ServiceNow, Roper Technologies and Nutanix featured in Zacks Industry Outlook Analysis.

Today, Zacks Equity Research discussed the performance of companies in the IT services industry, specifically ServiceNow, Roper Technologies, and Nutanix. These companies have been navigating challenging macroeconomic conditions, with uncertain environments affecting the adoption of transaction processing and query solutions. Despite these challenges, the digitalization efforts happening globally have benefited companies like ServiceNow, Roper Technologies, and Nutanix. The industry as a whole is experiencing growth driven by strong spending on cloud, Internet of Things (IoT), cybersecurity, data and analytics, artificial intelligence (AI), and automation. Additionally, the demand for advanced IT services infrastructure solutions for hybrid work and digital healthcare has boosted the prospects of these industry participants.

The Zacks Computers – IT Services industry is comprised of companies that offer consulting, communications software and services, IT management and operations, cloud-based web development platform, customer relationship management, professional information solutions, information and real estate analysis, and outsourcing services to a wide range of end markets. The industry is focusing on cybersecurity, cloud computing, generative AI, IoT, and automation to drive growth and help companies with their digital transformation efforts.

One of the key factors shaping the future of the IT services industry is the wave of digitalization, as companies are modernizing their traditional business processes to integrate emerging technologies like cloud, IoT, AI, and analytics. The hybrid work environment is also expected to boost industry growth due to an increasing number of hybrid workers seeking flexible and adaptable solutions. Additionally, improving IT spending trends are creating opportunities for industry participants, as Gartner projects a significant increase in IT spending in the coming years.

Despite the positive outlook for the industry, the Zacks Industry Rank for Computers – IT Services currently sits at #143, indicating a bearish near-term outlook. However, the industry has outperformed the S&P 500 sector and the broader Zacks Computer and Technology sector over the past year. The industry assessment based on the trailing 12-month EV/EBITDA ratio shows that the industry is currently trading at 42.01X, higher than the S&P 500 and sector averages.

In terms of specific stock recommendations, Nutanix, Roper Technologies, and ServiceNow are highlighted as top picks. Nutanix, a Zacks Rank #1 (Strong Buy) company, is benefiting from the adoption of its hybrid cloud solutions and is expected to see long-term growth in the hyperconverged infrastructure market. Roper Technologies, a Zacks Rank #2 (Buy), is experiencing momentum in various businesses and has a positive earnings outlook for 2024. ServiceNow, also a Zacks Rank #2 company, is seeing adoption of its workflows in companies undergoing digital transformation and has a positive earnings estimate for 2024.

Overall, despite the challenges faced by the IT services industry, companies like ServiceNow, Roper Technologies, and Nutanix are well-positioned to benefit from the ongoing digital transformation trends and increasing IT spending. Investors may want to consider these stocks for their portfolios based on their growth prospects and positive earnings outlook.

Article Source
https://finance.yahoo.com/news/zacks-industry-outlook-highlights-servicenow-105800248.html