Let’s dig into the relative performance of EPAM (NYSE:EPAM) 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 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 14.5% since the latest earnings results.
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 exceeded analysts’ expectations by 3.2%. Despite the top-line beat, it was still a slower quarter for the company with EPS guidance for next quarter missing analysts’ expectations.
The stock is down 30.3% since reporting and currently trades at $180.26.
Read our full report on EPAM 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. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 18.1% since reporting. It currently trades at $16.79.
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 next quarter missing analysts’ expectations.
ASGN delivered the slowest revenue growth in the group. As expected, the stock is down 23.5% since the results and currently trades at $67.27.
Read our full analysis of ASGN’s results here.
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 number came in 0.9% below analysts' expectations. Taking a step back, it was still a strong quarter as it recorded a solid beat of analysts’ EPS estimates.
The stock is down 22.6% since reporting and currently trades at $17.49.
Read our full, actionable report on DXC here, it’s free.
IBM (NYSE:IBM)
With a corporate history spanning over a century and once known for its iconic mainframe computers, IBM (NYSE:IBM) provides hybrid cloud computing platforms, AI solutions, consulting services, and enterprise infrastructure to help businesses modernize their operations.
IBM reported revenues of $17.55 billion, flat year on year. This print met 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 8.3% since reporting and currently trades at $247.57.
Read our full, actionable report on IBM here, it’s free.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
Join Paid Stock Investor Research
Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.