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Information Services Group
(NASDAQ:III)
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Rating:68Neutral
Price Target:
$6.50
▲(27.95% Upside)
Action:Downgraded
Date:09/07/26
III scores as moderately attractive, led by improving financial safety and profitability (sharp deleveraging and better returns) alongside supportive price momentum (trading above key moving averages with positive MACD). The score is held back by weaker TTM cash-flow momentum and a meaningful gross-margin step-down, which raise durability questions, while valuation is fair with a supportive dividend but not clearly cheap.
Positive Factors
Deleveraging
Sharp deleveraging materially reduces balance-sheet risk and interest-related pressure, giving ISG greater flexibility to fund client initiatives, maintain operations through demand changes, and allocate capital toward growth without relying heavily on additional borrowing.
Negative Factors
Gross-Margin Compression
The substantial gross-margin decline raises questions about pricing, service mix, or delivery economics and reduces the quality of the revenue recovery. Persistently lower gross margins would limit operating leverage and make earnings more sensitive to changes in demand and execution.
Read all positive and negative factors
Positive Factors
Negative Factors
Deleveraging
Sharp deleveraging materially reduces balance-sheet risk and interest-related pressure, giving ISG greater flexibility to fund client initiatives, maintain operations through demand changes, and allocate capital toward growth without relying heavily on additional borrowing.
Read all positive factors
Information Services Group Key Performance Indicators (KPIs)
Any
Revenue by Geography
Information Services Group’s regional revenue split shows how much sales come from North America, EMEA, APAC and other markets, revealing where the business is strongest and where growth is coming from. High concentration in one region increases exposure to local economic cycles, regulatory changes and currency swings, while rising shares in faster-growing regions point to diversification and expansion potential for the consulting and research business.
Information Services Group’s regional revenue split shows how much sales come from North America, EMEA, APAC and other markets, revealing where the business is strongest and where growth is coming from. High concentration in one region increases exposure to local economic cycles, regulatory changes and currency swings, while rising shares in faster-growing regions point to diversification and expansion potential for the consulting and research business.
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The Fly
The FlyInformation Services Group (III) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$294.84M
Dividend Yield2.96%
Average Volume (3M)235.43K
Price to Earnings (P/E)25.2
Beta (1Y)1.05
Revenue Growth4.18%
EPS Growth50.80%
CountryUS
Employees1,500
SectorTechnology
Sector Strength88
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)0.24
Shares Outstanding48,413,464
10 Day Avg. Volume178,195
30 Day Avg. Volume235,430
Financial Highlights & Ratios
PEG Ratio0.14
Price to Book (P/B)2.94
Price to Sales (P/S)1.14
P/FCF Ratio11.14
Enterprise Value/Market Cap0.84
Enterprise Value/Revenue0.99
Enterprise Value/Gross Profit2.36
Enterprise Value/Ebitda9.48
Forecast
1Y Price Target
$6.00Price Target Upside18.11% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)0.24
Revenue Forecast (FY)$255.09M
Information Services Group Business Overview & Revenue Model
Company Description
Information Services Group, Inc. is a global AI-centered technology research and advisory firm. A trusted partner to more than 900 clients, ISG helps organizations achieve operational excellence and faster growth through digital transformation ser...
How the Company Makes Money
ISG generates revenue primarily by selling professional services and subscription-style research offerings. A major revenue stream comes from advisory and consulting engagements in which ISG helps clients evaluate, select, contract with, and gover...
Information Services Group Earnings Call Summary
Earnings Call Date:May 07, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Nov 02, 2026
Earnings Call Sentiment Positive
The call presented more positive developments than setbacks: modest overall revenue growth, continued double‑digit adjusted EBITDA expansion and margin improvement, a sharp acceleration in AI‑related revenue, a record multiyear governance win, strong European performance, and progress toward higher recurring revenue. Weakness was concentrated in Asia Pacific (down 14.7% YoY) and a slight Americas decline, along with a QoQ reduction in cash driven by seasonality and capital returns. Management is constructive on demand and AI as a tailwind but remains cautious on macro uncertainty and is taking a conservative near‑term posture.Positive Updates
Top-of-Guidance Revenue and Year‑Over‑Year Growth
Q1 revenue of $61.2M, up 3% year‑over‑year and at the top end of guidance; company expects Q2 revenue of $62.5M to $63.5M, indicating continued growth momentum.
