A New Driver of Performance and Valuation

Investors and equity analysts believe data and analytics will have a substantive and often dramatic impact in the next several years on the companies and sectors they cover D&A will alter the competitive landscape—rewarding some companies and punishing others— especially in the longer term “Across all industries, there’s no escaping it,” says a buy sider focused on the technology industry In response, investors and analysts anticipate that companies’ strategic use of data and analytics will play a greater role in both investment decision making and valuation

The topline findings of this study, based on input from more than 250 investors and sell- side analysts, include the following:

Data and analytics will reshape industries.

• The use of data and analytics by issuers (publicly traded companies) has already begun to alter the competitive dynamics of nearly all industries, and this impact is expected to increase dramatically in the coming years The vast majority (82%) of investors and equity analysts participating in this study expects some level of disruption from D&A during the next three years in the sectors they cover
• As part of this disruption, investors and analysts believe that D&A strategies will improve company performance and bring higher valuations According to a majority (52%) of all respondents, D&A strategies have already begun to deliver better business performance or will do so in the next two years And one-third believe that D&A strategies have begun to reward companies with higher valuations or will do so during this period

D&A’s greatest potential lies in improving operations.

• Investors and analysts expect D&A to enable companies across sectors to achieve various broad business objectives over the next two years
• Their highest expectation is, however, for D&A as a source of companies’ improved operating performance (i e , increased profitability) over the next two years, followed by companies’ expansion of current lines of business, risk management, and finally expansion into new products and business models

Get the closer look from this research conducted by KPMG!