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 Gartner (NYSE:IT) and the rest of the it services & consulting stocks fared in Q4.
IT Services & Consulting companies stand to benefit from increasing enterprise demand for digital transformation, AI-driven automation, and cybersecurity resilience. Many enterprises can't attack these topics alone and need IT services and consulting on everything from technical advice to implementation. Challenges in meeting these needs will include finding talent in specialized and evolving IT fields. While AI and automation can enhance productivity, they also threaten to commoditize certain consulting functions. Another ongoing challenge will be pricing pressures from offshore IT service providers, which have lower labor costs and increasingly equal access to advanced technology like AI.
The 8 it services & consulting stocks we track reported a strong Q4. As a group, revenues beat analysts’ consensus estimates by 0.6% while next quarter’s revenue guidance was 0.6% above.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 15.2% since the latest earnings results.
Gartner (NYSE:IT)
Founded in 1979 as a technology research firm and now serving executives across all business functions, Gartner (NYSE:IT) is a research and advisory firm that provides actionable insights, guidance, and tools to help executives make better decisions about technology and business strategies.
Gartner reported revenues of $1.72 billion, up 8.1% year on year. This print exceeded analysts’ expectations by 1.4%. Overall, it was an exceptional quarter for the company with an impressive beat of analysts’ EPS estimates and a narrow beat of analysts’ constant currency revenue estimates.
The stock is down 17.3% since reporting and currently trades at $453.30.
Is now the time to buy Gartner? Access our full analysis of the earnings results here, it’s free.
Best Q4: Grid Dynamics (NASDAQ:GDYN)
Founded during the early days of cloud computing in 2006, Grid Dynamics (NASDAQ:GDYN) is a technology consulting firm that helps large enterprises modernize their operations through cloud computing, artificial intelligence, and digital engineering services.
Grid Dynamics reported revenues of $100.3 million, up 28.5% year on year, outperforming analysts’ expectations by 4.3%. The business had an exceptional quarter with a solid beat of analysts’ EPS estimates.
Grid Dynamics achieved the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 19.9% since reporting. It currently trades at $16.42.
Is now the time to buy Grid Dynamics? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: ASGN (NYSE:ASGN)
Evolving from its roots in IT staffing to become a comprehensive technology solutions provider, ASGN (NYSE:ASGN) provides IT consulting services and staffing solutions to Fortune 1000 companies and government agencies, specializing in digital transformation and technology implementation.
ASGN reported revenues of $985 million, down 8.3% year on year, falling short of analysts’ expectations by 1.5%. It was a slower quarter with EPS guidance for next quarter missing analysts' estimates.
ASGN delivered the slowest revenue growth in the group. As expected, the stock is down 23.3% since the results and currently trades at $67.38.
Read our full analysis of ASGN’s results here.
Kyndryl (NYSE:KD)
Born from IBM's managed infrastructure services business in a 2021 spinoff, Kyndryl Holdings (NYSE:KD) is the world's largest IT infrastructure services provider that designs, builds, and manages technology environments for enterprise customers.
Kyndryl reported revenues of $3.74 billion, down 4.9% year on year. This result came in 2% below analysts' expectations. More broadly, it was actually a very strong quarter as it produced a solid beat of analysts’ EPS estimates and revenue guidance for next quarter exceeding analysts’ expectations.
Kyndryl had the weakest performance against analyst estimates among its peers. The stock is down 7.7% since reporting and currently trades at $34.99.
Read our full, actionable report on Kyndryl here, it’s free.
IBM (NYSE:IBM)
Originally founded as Computing-Tabulating-Recording Co. in 1911 and nicknamed "Big Blue" for its corporate color, IBM (NYSE:IBM) provides hybrid cloud computing platforms, artificial intelligence solutions, consulting services, and enterprise infrastructure to businesses worldwide.
IBM reported revenues of $17.55 billion, flat year on year. This print was in line with analysts’ expectations. Zooming out, it was a mixed quarter as it also recorded a decent beat of analysts’ EPS estimates but a miss of analysts’ operating income estimates.
The stock is up 8% since reporting and currently trades at $246.81.
Read our full, actionable report on IBM here, it’s free.
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