Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 7 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.

Latest IT Services & Consulting Stock News

Before choosing which top IT Services & Consulting stock to buy, be sure to conduct proper due diligence: analyze various financial metrics and look at historical data, public statements and news coverage.

The fundamental outlook for the IT Services and Consulting sub-industry for the next 12 months is positive. Client demand for highly sought after for highly sought-after services such as custom-built integrations are expected to grow strongly in 2022.  Geopolitical impacts from the Russia-Ukraine are expected to be more isolated in nature across the industry. Companies with a significant number of employees in Russia and Ukraine have been hit hard as fears around an inability to deliver consulting, engineering, and integration services remain a key risk. Conversely, for companies with employees spread across several regions, incremental revenue opportunities exist as clients in more impacted areas plan for contingencies if a worst-case scenario occurs. Revenues are expected to increase 18.1% and adjusted earnings per share 20.2% in 2022, driven by increased digital spending as opposed to spending on traditional projects. Headcount utilization and attrition levels will be key areas to watch throughout 2022 as underperformance could be driven by inability to source talent. The S&P 1500 IT Consulting Services Index is down 14.8% through April 1, 2022, compared to 4.6% from the S&P 1500. Much of the underperformance is attributed to outliers with significant exposure to the recent series of geopolitical events. For reference, the sub-industry index rose 35% in 2021, topping the S&P 1500 gain of 26.7% during the same timeframe.

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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7 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 7 undervalued stocks in the IT Services & Consulting industry for Friday, April 14, 2023. 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.

Data Storage Corp’s Value Grade

Value Grade:

Data Storage Corporation provides subscription-based, long-term agreements for disaster recovery solutions, infrastructure as a service (IaaS), cyber security, and voice and data solutions. The Company provides cloud-managed services and technologies across multiple platforms. It provides solutions and services to a range of clients in several industries, including healthcare, banking and finance, distribution services, manufacturing, construction, education, and government. Its cyber security solutions include ezSecurity, which offers a range of cyber security products that can be utilized on systems at the client’s location or on systems hosted in the Company’s cloud. It provides data protection and recovery solutions, which includes ezVault, ezRecovery, ezAvailability, and ezMirror. It offers cloud-hosted production systems, which include ezHost solution. It provides voice and data solutions, such as voice over Internet protocol (VoIP), Internet access, and data transport 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.

Data Storage Corp has a Value Score of 66, which is considered to be undervalued.

When you look at Data Storage Corp’s price-to-sales ratio at 0.52 compared to the industry median at 1.65, this company has a lower price relative to revenue compared to its peers. This could make Data Storage Corp’s stock 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. Data Storage Corp’s shareholder yield is lower than its industry median ratio of (1.14%). 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. Data Storage Corp’s price-to-book ratio is lower than its industry median ratio of 2.39. This could make Data Storage Corp more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Data Storage Corp’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Data Storage Corp’s price-to-free-cash-flow ratio is higher than its industry median ratio of 22.72. This could make Data Storage Corp less attractive because the higher P/FCF ratio indicates that Data Storage Corp is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

Edgio Inc’s Value Grade

Value Grade:

Edgio, Inc., formerly Limelight Networks, Inc., is a provider of content delivery network services to deliver digital content over the Internet. The Company delivers digital content, video delivery, Website development and acceleration, cloud security, edge compute, and origin storage services. Its geographic areas include Americas, Europe, Middle East, and Africa (EMEA), and Asia Pacific. The Company's edge services platform includes private Internet protocol (IP) network, software, and support services. Its services include Layer by Limelight (AppOps), which augments or replace a site’s existing Web content delivery network and security vendor to deliver faster page loads. Its cloud security services offer defense against malicious Website attacks and unauthorized content access without impacting the performance of Web applications and content delivery. Its customers include media, entertainment, gaming, technology and software, retail, live sports, e-commerce, and other sectors.

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.

Edgio Inc has a Value Score of 62, which is considered to be undervalued.

Edgio Inc’s price-to-book ratio is higher than its peers. This could make Edgio Inc less attractive for value investors when compared to the industry median at 2.39.

You can read more about Edgio 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.

Symbolic Logic Inc’s Value Grade

Value Grade:

Symbolic Logic, Inc., formerly Evolving Systems, Inc., is a technology research and development company. The Company is engaged in pursuing multiple strategic market opportunities that leverage its position as a digital marketing and activation company. The Company is engaged in developing a set of proprietary algorithms that model and predict behavior of dynamic systems. It also has developed a set of tools and technologies for applying (sticking) symbolic content to physical objects to catalog. It is focused on research into learning and modeling algorithms and building an application ecosystem for marking the physical world with digital tags.

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.

Symbolic Logic Inc has a Value Score of 100, which is considered to be undervalued.

Symbolic Logic Inc’s price-to-book ratio is higher than its peers. This could make Symbolic Logic Inc less attractive for value investors when compared to the industry median at 2.39.

You can read more about Symbolic Logic 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.

