Let’s dig into the relative performance of Exponent (NASDAQ:EXPO) and its peers as we unravel the now-completed Q3 business process outsourcing & consulting earnings season.
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 Q3. As a group, revenues beat analysts’ consensus estimates by 1.8% while next quarter’s revenue guidance was in line.
In light of this news, share prices of the companies have held steady as they are up 3.8% on average 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 $137.1 million, up 9.6% year on year. This print exceeded analysts’ expectations by 4%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.
“Exponent delivered a strong third quarter, achieving double digit net revenue growth that reflects the strength of our diversified portfolio and our ability to deliver value across industries,” stated Dr. Catherine Corrigan, President and Chief Executive Officer.
Exponent scored the biggest analyst estimates beat of the whole group. Unsurprisingly, the stock is up 6.8% since reporting and currently trades at $71.35.
Is now the time to buy Exponent? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q3: 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 $185.9 million, up 10.8% year on year, outperforming analysts’ expectations by 3.6%. The business had an exceptional quarter with a beat of analysts’ EPS estimates and a solid beat of analysts’ revenue estimates.
The market seems happy with the results as the stock is up 10.5% since reporting. It currently trades at $196.33.
Is now the time to buy CRA? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: 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 slower quarter as it posted a significant miss of analysts’ full-year EPS guidance estimates and a significant miss of analysts’ EPS guidance for next quarter estimates.
As expected, the stock is down 29.6% since the results and currently trades at $38.74.
Read our full analysis of Concentrix’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 $298.7 million, up 17% year on year. This result beat analysts’ expectations by 2.4%. Zooming out, it was a satisfactory quarter as it also produced a beat of analysts’ EPS estimates but revenue guidance for next quarter slightly missing analysts’ expectations.
The stock is down 1.6% since reporting and currently trades at $12.29.
Read our full, actionable report on TaskUs here, it’s free for active Edge members.
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 $693.8 million, up 58.1% year on year. This print came in 2.2% below analysts' expectations. Taking a step back, it was a satisfactory quarter as it also logged a beat of analysts’ EPS estimates but a significant miss of analysts’ revenue estimates.
CBIZ scored the fastest revenue growth and highest full-year guidance raise, but had the weakest performance against analyst estimates among its peers. The stock is up 2.4% since reporting and currently trades at $51.49.
Read our full, actionable report on CBIZ 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.
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