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The Zacks Computers – IT Services industry participants are suffering from challenging macroeconomic conditions that are elongating the sales cycle. The adoption of consultation and transaction processing solutions has been affected by an uncertain macroeconomic environment. Higher tariffs are expected to hurt prospects. However, industry players like Vertiv, Roper Technologies and Jack Henry & Associates have been benefiting from ongoing digitization efforts globally.
Robust spending on cloud, Internet of Things (IoT), cyber security, data and analytics, artificial intelligence (AI) and automation is driving industry-wide growth. Solid demand for advanced IT-service infrastructure solutions for hybrid working and digital healthcare has been benefiting the prospects of industry participants. Improving IT spending trends bode well for these players.
Industry Description
The Zacks Computers – IT Services industry comprises companies that provide consultancy, communications software and services, IT management and operations, cloud-based web development platform, customer relationship management, professional information solutions, real estate information and analysis, and outsourcing services. Industry participants cater to a wide array of end markets, including manufacturing, telecommunications, banking, insurance, healthcare, government agencies and public sector institutions.
They focus on the cybersecurity business, the cloud computing market, generative AI, IoT and automation to bolster prospects. Offerings from industry participants help improve engagement with customers, launch products and support new business models, with enterprises going for digital transformation.
What's Shaping the Future of the Computers - IT Services Industry
Digitization Wave is a Tailwind: Most industry participants are modernizing their traditional legacy-oriented business processes to keep pace with evolving IT services. The aim is to integrate the coordination of emerging technologies, including cloud, IoT, AI and analytics. Increasing Internet penetration in emerging markets, particularly across the Asia Pacific, is another tailwind.
Hybrid Work Environment to Boost Prospects: The industry’s growth is expected to accelerate in the days ahead due to an increasing number of hybrid workers. In this era of digital transformation, enterprises are actively seeking a common ground between on-premise and cloud infrastructures, which will enable them to provide flexible and easily adaptable hybrid solutions.
Improving IT Spending to Aid Prospects: Improving IT spending trends bode well for industry participants. Gartner projects IT spending to increase 13.5% over 2025’s figure of $5.54 trillion to $6.32 trillion in 2026. Spending on IT services is expected to see an 9% improvement for 2026.
Zacks Industry Rank Indicates Dim Prospects
The Zacks Computers - IT Services is housed within the broader Zacks Computer and Technology Sector. It currently carries a Zacks Industry Rank #192, which places it in the bottom 22% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates bullish near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
The industry’s position in the bottom 50% of the Zacks-ranked industries is a result of a negative earnings outlook for the constituent companies in aggregate. The aggregate earnings estimate revisions show that analysts are pessimistic about this group’s earnings growth potential. Since Feb. 28, 2026, the industry’s earnings estimate for the current year has decreased by a penny.
Given the industry’s bearish prospects, there are few stocks worth buying. But before we present the stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Lags Sector and S&P 500
The Zacks Computers - IT Services Industry has underperformed the S&P 500 and the broader Zacks Computer and Technology sector in the past year.
The industry has dropped 25.9% over this period compared with the S&P 500’s and the broader sector’s return of 30.7% and 53.3%, respectively.
Industry's Current Valuation
On the basis of the forward 12-month price/earnings, which is a commonly used multiple for valuing IT Services companies, the industry is currently trading at 18.91X, lower than the S&P 500’s 21.99X and the sector’s 26.35X.
Over the past five years, the industry has traded as high as 39.97X and as low as 18.04X, with the median being 28.09X.
Vertiv is benefiting from an extensive product portfolio, which spans thermal systems, liquid cooling, UPS, switchgear, busbar and modular solutions, which is noteworthy. The company is also benefiting from the accelerating digital transformation driven by AI and data center demand. For 2026, revenues are now expected to be between $13.5 billion and $14 billion. Organic net sales growth is expected to be between 29% and 31%.
The Zacks Consensus Estimate for VRT’s 2026 earnings is pegged at $6.36 per share, down 0.9% over the past 30 days. The consensus mark indicates 51.4% growth from the figure reported in the year-ago quarter.
Roper Technologies: This Zacks Rank #2 company is benefiting from momentum across the Deltek, Vertafore, PowerPlan and Aderant businesses, which are aiding the Application Software segment. Solid performance of the ConstructConnect, Subsplash and SoftWriters businesses is boosting the Network Software segment’s performance. Strength across the Neptune and NDI businesses augurs well for the Technology Enabled Products unit.
For 2026, Roper expects adjusted earnings from continuing operations in the range of $21.80-$22.05 per share compared with $21.30-$21.55 projected earlier. Total revenues are expected to increase approximately 8%. Organic revenues are anticipated to increase 5-6% from the year-ago number.
For 2026, the consensus mark for earnings has been steady at $21.94 per share, which suggests 9.7% growth from the figure reported in the year-ago period. Roper shares have decreased 24% year to date.
