Wrapping up Q4 earnings, we look at the numbers and key takeaways for the it services & consulting stocks, including Kyndryl (NYSE: KD) and its peers.
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 1% while next quarter’s revenue guidance was 0.8% above.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 28.9% since the latest earnings results.
Kyndryl (NYSE: KD)
Born from IBM's managed infrastructure services business in a 2021 spinoff, Kyndryl (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 print fell short of analysts’ expectations by 2%, but it was still a very strong quarter for the company with an impressive beat of analysts’ EPS estimates and revenue guidance for next quarter exceeding analysts’ expectations.
The stock is down 25.9% since reporting and currently trades at $28.11.
Is now the time to buy Kyndryl? Access our full analysis of the earnings results here, it’s free.
Best Q4: Grid Dynamics (NASDAQ: GDYN)
With engineering centers across the Americas, Europe, and India serving Fortune 1000 companies, Grid Dynamics (NASDAQ: GDYN) provides technology consulting, engineering, and analytics services to help large enterprises modernize their technology systems and business processes.
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 an impressive beat of analysts’ EPS estimates and full-year revenue guidance exceeding analysts’ expectations.
Grid Dynamics scored the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The stock is down 34.6% since reporting. It currently trades at $13.40.
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 high-end technology consulting powerhouse, ASGN (NYSE: ASGN) provides specialized IT consulting services and staffing solutions to Fortune 1000 companies and U.S. federal government agencies.
ASGN reported revenues of $985 million, down 8.3% year on year, falling short of analysts’ expectations by 1.5%. It was a mixed quarter as it posted a decent beat of analysts' EPS estimates.
ASGN delivered the slowest revenue growth in the group. As expected, the stock is down 33.5% since the results and currently trades at $58.43.
Read our full analysis of ASGN’s results here.
Gartner (NYSE: IT)
With over 2,500 research experts guiding organizations through complex technology landscapes, Gartner (NYSE: IT) provides research, advisory services, and conferences that help executives make better decisions about technology and other business priorities.
Gartner reported revenues of $1.72 billion, up 8.1% year on year. This result surpassed analysts’ expectations by 1.4%. It was an exceptional quarter as it also recorded a solid beat of analysts’ EPS estimates and a narrow beat of analysts’ constant currency revenue estimates.
The stock is down 31.2% since reporting and currently trades at $377.31.
Read our full, actionable report on Gartner here, it’s free.
DXC (NYSE: DXC)
Born from the 2017 merger of Computer Sciences Corporation and HP Enterprise's services business, DXC Technology (NYSE: DXC) is a global IT services company that helps businesses transform their technology infrastructure, applications, and operations.
DXC reported revenues of $3.23 billion, down 5.1% year on year. This print lagged analysts' expectations by 0.9%. Aside from that, it was a strong quarter as it produced a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ full-year EPS guidance estimates.
DXC had the weakest full-year guidance update among its peers. The stock is down 36.2% since reporting and currently trades at $14.42.
Read our full, actionable report on DXC here, it’s free.
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