IT Consulting & Software Stocks: Financial statements and historical data

How to compare IT Consulting & Software companies

IT consulting and software companies depend on client technology spending, contract execution and employee productivity. Distinguish service providers from product businesses, and compare companies with similar customer, geography and service exposure.

What to check in the company reports

• Compare reported revenue growth with constant-currency growth where the company discloses it.
• Review operating margins alongside utilisation, employee costs, attrition and the timing of large deal ramp-ups.
• Check whether operating cash flow follows profit, and whether receivables, acquisitions or capitalised development costs explain a gap.

Reading the valuations

Compare P/E and cash-flow-based valuations against sustainable growth, margins and cash conversion. A large order announcement is not the same as recognised revenue or collected cash.