NobleCon 18. ISG CEO Michael Connors and CFO Bert Alfonso presented at NobleCon18. The transformation of the Company during COVID, ISG NEXT, and potential for acquisitions were highlighted in the presentation. A rebroadcast is available at https://noble.mediasite.com/mediasite/Catalog/Full/4ec6170801b441318e66ea53d53540a421.A Changing Model. The COVID environment gave ISG the ability to transform the business towards two different segments, ISG Digital and ISG Enterprise, which gave companies the ability to choose which solution is needed, whether it is for more data analytics and cyber security (Digital) or Human Resources and Accounting (Enterprise). Combined with the iFlex working structure, ISG transformed the business model.ISG NEXT. Management discussed the ISG NEXT model as being a step forward financially for the Company going forward, as they are targeting a 400 basis points increase in their EBITDA margin over 2021-2022, with 2021 already providing roughly 300 basis points. The model is also driving productivity results, with a consultant utilization increase of 300 basis points to a 74% rate in 2021, with the expectation of 77-78% in the future. This rate has seen an increase of a little over 900 basis points since the introduction of iFlex over 18 months ago.Acquisition Potential. Pointed out in the presentation was the potential for future acquisitions as part of the capital allocation plan, with management citing these bolt on acquisitions as a "string of pearls" strategy to enhance the Company's capabilities. We believe that the rising cash on hand, reduced debt levels, and the Company's willingness to take on more debt all increase the likelihood of an acquisition in the near future.Maintaining Outperform and $11 PT. We are maintaining our Outperform rating and our 12-month price target for III shares of $11.00. At our price target, III shares would trade at 22.9x our adjusted 2022 EPS, 14.3x our 2022 adjusted EBITDA, and 2.1x our 2022 revenue estimate. These multiples compare to a peer group average of 20.9x 2022 consensus earnings, 13.5x 2022 consensus EBITDA, and 2.1x 2022 consensus revenue. Read More >>