As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at it services & consulting stocks, starting with Grid Dynamics (NASDAQ: GDYN).
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 mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1.3% while next quarter’s revenue guidance was 0.6% below.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 10.5% since the latest earnings results.
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 $101.1 million, up 21.7% year on year. This print exceeded analysts’ expectations by 0.5%. Overall, it was a strong quarter for the company with full-year revenue guidance topping analysts’ expectations and EPS in line with analysts’ estimates.
Grid Dynamics scored the fastest revenue growth but had the weakest full-year guidance update of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 13.2% since reporting and currently trades at $8.24.
Is now the time to buy Grid Dynamics? Access our full analysis of the earnings results here, it’s free.
Best Q2: 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 $1.35 billion, up 18% year on year, outperforming analysts’ expectations by 1.5%. The business had a strong quarter with an impressive beat of analysts’ EPS guidance for next quarter estimates and a solid beat of analysts’ constant currency revenue estimates.
The market seems happy with the results as the stock is up 5.2% since reporting. It currently trades at $159.40.
Is now the time to buy EPAM? Access our full analysis of the earnings results here, it’s free.
Slowest Q2: 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 $1.02 billion, down 1.4% year on year, exceeding analysts’ expectations by 2.4%. Still, it was a softer quarter as it posted a significant miss of analysts’ full-year EPS guidance estimates and a significant miss of analysts’ EPS estimates.
Interestingly, the stock is up 1.3% since the results and currently trades at $50.67.
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 $3.16 billion, down 2.4% year on year. This print topped analysts’ expectations by 2.4%. It was a satisfactory quarter as it also put up a beat of analysts’ EPS estimates.
DXC achieved the biggest analyst estimates beat and highest full-year guidance raise, but had the slowest revenue growth among its peers. The stock is up 2.4% since reporting and currently trades at $13.96.
Read our full, actionable report on DXC here, it’s free.
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 $17.73 billion, up 7.7% year on year. This result surpassed analysts’ expectations by 2.3%. Taking a step back, it was a satisfactory quarter as it also recorded a beat of analysts’ EPS estimates but revenue guidance for next quarter meeting analysts’ expectations.
The stock is down 19% since reporting and currently trades at $248.
Read our full, actionable report on Accenture here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
