Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 6 stocks made the list for top value stocks in the IT Services & Consulting industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Why Focus on Undervalued IT Services & Consulting Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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6 Undervalued IT Services & Consulting Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 6 undervalued stocks in the IT Services & Consulting industry for Friday, March 15, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the IT Services & Consulting industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Cheer Holding Inc’s Value Grade

Value Grade:

Cheer Holding Inc, formerly Glory Star New Media Group Holdings Ltd, is a China-based company mainly engaged in the provision of next-generation mobile internet infrastructure and platform services. The Company is dedicated to building a digital ecosystem that integrates platforms, applications, technology, and industry into a cohesive system, thereby creating a new, open business environment for web3.0 that leverages artificial intelligence (AI) technology. The Company's portfolio includes a wide range of products and services, such as Polaris Intelligent Cloud, CHEERS Telepathy, CHEERS Open Platform, CHEERS Video, CHEERS e-Mall, CheerReal, CheerCar, CheerChat, CHEERS Fresh Group-Buying E-commerce Platform, Digital Innovation Research Institute, CHEERS Livestreaming, variety show series, IP short video matrix and more.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Cheer Holding Inc has a Value Score of 93, which is considered to be undervalued.

When you look at Cheer Holding Inc’s price-to-sales ratio at 0.15 compared to the industry median at 1.79, this company has a lower price relative to revenue compared to its peers. This could make Cheer Holding Inc’s stock more attractive for value investors.

Cheer Holding Inc’s price-earnings ratio is 0.85 compared to the industry median at 27.67. This means it has a lower share price relative to earnings compared to its peers. This could make Cheer Holding Inc more attractive for value investors.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Cheer Holding Inc’s shareholder yield is lower than its industry median ratio of (1.15%). Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Cheer Holding Inc’s price-to-book ratio is lower than its industry median ratio of 2.69. This could make Cheer Holding Inc more attractive to investors looking for a new addition to their portfolio.

Conduent Inc’s Value Grade

Value Grade:

Conduent Incorporated is a technology-led business process solutions company. Its segments include It operates through three segments: Commercial, Government, and Transportation. The Commercial segment provides business process services and customized solutions to clients in a variety of commercial industries. Its solutions and services include Customer Experience Management (CXM), Business Operations Solutions (BOS), Healthcare Claims and Administration Solutions and Human Capital Solutions. The Government segment include government healthcare solutions and government service solutions. Its Government Healthcare Solutions provide mission-critical program administration solutions for government healthcare programs with a range of solutions such as Medicaid management, provider services, and Medicaid business intelligence. The Transportation segment includes road usage charging and management solutions, transit solutions, curbside management solutions, and public safety solutions.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Conduent Inc has a Value Score of 87, which is considered to be undervalued.

Conduent Inc’s price-to-book ratio is higher than its peers. This could make Conduent Inc less attractive for value investors when compared to the industry median at 2.69.

You can read more about Conduent Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Cuentas Inc’s Value Grade

Value Grade:

Cuentas, Inc., together with its subsidiaries, is mainly focused on financial technology services, delivering mobile financial services, prepaid debit and digital content services to unbanked, underbanked and underserved communities. The Company mainly invests in financial technology and engages in use of certain licensed technology to provide telecommunications, mobility, and remittance solutions to unserved, unbanked, and emerging markets. The Company uses technology and certain licensed technology to provide telecommunications and telecommunications mobility and remittance solutions in emerging markets. It also offers wholesale telecommunications minutes and prepaid telecommunications minutes to consumers through its Tel3 division. It operates in three segments, namely telecommunications, wholesale telecommunication services, and digital products and general purpose reloadable cards.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Cuentas Inc has a Value Score of 63, which is considered to be undervalued.

Cuentas Inc’s price-to-book ratio is higher than its peers. This could make Cuentas Inc less attractive for value investors when compared to the industry median at 2.69.

