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March 2018
IT Consulting
Sectorwatch
The IT Consulting industry is composed of companies that help businesses design and implement information technology (IT) systems and infrastructure. Due to the low capital requirements of the industry, a modest number of operators are small nonemployers or independent contractors. Shifting technological trends such as the emergence of cloud technologies and data analytics are driving larger operators to acquire smaller companies and develop new products to stay relevant. This is driving demand for new services, expanding the scope of traditional consulting.
Industry Trends:
- Current revenue growth rate is less than the average of the last 3 years, indicating that the market may be flattening or declining
- Current gross profit margin exceeds the average of the last 3 years gross profit margin, indicating supplier pricing power
- Current EBITDA margin is less than the average of the last 3 years EBITDA margins, which may signal further consolidation
