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Q4 Earnings Highlights: Kyndryl (NYSE:KD) Vs The Rest Of The IT Services & Consulting Stocks

KD Cover Image

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 Q4. Today, we are looking at it services & consulting stocks, starting with Kyndryl (NYSE: KD).

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 7 it services & consulting stocks we track reported a mixed Q4. As a group, revenues beat analysts’ consensus estimates by 0.6% while next quarter’s revenue guidance was in line.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 22.9% since the latest earnings results.

Weakest Q4: 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 $3.86 billion, up 3.1% year on year. This print fell short of analysts’ expectations by 1%. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ EPS estimates and a slight miss of analysts’ revenue estimates.

"In the third quarter, we drove growth in Kyndryl Consult and through our alliances with hyperscalers and other leading technology providers. Our signings continue to reflect the vital role we play in the operation of customers' technology estates, our deep expertise in mission-critical services and our innovation in AI, cloud and security," said Kyndryl Chairman and Chief Executive Officer Martin Schroeter.

Kyndryl Total Revenue

Kyndryl delivered the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is down 47.4% since reporting and currently trades at $12.35.

Read our full report on Kyndryl here, it’s free.

Best Q4: 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 $1.75 billion, up 2.2% year on year, in line with analysts’ expectations. The business had a very strong quarter with a beat of analysts’ EPS estimates and revenue in line with analysts’ estimates.

Gartner Total Revenue

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 22.6% since reporting. It currently trades at $156.60.

Is now the time to buy Gartner? Access our full analysis of the earnings results 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 $3.19 billion, flat year on year, in line with analysts’ expectations. It was a mixed quarter as it posted a beat of analysts’ EPS estimates but a significant miss of analysts’ EPS guidance for next quarter estimates.

DXC delivered the slowest revenue growth in the group. As expected, the stock is down 12.6% since the results and currently trades at $12.60.

Read our full analysis of DXC’s results here.

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 $980.1 million, flat year on year. This number surpassed analysts’ expectations by 0.6%. Aside from that, it was a mixed quarter as it also produced a decent beat of analysts’ EPS guidance for next quarter estimates but a significant miss of analysts’ EPS estimates.

The stock is down 19.5% since reporting and currently trades at $42.91.

Read our full, actionable report on ASGN 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 $18.74 billion, up 6% year on year. This result beat analysts’ expectations by 1.2%. Zooming out, it was a mixed quarter as it also recorded a beat of analysts’ EPS estimates but a slight miss of analysts’ full-year EPS guidance estimates.

The stock is down 23.9% since reporting and currently trades at $208.35.

Read our full, actionable report on Accenture here, it’s free.

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