You can read more about Cuentas Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

KLDiscovery Inc’s Value Grade

Value Grade:

KLDiscovery, Inc. is a global provider of eDiscovery, information governance and data recovery solutions to corporations, law firms, insurance companies and individuals in 17 countries around the world. It provides a suite of technology offerings, including its end-to-end fully integrated solution, Nebula, which comprehensively addresses information governance, eDiscovery and data recovery needs. With 26 locations across 17 countries, it delivers data management, information governance and eDiscovery solutions to support the litigation, regulatory compliance, and internal investigation needs of clients. It offers data collection and forensic investigation, early case assessment, data processing, application software and data hosting for Web-based document reviews, and managed document review services. In addition, through its global Ontrack data management business, it delivers data recovery, disaster recovery, email extraction and restoration, data destruction, and tape management.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

KLDiscovery Inc has a Value Score of 81, which is considered to be undervalued.

KLDiscovery Inc’s price-to-book ratio is higher than its peers. This could make KLDiscovery Inc less attractive for value investors when compared to the industry median at 2.69.

You can read more about KLDiscovery Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Mawson Infrastructure Group Inc’s Value Grade

Value Grade:

Mawson Infrastructure Group, Inc. is an Australia-based digital infrastructure provider. The Company owns and operates modular data centers (MDCs) in the United States. Its primary business is the ownership and operation of the digital infrastructure associated with the operation of blockchain applications. Application-specific integrated circuit (ASIC) computers known as Miners enable the mining of digital assets such as Bitcoin. It offers hosting or co-location facilities to other businesses in the digital asset infrastructure industry to have their Miners located within its MDCs. It also sells new and used digital currency mining, and MDC equipment. The Company is developing technology to enable it to own and better operate MDCs. It operates a site located in Pennsylvania, United States of America. The Miners operated by the Company are predominately focused on the process of digital mining, specifically for Bitcoin.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Mawson Infrastructure Group Inc has a Value Score of 67, which is considered to be undervalued.

Mawson Infrastructure Group Inc’s price-to-book ratio is higher than its peers. This could make Mawson Infrastructure Group Inc less attractive for value investors when compared to the industry median at 2.69.

You can read more about Mawson Infrastructure Group Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

TDCX Inc (ADR)’s Value Grade

Value Grade:

TDCX Inc. is a Singapore-based company, which is a provider of digital customer experience solutions. The Company?s service offerings include omnichannel CX solutions, sales and digital marketing services, and content, trust and safety services. It also offers services consisting of miscellaneous activities, such as providing workspaces to existing clients and providing human resource and administration services to clients. It helps its clients manage their relationships by providing digital customer experiences solutions, such as after-sales service and customer support. Its sales and digital marketing services help its clients market their products and services to their customers in both the business-to-consumer (B2C) and the business-to-business (B2B) markets. Its content, trust and safety services comprise content monitoring and moderation services, trust and safety services and data annotation services.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

TDCX Inc (ADR) has a Value Score of 68, which is considered to be undervalued.

TDCX Inc (ADR)’s price-earnings ratio is 11.4 compared to the industry median at 27.7. This means that it has a lower price relative to its earnings compared to its peers. This makes TDCX Inc (ADR) more attractive for value investors.

TDCX Inc (ADR)’s price-to-book ratio is higher than its peers. This could make TDCX Inc (ADR) less attractive for value investors when compared to the industry median at 2.69.

You can read more about TDCX Inc (ADR)’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other IT Services & Consulting Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about IT Services & Consulting stocks as well as other industrys.

Choosing Which of the 6 Best IT Services & Consulting Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Cheer Holding Inc stock has a Value Grade of A.
• Conduent Inc stock has a Value Grade of A.
• Cuentas Inc stock has a Value Grade of B.
• KLDiscovery Inc stock has a Value Grade of A.
• Mawson Infrastructure Group Inc stock has a Value Grade of B.
• TDCX Inc (ADR) stock has a Value Grade of B.

Now that you have a bit more background about each of the 6 undervalued stocks in the IT Services & Consulting industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About IT Services & Consulting Stocks

Want to learn more about IT Services & Consulting stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 6 Undervalued IT Services & Consulting Stocks for Friday, March 15
• 4 Undervalued IT Services & Consulting Stocks for Thursday, March 14
• What You Need to Know About Secureworks Corp's Q4 Earnings
• Which Is a Better Investment, Altair Engineering Inc or SoundHound AI Inc Stock?

AAII Disclaimer

We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because past, hypothetical or simulated performance is not necessarily indicative of future results. Before making an investment decision, you should consider your circumstances and whether the information on our content is applicable to your situation. This information was prepared in good faith and we accept no liability for any errors or omissions. The full disclaimer can be read here.