IT Services Industry Report
Market Cap: $11.2T
Stocks: 153
Median P/E: 13.5x
Median ROIC: 6.5%
Data sourced from SEC EDGAR filings. Report refreshed weekly.
Part of the Technology sector.
Performance Dashboard
| Period | Sector (MCW) | Sector (Median) |
|---|---|---|
| 1 Day | -0.3% | +0.3% |
| 1 Week | -2.2% | +3.1% |
| 1 Month | — | — |
| 3 Months | — | — |
| 6 Months | — | — |
| YTD | -0.8% | +1.3% |
| 1 Year | +82.4% | -13.3% |
| 3 Years | +196.0% | -11.2% |
| 5 Years | +159.3% | -64.3% |
Today's Breadth: 72 advancing · 61 declining · 1 flat
Valuation Summary
| Metric | Median | P25 | P75 | vs 5Y Avg |
|---|---|---|---|---|
| P/E | 13.5x | 0.0x | 28.4x | -35% |
| P/B | 1.7x | 0.0x | 4.2x | -46% |
| P/S | 1.0x | 0.0x | 2.8x | — |
| P/FCF | 11.2x | 2.6x | 21.3x | — |
| EV/EBITDA | 12.4x | 9.5x | 19.1x | — |
| EV/EBIT | 16.8x | 12.4x | 22.5x | — |
Earnings Yield
4.1%
FCF Yield
5.1%
Below Fair Value
56% of stocks
Profitability Profile
Margins
| Metric | Median | 5Y Avg | P25 | P75 |
|---|---|---|---|---|
| Gross Margin | 52.5% | 49.6% | 28.4% | 70.3% |
| Operating Margin | 6.1% | — | -4.0% | 13.4% |
| Net Margin | 4.0% | 0.5% | -7.1% | 10.0% |
| FCF Margin | 10.4% | — | 2.3% | 20.8% |
Returns on Capital
| Metric | Median | 5Y Avg | P25 | P75 |
|---|---|---|---|---|
| ROE | 9.3% | — | -7.0% | 27.4% |
| ROA | 3.2% | — | -5.4% | 10.6% |
| ROIC | 6.5% | 2.9% | -5.7% | 22.0% |
Growth Metrics
| Metric | 1Y | 3Y CAGR | 5Y CAGR |
|---|---|---|---|
| Revenue | +6.8% | +7.5% | +10.5% |
| EPS | +19.5% | +10.6% | +11.3% |
| Free Cash Flow | +24.1% | +17.5% | +12.0% |
All values represent sector median growth rates.
Balance Sheet Health
Debt / Equity
0.3x
Net Debt / EBITDA
0.3x
Interest Coverage
4.2x
Current Ratio
1.5x
Altman Z-Score
Safe (>3): 51 (37%)
Gray (1.8–3): 20 (14%)
Distress (<1.8): 67 (49%)
Piotroski F-Score
Strong (7–9): 33 (22%)
Moderate (4–6): 88 (58%)
Weak (0–3): 30 (20%)
Top Companies
| Symbol | #▲ | Mkt Cap | P/E | EV/EBITDA | ROIC | Net Mgn | Rev Gr. | Div Yld | YTD | Qual. |
|---|---|---|---|---|---|---|---|---|---|---|
| GOOGL | 1 | $4.4T | 29.0x | 25.1x | 36.0% | 32.8% | +15.1% | 0.3% | -1.3% | 5/9 |
| GOOG | 2 | $4.4T | 13.9x | 11.8x | 36.0% | 32.8% | +15.1% | 0.3% | -1.1% | 5/9 |
| META | 3 | $1.5T | 28.2x | 16.5x | 33.1% | 30.1% | +22.2% | 0.3% | -1.1% | 6/9 |
| APP | 4 | $180.2B | 73.3x | 55.9x | 101.4% | 60.8% | +70.0% | — | -0.9% | 6/9 |
| ADP | 5 | $99.0B | 30.1x | 19.5x | 75.7% | 19.8% | +7.1% | 2.0% | +2.5% | 5/9 |
