III - Information Services Group: Market May Be Overlooking Changes

2024-04-19 12:30:34 ET

Summary

• Information Services Group's stock has been declining steadily since late 2021 due to macro pressures, but the future looks brighter with recurring revenue products driving sales growth.
• Once we get past today's macro issues, their recurring revenue portfolio is positioned to drive long-term growth and overcome any sales pressures from their legacy sourcing advisory business.
• Concurrent with the mix shift to recurring revenue products, ISG should not only see an improvement in margins from operating leverage, but a mix shift to higher-margin products.

Introduction

Information Services Group, Inc.'s ( III ) stock chart over the past 4 years reflects that of most software businesses - a rise throughout 2020 and into late 2021, but a steady decline since then. And with recent macro pressures impacting both the top and bottom-line, it's no surprise we haven't seen a let up in the stock pressure....

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