Information Services Group, Inc.’s Value Grade

Value Grade:

Information Services Group, Inc. is a global technology research and advisory firm. The Company is specialized in digital transformation services, including automation, cloud, and data analytics; sourcing advisory; managed governance and risk services; network carrier services; technology strategy and operations design; change management; market intelligence and technology research and analysis. It supports both private and public sector organizations to transform and optimize their operational environments. It provides an operating model, ISG NEXT, which offers solutions to businesses such as digital transformation and digital investments. It has two global client solution areas: ISG Digital, which is focused on developing technology, transformation, sourcing, and digital solutions for clients, and ISG Enterprise, which is focused on helping clients manage change and optimize operations in such areas as finance, human resources (HR) and Procure2Pay.

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.

Information Services Group, Inc. has a Value Score of 66, which is considered to be undervalued.

Information Services Group, Inc.’s price-earnings ratio is 13.2 compared to the industry median at 24.2. This means that it has a lower price relative to its earnings compared to its peers. This makes Information Services Group, Inc. more attractive for value investors.

Information Services Group, Inc.’s price-to-book ratio is lower than its peers. This could make Information Services Group, Inc. more attractive for value investors when compared to the industry median at 2.39.

You can read more about Information Services 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.

ePlus inc’s Value Grade

Value Grade:

ePlus inc. is a holding company. The Company is engaged in the business of selling, leasing, financing and managing information technology (IT). The Company operates through two segments: technology and financing. Its technology segment sells IT hardware products, third-party software and maintenance contracts, its own and third-party advanced professional and managed services, and its software. Its financing segment operations primarily consist of the financing of IT equipment, software, and related services. Both segments sell its products to commercial entities, state and local governments, government contractors, and educational institutions. The Company provides IT solutions, which enable organizations to optimize their IT environment and supply chain processes. It also provides consulting, professional, and managed services, IT staff augmentation, and complete lifecycle management services, including flexible financing and 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.

ePlus inc has a Value Score of 68, which is considered to be undervalued.

ePlus inc’s price-earnings ratio is 12.2 compared to the industry median at 24.2. This means that it has a lower price relative to its earnings compared to its peers. This makes ePlus inc more attractive for value investors.

ePlus inc’s price-to-book ratio is higher than its peers. This could make ePlus inc less attractive for value investors when compared to the industry median at 2.39.

You can read more about ePlus 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.

VNET Group Inc - ADR’s Value Grade

Value Grade:

VNET Group Inc, formerly 21Vianet Group Inc, is a carrier-neutral Internet data center services provider. The Company hosts its customers' servers and networking equipment and provides interconnectivity. The Company also provides managed network services to enable customers to deliver data across the Internet through its data transmission network and smart routing technology. The Company provides value-added services, such as content delivery network services, virtual private network services and last-mile wired broadband services. It offers public cloud services, private cloud and hybrid services. The Company also offers container-based data center service. The Company's service offerings include hosting and related services, and managed network services. The Company provides hosting and related services to house servers and networking equipment in its data centers and connects them through its data transmission network, and offers other hosting related value-added 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.

VNET Group Inc - ADR has a Value Score of 76, which is considered to be undervalued.

VNET Group Inc - ADR’s price-to-book ratio is higher than its peers. This could make VNET Group Inc - ADR less attractive for value investors when compared to the industry median at 2.39.

You can read more about VNET Group 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.

WidePoint Corporation’s Value Grade

Value Grade:

WidePoint Corporation is a provider of technology management as a service (TMaaS). TMaaS consists of federally certified communications management, identity management, interactive bill presentment and analytics, and information technology (IT) as a service solution. It provides a range of services, which includes telecom lifecycle management, mobile and identity management, digital billing and analytics solutions, and IT as a service. It offers telecom lifecycle management solutions to enterprises both in the public and private sectors. The mobile and identity management solution offers federally certified digital certificates and credentials that enable its customers to provide multifactor authentication (MFA) solutions. The digital billing and analytics solutions offer billing communications and analytics solutions to large communications service providers (CSPs). Its IT as a service solution offers cybersecurity, cloud services, network operations, and professional 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.

WidePoint Corporation has a Value Score of 97, which is considered to be undervalued.

WidePoint Corporation’s price-to-book ratio is higher than its peers. This could make WidePoint Corporation less attractive for value investors when compared to the industry median at 2.39.

You can read more about WidePoint Corporation’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 7 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.

• Data Storage Corp stock has a Value Grade of B.
• Edgio Inc stock has a Value Grade of B.
• Symbolic Logic Inc stock has a Value Grade of A.
• Information Services Group, Inc. stock has a Value Grade of B.
• ePlus inc stock has a Value Grade of B.
• VNET Group Inc - ADR stock has a Value Grade of B.
• WidePoint Corporation stock has a Value Grade of A.

Now that you have a bit more background about each of the 7 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.

• 7 Undervalued IT Services & Consulting Stocks for Friday, April 14
• 3 Undervalued IT Services & Consulting Stocks for Thursday, April 13
• Why 2U Inc’s (TWOU) Stock Is Up 4.20%
• Why Absolute Software Corp’s (ABST) Stock Is Up 6.57%

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