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Information Services Group (III)
NASDAQ:III
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Information Services Group
(NASDAQ:III)
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Rating:69Neutral
Price Target:
$5.50
▼(-5.50% Downside)
The overall stock score of 69 reflects a strong financial performance and positive earnings call sentiment, driven by AI-related growth and improved profitability. However, the stock's valuation appears high, and technical indicators suggest mixed momentum. Challenges in the Asia Pacific region and slower European recovery also weigh on the score.
Positive Factors
AI-Driven Growth
The significant increase in AI-related revenue indicates a strong market demand and ISG's capability to capitalize on this trend, enhancing long-term growth prospects.
Increased Profitability
Improved profitability and margin expansion demonstrate operational efficiency and the ability to convert revenue into earnings, supporting sustainable growth.
Strong Cash Flow
Robust cash flow generation enhances financial flexibility and supports strategic investments, underpinning long-term business stability.
Negative Factors
Decline in Asia Pacific Revenue
The decline in Asia Pacific revenue highlights regional challenges and dependency on other markets, which could impact overall growth if not addressed.
Slow Recovery in European Transformation
Sluggish transformation in Europe suggests potential hurdles in adapting to market changes, which may affect competitive positioning and growth.
Revenue Growth Challenges
Persistent revenue growth challenges indicate potential market saturation or competitive pressures, which could hinder long-term expansion.
Information Services Group (III) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$281.08M
Dividend Yield3.03%
Average Volume (3M)281.47K
Price to Earnings (P/E)30.3
Beta (1Y)0.69
Revenue Growth-5.74%
EPS GrowthN/A
CountryUS
Employees1,300
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)0.06
Shares Outstanding47,884,106
10 Day Avg. Volume203,653
30 Day Avg. Volume281,473
Financial Highlights & Ratios
PEG Ratio-1.04
Price to Book (P/B)1.69
Price to Sales (P/S)0.66
P/FCF Ratio9.57
Enterprise Value/Market Cap1.17
Enterprise Value/Revenue1.37
Enterprise Value/Gross Profit3.24
Enterprise Value/Ebitda14.54
Forecast
1Y Price Target
$6.75Price Target Upside15.98% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Information Services Group Business Overview & Revenue Model
Company DescriptionInformation Services Group, Inc., together with its subsidiaries, operates as a technology research and advisory company in the Americas, Europe, and the Asia Pacific. The company offers digital transformation services, including automation, cloud, and data analytics; sourcing advisory; managed governance and risk; network carrier; technology strategy and operations design; change management; and market intelligence and technology research and analysis services. It supports private and public sector organizations to transform and optimize their operational environments. The company also provides ISG Digital, a client solution platform that helps clients developing technology, transformation, sourcing, and digital solutions; and ISG Enterprise, a client solution platform that helps clients manage change and optimize operations in areas comprising finance, human resource, and Procure2Pay. In addition, it offers ISG GovernX, a software platform, which provides insights from market and performance data, and automates the management of third-party supplier relationships that comprise contract and project lifecycles, and risk management. The company serves private sector clients operating in the manufacturing, banking and financial services, insurance, health sciences, energy and utilities, and consumer services industries; and public sector clients, including state and local governments, airport and transit authorities, and national and provincial government units. Information Services Group, Inc. was founded in 2006 and is based in Stamford, Connecticut.
How the Company Makes MoneyISG generates revenue primarily through its consulting services, which include strategic advisory, sourcing advisory, and benchmarking services. The company charges clients on a fee-for-service basis, typically through hourly billing or project-based contracts. Key revenue streams include fees from advisory engagements, subscription fees for access to proprietary research and insights, and revenues from managed services. ISG has developed significant partnerships with leading technology providers and industry organizations, enhancing its service offerings and facilitating client engagement, which in turn contributes to its earnings.
Information Services Group Earnings Call Summary
Earnings Call Date:Nov 03, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Mar 05, 2026
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue growth driven by AI demand, increased profitability, and successful client engagements, particularly in the Americas and Europe. However, challenges remain in the Asia Pacific region with a decline in revenue, and slower transformation recovery in Europe. Overall, the call reflects a positive outlook with continued focus on AI-powered growth and margin expansion.Q3-2025 Updates
Positive Updates
Strong Revenue Growth
Q3 revenues were $62 million, up 8% from the previous year, excluding divested automation unit results. The Americas region led with an 11% increase, and Europe saw a 7% growth.
Increased Profitability
Adjusted EBITDA rose 19% to $8.4 million, with a margin increase of 200 basis points to 13.5%. Net income for the quarter was $3.1 million, or $0.06 per share, up from $1.1 million, or $0.02 per share, the previous year.
AI-Driven Growth
AI-related revenue quadrupled to $20 million compared to last year, with 350 clients supported in AI-related services, marking over a 200% increase.
Strong Cash Flow
Generated $11 million in cash from operations for the quarter, with a total of $23 million over the last two quarters.
Successful Client Engagements
Engagements with major clients like Lockheed Martin and Carnival Cruise Lines, with significant projects in Europe and the Americas.
AI Impact Summit Success
The AI Impact Summit in London was the largest client event in the company's history, highlighting the strong market interest in AI insights.
Negative Updates
Decline in Asia Pacific Revenue
Asia Pacific revenues were down 15% compared to the previous year, with public sector spending not yet reigniting.
Slow Recovery in European Transformation
While Europe returned to growth, transformation efforts remain slower compared to optimization, reflecting cautious macroeconomic conditions.
