Here's Why Investors Should Hold on to Acxiom (ACXM) Stock
There are some companies that put in sustained efforts to stay ahead of the curve even in the face of intense competitive pressure. Acxiom Corporation ACXM is one such company that has been continuously growing through acquisitions and partnerships. Though the stock faces a few headwinds at the moment, these are transitory in nature. There is enough scope for this Zacks Rank #3 (Hold) company to rebound in the long run.
Shares of Acxiom have gained 11.1% in the past three months, slightly outperforming the industry’s rally of 8.8%.
The company’s robust segment performance, strategic partnerships and expanding customer base are key catalysts.
Positive Earnings Surprise History
Acxiom has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in three out of the trailing four quarters, recording a positive average earnings surprise of 28.5%.
Further, the company has a long-term expected EPS growth rate of 15%.
Strategic Partnerships and Expanding Customer Base
Acxiom has emerged as a formidable player in the field of marketing services and technology. The company is including the latest digital platforms in its InfoBase platform to increase the accessibility of its products through various digital channels. These products provide Acxiom with a competitive edge in the industry, thereby aiding expansion of its customer base.
The company announced a strategic partnership with technology firm Adobe Systems Inc. to provide an integrated marketing program for clients. It will ultimately help the company offer Adobe Marketing Cloud to its customers for seamless cross-channel marketing campaigns.
Additionally, the company has partnered with social media firm Twitter Inc. to aid advertisers gauge the efficacy of advertising campaigns on offline sales.
Acxiom’s frequent product innovations like AbiliTecand and partnership with 4INFO—to provide location-based targeting segments for digital campaigns—are helping the company expand its customer base, thereby boosting its top line.
Factors to Watch Out For
With low barriers to entry, the industry has become more complex and highly competitive. Such high level of competition can lead to unwanted price cuts, higher advertising expenses and changes in marketing mix and affect the company’s revenues and margins.
Financial sector services form a significant portion of Acxiom’s revenues and any slowdown or can have an adverse impact on the company’s overall performance.
Zacks Rank &Stock to Consider
A few better-ranked stocks in the broader technology sector are Broadcom Limited AVGO, NVIDIA Corporation NVDA and Western Digital Corporation WDC. These stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Broadcom, NVIDIA and Western Digital have a long-term expected EPS growth rate of 13.75%, 10.25% and 25.06% respectively.
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