporting and currently trades at $54.75.
Is now the time to buy CBIZ? Access our full analysis of the earnings results here, it’s free.
Best Q2: 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 $294.1 million, up 23.6% year on year, outperforming analysts’ expectations by 8.3%. The business had an incredible quarter with a beat of analysts’ EPS estimates.
TaskUs scored the biggest analyst estimates beat among its peers. The market seems content with the results as the stock is up 2.8% since reporting. It currently trades at $17.50.
Is now the time to buy TaskUs? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: 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 $2.48 billion, up 4% year on year, exceeding analysts’ expectations by 1%. Still, it was a softer quarter as it posted a significant miss of analysts’ EPS estimates.
Concentrix delivered the weakest full-year guidance update in the group. As expected, the stock is down 12.1% since the results and currently trades at $48.33.
Read our full analysis of Concentrix’s results here.
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. This result surpassed analysts’ expectations by 3.4%. Overall, it was a very strong quarter as it also logged a beat of analysts’ EPS estimates and full-year revenue guidance slightly topping analysts’ expectations.
FTI Consulting had the slowest revenue growth among its peers. The stock is down 3.9% since reporting and currently trades at $161.05.
Read our full, actionable report on FTI Consulting here, it’s free.
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 $186.9 million, up 9% year on year. This print topped analysts’ expectations by 3.6%. It was a strong quarter as it also produced full-year revenue guidance topping analysts’ expectations and a beat of analysts’ EPS estimates.
The stock is up 17% since reporting and currently trades at $202.78.
Read our full, actionable report on CRA 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.
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