The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Concentrix (NASDAQ:CNXC) and the rest of the business process outsourcing & consulting stocks fared in Q2.
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 7 business process outsourcing & consulting stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 1.2% 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 1% on average since the latest earnings results.
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 $2.42 billion, up 1.5% year on year. This print exceeded analysts’ expectations by 1.2%. Despite the top-line beat, it was still a mixed quarter for the company with full-year revenue guidance slightly topping analysts’ expectations but a significant miss of analysts’ EPS estimates.
“In the second quarter, we continued to outperform expectations on revenue growth despite some mid-quarter volatility,” said Chris Caldwell, President and CEO of Concentrix.
Unsurprisingly, the stock is down 5.2% since reporting and currently trades at $52.28.
Is now the time to buy Concentrix? Access our full analysis of the earnings results here, it’s free.
Best Q2: 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 $168.64.
Is now the time to buy FTI Consulting? Access our full analysis of the earnings results 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, exceeding analysts’ expectations by 1.5%. Still, it was a mixed quarter as it posted revenue guidance for next quarter slightly missing analysts’ expectations.
Interestingly, the stock is up 3.1% since the results and currently trades at $71.09.
Read our full analysis of Exponent’s results here.
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%. Overall, it was a strong quarter as it also put up full-year revenue guidance topping analysts’ expectations and a beat of analysts’ EPS estimates.
CRA pulled off the biggest analyst estimates beat among its peers. The stock is up 11.8% since reporting and currently trades at $193.76.
Read our full, actionable report on CRA here, it’s free.
Genpact (NYSE:G)
Originally spun off from General Electric in 2005 to provide business process services, Genpact (NYSE:G) is a global professional services firm that helps businesses transform their operations through digital technology, AI, and data analytics solutions.
Genpact reported revenues of $1.25 billion, up 6.6% year on year. This number surpassed analysts’ expectations by 1.9%. It was a strong quarter as it also logged a solid beat of analysts’ constant currency revenue estimates and a decent beat of analysts’ EPS guidance for next quarter estimates.
Genpact had the weakest full-year guidance update among its peers. The stock is up 8.7% since reporting and currently trades at $45.34.
Read our full, actionable report on Genpact here, it’s free.
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.