Let’s dig into the relative performance of ASGN (NYSE: ASGN) and its peers as we unravel the now-completed Q1 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 7 it services & consulting stocks we track reported a satisfactory Q1. As a group, revenues beat analysts’ consensus estimates by 1% 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 5.9% since the latest earnings results.

Weakest Q1: 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 $968.3 million, down 7.7% year on year. This print exceeded analysts’ expectations by 0.6%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts’ EPS estimates.

ASGN delivered the slowest revenue growth of the whole group. Unsurprisingly, the stock is down 19.6% since reporting and currently trades at $47.05.

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

Best Q1: 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 $100.4 million, up 25.8% year on year, outperforming analysts’ expectations by 2%. The business had a very strong quarter with a solid beat of analysts’ EPS estimates and full-year revenue guidance beating 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 27.2% since reporting. It currently trades at $10.25.

Is now the time to buy Grid Dynamics? 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 $3.17 billion, down 6.4% year on year, exceeding analysts’ expectations by 0.9%. Still, it was a slower quarter as it posted a significant miss of analysts’ EPS guidance for next quarter estimates.

DXC delivered the weakest full-year guidance update in the group. As expected, the stock is down 14.2% since the results and currently trades at $14.21.

Read our full analysis of DXC’s results here.

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 $14.54 billion, flat year on year. This print surpassed analysts’ expectations by 1%. It was a strong quarter as it also produced a solid beat of analysts’ operating income estimates and an impressive beat of analysts’ EPS estimates.

The stock is up 14.9% since reporting and currently trades at $281.64.

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

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 $1.30 billion, up 11.7% year on year. This number topped analysts’ expectations by 1.6%. Overall, it was a very strong quarter as it also put up an impressive beat of analysts’ EPS guidance for next quarter estimates and an impressive beat of analysts’ constant currency revenue estimates.

The stock is up 1.9% since reporting and currently trades at $162.40.

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

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

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