Let’s dig into the relative performance of Accenture (NYSE: ACN) and its peers as we unravel the now-completed Q4 it services & consulting earnings season.
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 16.4% since the latest earnings results.
Accenture (NYSE: ACN)
With a workforce of approximately 774,000 people serving clients in more than 120 countries, Accenture (NYSE: ACN) is a professional services firm that helps organizations transform their businesses through consulting, technology, operations, and digital services.
Accenture reported revenues of $17.69 billion, up 9% year on year. This print exceeded analysts’ expectations by 3.2%. Overall, it was a very strong quarter for the company with a decent beat of analysts’ EPS estimates.
The stock is down 10.1% since reporting and currently trades at $312.15.
Is now the time to buy Accenture? 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 delivered 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 18.2% since reporting. It currently trades at $16.77.
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 slower quarter with EPS guidance for the next quarter below analysts' estimates.
ASGN delivered the slowest revenue growth in the group. As expected, the stock is down 27.1% since the results and currently trades at $64.07.
Read our full analysis of ASGN’s results here.
EPAM (NYSE: EPAM)
Founded in 1993 during the early days of offshore software development, EPAM Systems (NYSE: EPAM) provides digital engineering, cloud, and AI transformation services to help global enterprises and startups modernize their technology systems and create digital products.
EPAM reported revenues of $1.25 billion, up 7.9% year on year. This print beat analysts’ expectations by 3.2%. Zooming out, it was a slower quarter with underwhelming EPS guidance for the next quarter.
The stock is down 31.7% since reporting and currently trades at $176.61.
Read our full, actionable report on EPAM here, it’s free.
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 result came in 2% below analysts' expectations. In spite of that, it was a very strong quarter as it put up an impressive 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 9.5% since reporting and currently trades at $34.29.
Read our full, actionable report on Kyndryl here, it’s free.
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