Information Services Group Inc. (III) stock analysis

P/E above its 5-year median

Information Services's P/E of 26.1 is above its own 5-year median of 21.7.

P/E above the industry

Information Services's P/E of 26.1 is above the Management and Public Relations Services median of 21.9.

EV/EBITDA above its 5-year median

Information Services's EV/EBITDA of 12.5 is above its 5-year median of 11.7.

P/B above the industry

Information Services's price-to-book of 3.21 is above the Management and Public Relations Services median of 2.31.

Trading above fair value

The share price of $6.27 is above our fair value estimate of $5.23.

Margin of safety under 20%

The price is 19.9% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew -5.1% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -21.3% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew 22.8% over the last twelve months, against a 5-year average of 27.7% a year.

Growing slower than the industry

Revenue grew 4.8% over the last twelve months; the Management and Public Relations Services median is 7.2%.

Guidance issued

The latest outlook (fourth-quarter revenues, Nov 2, 2026) was issued for the first time, so it neither adds nor takes away points.

Gross margin improving

Gross margin was 45.2% over the last twelve months, against 42.2% a year earlier.

Return on equity under 15%

Return on equity was 12.7% over the last twelve months and averaged 10.9% over five years; we look for 15% on both.

Return on capital over 10%

Return on invested capital was 10.9%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Information Services's return on equity of 12.7% is above the Management and Public Relations Services median of 0.4%.

Earnings grew over 5 years

Net income grew 27.7% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 4.7% over the last twelve months, against a 5-year average of 3.9%.

Net margin above the industry

Information Services's net margin of 4.7% is above the Management and Public Relations Services median of 0.2%.

High debt

Debt is 62.6% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 78.5% five years ago to 62.6%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 36.9% of total debt.

Interest well covered

Operating income covers interest expense 6.2 times.

Short-term assets cover short-term debts

Current assets are 2.80 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.99; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Information Services paid dividends worth 2.9% of the share price over the last twelve months.

Yield below Treasuries

The 2.9% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Information Services yields 2.9%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 5 fiscal years.

Covered by earnings

Dividends take 76.6% of net income.

Covered by free cash flow

Dividends take 48.4% of free cash flow.