| BILI | 6 | $53.4B | — | — | 45.9% | 4.0% | +13.1% | — | +1.3% | 1/9 |
| GDS | 7 | $48.5B | — | — | 1.9% | 7.8% | +10.8% | — | +1.3% | 0/9 |
| RDDT | 8 | $39.4B | 86.2x | — | 114.0% | 24.1% | +69.4% | — | -3.0% | 3/9 |
| WDAY | 9 | $36.2B | — | — | 6.0% | 7.3% | +13.1% | — | +4.5% | 3/9 |
| BAIDF | 10 | $35.4B | — | — | 1.6% | 0.5% | -3.0% | — | +22.2% | 1/9 |
| BIDU | 11 | $31.5B | — | — | 1.6% | 0.5% | -3.0% | — | +9.7% | 1/9 |
| ZM | 12 | $26.8B | 15.6x | — | 18.3% | 39.0% | +4.4% | — | +1.6% | 7/9 |
| VRSK | 13 | $26.4B | 34.0x | 20.4x | 38.6% | 29.6% | +6.6% | 0.8% | +6.5% | 7/9 |
| FLUT | 14 | $18.8B | — | 30.8x | 0.2% | -1.9% | +16.6% | — | +3.5% | 1/9 |
| TOST | 15 | $17.6B | 65.1x | — | 40.3% | 5.6% | +24.1% | — | -0.1% | 2/9 |
| IOT | 16 | $16.4B | — | — | -0.7% | -0.6% | +29.6% | — | -1.6% | 1/9 |
| CAP-PA | 17 | $15.6B | 16.0x | 9.6x | 12.1% | 7.6% | -2.4% | 2.3% | — | 5/9 |
| PINS | 18 | $15.1B | 42.9x | — | 12.5% | 9.9% | +15.8% | — | +3.4% | 8/9 |
| LDOS | 19 | $14.1B | 16.8x | 11.4x | 19.4% | 8.4% | +3.1% | 0.9% | -0.5% | 4/9 |
| IONQ | 20 | $13.8B | — | — | -24.4% | — | — | — | +0.8% | 1/9 |
Industry Composition
| Industry | Stocks | Market Cap | % | |
|---|---|---|---|---|
| Services-Computer Programming, Data Processing, Etc. | 49 | $10.7T | 95.2% | |
| Services-Computer Processing & Data Preparation | 54 | $346.4B | 3.1% | |
| Services-Computer Integrated Systems Design | 33 | $138.2B | 1.2% | |
| Information Technology Services | 17 | $49.6B | 0.4% |
Quality Distribution
0
1
2
3
4
5
6
7
8
9
Quality Score (0-9)
High Quality (7+)
5%
Median Piotroski F
5/9
Profitable Years
3 of 10
Dividends & Shareholder Returns
Paying Dividends
23%
Median Div Yield
1.1%
Median Buyback Yield
0.4%
Shareholder Yield
1.4%
Payout Ratio
28.2%
Div Growth (3Y)
8.6%
Div Growth (5Y)
8.5%
Strengths & Weaknesses
Strengths
- +[Growth]Strong secular growth with a median 5-year revenue CAGR of 10.5%, outpacing nominal GDP.
- +[Profitability]High pricing power with a median gross margin of 52.5%, reflecting differentiated products or strong brand moats.
- +[Valuation]Attractive valuations: current median P/E of 13.5x is 35.5% below the 5-year average, presenting potential value opportunity.
Weaknesses
- −[Financial Health]48.6% of companies fall in the Altman Z-Score distress zone (<1.8), indicating elevated bankruptcy risk within the sector.
- −[Quality]Only 5.2% of companies score 7+ on the quality checklist, reflecting structural challenges in achieving consistent returns across the sector.