Negative Updates
Asia Pacific Revenue Decline
APAC revenue of $4.1M, down 14.7% YoY ($700K decline); management expects sequential recovery of ~20% in Q2 based on current pipeline, but APAC remains a weakness year‑over‑year in Q1.
Read all updates
Q1-2026 Updates
Positive
Negative
Top-of-Guidance Revenue and Year‑Over‑Year Growth
Q1 revenue of $61.2M, up 3% year‑over‑year and at the top end of guidance; company expects Q2 revenue of $62.5M to $63.5M, indicating continued growth momentum.
Read all positive updates
Company Guidance
ISG guided Q2 revenue of $62.5–$63.5 million and adjusted EBITDA of $8–$9 million (vs. Q2’25 revenue of $61.6M), signaling continued year‑over‑year growth and margin expansion off a Q1 base of $61.2M revenue (+3% YoY) and $8.3M adjusted EBITDA (+11.8%; 13.5% margin, +111 bps). Management expects Asia‑Pacific to rise ~20% sequentially (Q1 APAC $4.1M → ≈$4.9M), a robust Americas pipeline implying solid Y/Y growth, and sustained strong operating cash flow for the remainder of the year after ending Q1 with $22.7M cash, $0.7M net cash used in ops, headcount ~1,276, consulting utilization 71.5%, gross debt/EBITDA just under 1.8x and an average borrowing rate of 5.4%.Information Services Group Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
78
Positive
Cash Flow
54
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 250.25M | 244.72M | 247.59M | 291.05M | 286.27M | 277.83M |
| Gross Profit | 105.48M | 100.87M | 97.28M | 112.14M | 116.62M | 109.36M |
| EBITDA | 26.23M | 23.14M | 16.95M | 21.21M | 35.21M | 30.78M |
| Net Income | 11.69M | 9.34M | 2.84M | 6.15M | 19.73M | 15.53M |
Balance Sheet | ||||||
| Total Assets | 204.60M | 211.00M | 204.51M | 247.34M | 243.03M | 236.79M |
| Cash, Cash Equivalents and Short-Term Investments | 23.68M | 28.66M | 23.07M | 22.64M | 30.59M | 47.52M |
| Total Debt | 67.50M | 70.53M | 64.92M | 87.05M | 85.97M | 79.79M |
| Total Liabilities | 108.77M | 116.33M | 108.23M | 145.26M | 142.60M | 138.40M |
| Stockholders Equity | 95.83M | 94.68M | 96.29M | 102.08M | 100.43M | 98.39M |
Cash Flow | ||||||
| Free Cash Flow | 11.34M | 24.99M | 17.03M | 8.84M | 7.72M | 39.62M |
| Operating Cash Flow | 14.61M | 29.01M | 19.86M | 12.27M | 11.15M | 41.94M |
| Investing Cash Flow | -4.61M | -4.94M | 18.99M | -4.43M | -6.87M | -2.32M |
| Financing Cash Flow | -15.63M | -19.55M | -37.91M | -16.20M | -18.94M | -34.13M |
Information Services Group Technical Analysis
Positive
5.08
Price Trends
5.39
Positive
4.80
Positive
4.62
Positive
Market Momentum
0.20
Negative
67.64
Neutral
85.82
Negative
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 5.08 is below the 20-day moving average (MA) of 5.80, below the 50-day MA of 5.39, and above the 200-day MA of 4.62, indicating a bullish trend. The MACD of 0.20 indicates Negative momentum. The RSI at 67.64 is Neutral, neither overbought nor oversold. The STOCH value of 85.82 is Negative, 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 40 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 |
|---|---|---|---|---|---|---|---|
68 Neutral | $294.84M | 25.15 | 12.32% | 2.96% | 4.18% | 50.80% | |
67 Neutral | $304.01M | 18.80 | 22.15% | 3.93% | -9.12% | 5.60% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $390.13M | -24.86 | -15.53% | ― | 65.93% | 71.75% | |
50 Neutral | $264.39M | -1.12 | -30.45% | ― | -10.31% | -2595.28% | |
48 Neutral | $74.44M | -0.35 | -162.47% | 6.02% | -4.78% | -699.44% | |
46 Neutral | $191.04M | -0.45 | 134.79% | ― | -0.61% | -405.05% |
* Technology Sector Average
III
Information Services Group
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0.72
13.47%
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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.