Company Guidance
During the Information Services Group's (ISG) Third Quarter 2025 Conference Call, guidance for the fourth quarter was provided, targeting revenues between $60.5 million and $61.5 million. ISG also expects an adjusted EBITDA increase of 15% to 20%, translating to a range of $7.5 million to $8.5 million, which aligns with their year-over-year growth and margin expansion goals. The guidance reflects continued momentum driven by their AI-centered approach, which has significantly contributed to ISG's performance, including a Q3 revenue of $62 million, an 8% increase from the previous year. This growth was particularly strong in the Americas, which saw an 11% rise, and Europe, which experienced a 7% increase. ISG's adjusted EBITDA for Q3 was $8.4 million, up 19%, with a margin improvement of 200 basis points to 13.5%.Information Services Group Financial Statement Overview
Summary
Information Services Group exhibits a solid financial performance with notable improvements in revenue growth and cash flow generation. The company has managed to enhance its profitability margins and maintain a stable balance sheet. While leverage remains a consideration, the overall financial health is strong, supported by efficient cash flow management and improved equity returns.Income Statement
The company demonstrates strong revenue growth in the TTM period with a 45.3% increase, recovering from a decline in the previous year. Gross profit margin has improved to 41.8% in the TTM, indicating efficient cost management. However, net profit margin remains relatively low at 3.3%, suggesting room for improvement in profitability. EBIT and EBITDA margins have also improved, reflecting better operational efficiency.Balance Sheet
The debt-to-equity ratio has decreased slightly to 0.66 in the TTM, indicating a stable leverage position. Return on equity has improved to 8.2%, showing better utilization of equity to generate profits. The equity ratio remains stable, suggesting a balanced capital structure. However, the company still carries a significant amount of debt, which could pose risks if not managed properly.Cash Flow
The company shows strong free cash flow growth of 4.1% in the TTM, indicating improved cash generation capabilities. The operating cash flow to net income ratio is robust at 0.75, suggesting efficient conversion of income into cash. The free cash flow to net income ratio is high at 0.91, reflecting strong cash flow relative to earnings, which is a positive sign for liquidity and financial health.| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 241.29M | 247.59M | 291.05M | 286.27M | 277.83M | 249.13M |
| Gross Profit | 101.92M | 97.28M | 112.14M | 116.62M | 109.36M | 99.25M |
| EBITDA | 22.68M | 16.95M | 21.21M | 35.21M | 30.78M | 15.63M |
| Net Income | 9.77M | 2.84M | 6.15M | 19.73M | 15.53M | 2.75M |
Balance Sheet | ||||||
| Total Assets | 213.25M | 204.51M | 247.34M | 243.03M | 236.79M | 239.52M |
| Cash, Cash Equivalents and Short-Term Investments | 28.73M | 23.07M | 22.64M | 30.59M | 47.52M | 43.73M |
| Total Debt | 68.51M | 64.92M | 87.05M | 85.97M | 79.79M | 84.73M |
| Total Liabilities | 118.56M | 108.23M | 145.26M | 142.60M | 138.40M | 140.38M |
| Stockholders Equity | 94.69M | 96.29M | 102.08M | 100.43M | 98.39M | 99.14M |
Cash Flow | ||||||
| Free Cash Flow | 26.71M | 17.03M | 8.84M | 7.72M | 39.62M | 42.79M |
| Operating Cash Flow | 30.50M | 19.86M | 12.27M | 11.15M | 41.94M | 43.97M |
| Investing Cash Flow | 17.11M | 18.99M | -4.43M | -6.87M | -2.32M | -3.50M |
| Financing Cash Flow | -28.86M | -37.91M | -16.20M | -18.94M | -34.13M | -15.70M |
Information Services Group Technical Analysis
Positive
5.82
Price Trends
5.62
Positive
5.47
Positive
4.89
Positive
Market Momentum
0.05
Positive
51.33
Neutral
60.61
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For III, the sentiment is Positive. The current price of 5.82 is below the 20-day moving average (MA) of 5.92, above the 50-day MA of 5.62, and above the 200-day MA of 4.89, indicating a neutral trend. The MACD of 0.05 indicates Positive momentum. The RSI at 51.33 is Neutral, neither overbought nor oversold. The STOCH value of 60.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for III.
Information Services Group Risk Analysis
Information Services Group disclosed 37 risk factors in its most recent earnings report. Information Services Group reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Information Services Group Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $281.08M | 30.29 | 10.22% | 3.03% | -5.74% | ― | |
65 Neutral | $542.89M | 51.85 | 10.27% | 2.41% | 0.68% | -67.84% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
53 Neutral | $390.16M | -12.87 | -23.73% | ― | 17.44% | 41.97% | |
51 Neutral | $174.29M | -9.71 | -6.65% | ― | -5.70% | 94.70% | |
47 Neutral | $305.78M | -2.02 | -15.87% | ― | -12.45% | -142.77% | |
45 Neutral | $201.80M | -0.62 | ― | ― | -4.93% | 18.65% |
* Technology Sector Average
III
Information Services Group
5.82
2.81
93.23%
TTEC
TTEC Holdings
3.61
-0.39
-9.75%
HCKT
The Hackett Group
19.93
-8.44
-29.75%
UIS
Unisys
2.88
-3.39
-54.07%
CNDT
Conduent
2.01
-1.79
-47.11%
TLS
Telos
5.23
2.04
63.95%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.