For Immediate Release
Chicago, IL – January 12, 2023 – Today, Zacks Equity Research discusses Experian plc EXPGY, Verisk Analytics, Inc. VRSK and Intertek Group plc IKTSY.
Industry: Information Services
The increased adoption and success of the work-from-home trend is enabling the Zacks Business – Information Services industry to address the pandemic-induced rising demand for services that ensure risk mitigation, cost reduction and productivity improvement.
The heightening technology adoption is benefiting companies like Experian plc, Verisk Analytics, Inc. and Intertek Group plc, supporting them to offer digitally-transformed, personalized and value-added services.
About the Industry
The Zacks Business – Information Services industry comprises companies that offer a range of services, including software, data, risks, research, information and analytics solutions. These companies operate in a dynamic business environment characterized by evolving customer behavior, preference and demographics.
Amid the pandemic, the key focus within the industry is currently on channelizing money and efforts toward more effective operational components, such as technology, digital transformation and data-driven decision-making, in order to identify demand sources and target end markets. Prominent players include ratings, benchmarks, analytics, data provider, S&P Global and a provider of data-analytics solutions, Verisk Analytics.
4 Trends Shaping the Future of the Information Industry
Healthy Demand Environment: The industry is mature and has witnessed a progressively growing business environment in the past few years. Revenues, income and cash flows are likely to see healthy growth during the post-pandemic economic improvement.
Demand for Customer-Centric Solutions: The pandemic has stoked a many-fold increase in demand for specific solutions that ensure risk mitigation, cost reduction and productivity improvement. This, in turn, has opened up more business opportunities for industry players. These companies are now modifying their business strategies to offer more customer-centric solutions.
Digital Transformation is the Key: Companies focused on digital transformation are positioned to recover quickly post the global health crisis. This is because digital transformation substantially enhances operational efficiency, facilitates time to market and boosts a firm’s ability to quickly and efficiently meet customer expectations.
Increased Adoption of Technologies: Automation in assembling and the use of big data in enhancing business information will fuel the industry’s growth in the days to come. Companies are shifting from conventional data solutions to technical and domain-specific expertise, data analytics solutions, financial consultancy and operational consultancy services.
Zacks Industry Rank Indicates Bright Near-Term Prospects
The Business – Information Services industry is housed within the broader Zacks Business Services sector. It carries a Zacks Industry Rank #92, which places it in the top 37% of more than 250 Zacks industries.
The group’s Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates outperformance in the near term. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than two to one.
Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and current valuation.
Industry's Price Performance
Over the past year, the Zacks Business – Information Services industry, the S&P 500 composite and the Zacks Business Services sector haveplunged.
While the industry has declined 13.3%, the S&P 500 composite has declined 18.8% in the said time frame. The broader sector fell 25.8%.
Industry's Current Valuation
On the basis of the forward 12-month price-to-earnings (P/E), which is commonly used for valuing business information services stocks, the industry is currently trading at 24.21X compared with the S&P 500’s 17.33X and the sector’s 20.78.
Over the past five years, the industry has traded as high as 32.34X, as low as 19.91X and at the median of 25.83X.
3 Business Information Service Stocks to Consider
We are presenting three stocks that are well-positioned to grow in the near term.
Intertek: This quality assurance solutions provider is currently benefiting from acquisitions, investments and disciplined cost management. The company’s Assurance, Testing, Inspection and Certification (AITC) portfolio is benefiting from the fast-growing AITCC quality assurance market.
Intertek currently carries a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for fiscal 2023 EPS has been revised 2.7% upward in the past 60 days to $2.63. The stock has gained 26.7% in the past three months.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Experian: This provider of data services, analytical and decision tools is currently benefiting from acquisitions and strong new business performance. The company’s top line is benefiting from the company’s investments in new products.
Experian currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for fiscal 2023 EPS has been revised 0.7% upward in the past 60 days to $1.36. The stock has gained 20.5% in the past three months.
Verisk Analytics: Global data analytics solutions provider, Verisk has a robust growth strategy that focuses on organic growth, product development and acquisitions. This strategy has enabled the company’s revenues to witness a compound annual growth rate of 10.3% over the past five years.
The company continues to invest in people, data sets, analytic solutions, technology and complementary businesses to keep itself updated with changing requirements in the markets it serves. It is maintaining its focus on increasing solution penetration among customers and expanding into new customer sectors.
Verisk currently carries a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for 2023 EPS has been revised 0.5% upward in the past 60 days to $5.59. The stock has gained 9.2% in the past three months.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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