Information Services Group, Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

The investors in Information Services Group, Inc.'s (NASDAQ:III) will be rubbing their hands together with glee today, after the share price leapt 21% to US$4.82 in the week following its quarterly results. Revenues were US$60m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.03, an impressive 140% ahead of estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Our free stock report includes 3 warning signs investors should be aware of before investing in Information Services Group. Read for free now.

Following last week's earnings report, Information Services Group's four analysts are forecasting 2025 revenues to be US$240.6m, approximately in line with the last 12 months. Statutory earnings per share are forecast to dive 25% to US$0.12 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$238.5m and earnings per share (EPS) of US$0.095 in 2025. Although the revenue estimates have not really changed, we can see there's been a very substantial lift in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

See our latest analysis for Information Services Group

The consensus price target rose 11% to US$5.83, suggesting that higher earnings estimates flow through to the stock's valuation as well. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Information Services Group at US$7.00 per share, while the most bearish prices it at US$5.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 1.3% annualised decline to the end of 2025. That is a notable change from historical growth of 0.7% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 10% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Information Services Group is expected to lag the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Information Services Group's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Information Services Group analysts - going out to 2027, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 3 warning signs for Information Services Group you should be aware of, and 1 of them is a bit unpleasant.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.