Jack Henry & Associates: This Zacks Rank #2 company is benefiting from growing services, support and processing revenues. Cloud revenues are now about a third of total revenues, and recurring revenues remain the core mix. Growing digital, card and faster payment processing continues to lift transaction-based revenues. Core win momentum and a higher mix of integrated trifecta deals are deepening client relationships and expanding wallet share.
For fiscal 2026, Jack Henry & Associates’ non-GAAP revenues are estimated in the range of $2.479-$2.491 billion, up from the earlier band of $2.474-$2.491 billion.
The Zacks Consensus Estimate for Jack Henry & Associates’ fiscal 2027 earnings has increased by 1.4% to $6.84 per share over the past 30 days. The consensus mark suggests 9.6% growth from the figure reported in the year-ago period.
Shares of Jack Henry & Associates have declined 25.8% year to date.
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Industry Outlook Highlights Vertiv, Roper and Jack Henry & Associates
For Immediate Release
Chicago, IL – June 5, 2026 – Today, Zacks Equity Research Vertiv (VRT - Free Report) , Roper Technologies (ROP - Free Report) and Jack Henry & Associates (JKHY - Free Report) .
Industry: IT Services
Link: https://www.zacks.com/commentary/2932423/3-it-services-stocks-to-buy-right-now-from-a-challenging-industry
The Zacks Computers – IT Services industry participants are suffering from challenging macroeconomic conditions that are elongating the sales cycle. The adoption of consultation and transaction processing solutions has been affected by an uncertain macroeconomic environment. Higher tariffs are expected to hurt prospects. However, industry players like Vertiv, Roper Technologies and Jack Henry & Associates have been benefiting from ongoing digitization efforts globally.
Robust spending on cloud, Internet of Things (IoT), cyber security, data and analytics, artificial intelligence (AI) and automation is driving industry-wide growth. Solid demand for advanced IT-service infrastructure solutions for hybrid working and digital healthcare has been benefiting the prospects of industry participants. Improving IT spending trends bode well for these players.
Industry Description
The Zacks Computers – IT Services industry comprises companies that provide consultancy, communications software and services, IT management and operations, cloud-based web development platform, customer relationship management, professional information solutions, real estate information and analysis, and outsourcing services. Industry participants cater to a wide array of end markets, including manufacturing, telecommunications, banking, insurance, healthcare, government agencies and public sector institutions.
They focus on the cybersecurity business, the cloud computing market, generative AI, IoT and automation to bolster prospects. Offerings from industry participants help improve engagement with customers, launch products and support new business models, with enterprises going for digital transformation.
What's Shaping the Future of the Computers - IT Services Industry
Digitization Wave is a Tailwind: Most industry participants are modernizing their traditional legacy-oriented business processes to keep pace with evolving IT services. The aim is to integrate the coordination of emerging technologies, including cloud, IoT, AI and analytics. Increasing Internet penetration in emerging markets, particularly across the Asia Pacific, is another tailwind.
Hybrid Work Environment to Boost Prospects: The industry’s growth is expected to accelerate in the days ahead due to an increasing number of hybrid workers. In this era of digital transformation, enterprises are actively seeking a common ground between on-premise and cloud infrastructures, which will enable them to provide flexible and easily adaptable hybrid solutions.
Improving IT Spending to Aid Prospects: Improving IT spending trends bode well for industry participants. Gartner projects IT spending to increase 13.5% over 2025’s figure of $5.54 trillion to $6.32 trillion in 2026. Spending on IT services is expected to see an 9% improvement for 2026.
Zacks Industry Rank Indicates Dim Prospects
The Zacks Computers - IT Services is housed within the broader Zacks Computer and Technology Sector. It currently carries a Zacks Industry Rank #192, which places it in the bottom 22% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates bullish near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
The industry’s position in the bottom 50% of the Zacks-ranked industries is a result of a negative earnings outlook for the constituent companies in aggregate. The aggregate earnings estimate revisions show that analysts are pessimistic about this group’s earnings growth potential. Since Feb. 28, 2026, the industry’s earnings estimate for the current year has decreased by a penny.
Given the industry’s bearish prospects, there are few stocks worth buying. But before we present the stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Lags Sector and S&P 500
The Zacks Computers - IT Services Industry has underperformed the S&P 500 and the broader Zacks Computer and Technology sector in the past year.
The industry has dropped 25.9% over this period compared with the S&P 500’s and the broader sector’s return of 30.7% and 53.3%, respectively.
Industry's Current Valuation
On the basis of the forward 12-month price/earnings, which is a commonly used multiple for valuing IT Services companies, the industry is currently trading at 18.91X, lower than the S&P 500’s 21.99X and the sector’s 26.35X.
Over the past five years, the industry has traded as high as 39.97X and as low as 18.04X, with the median being 28.09X.
3 IT Services Stocks to Buy Right Now
Vertiv: This Zacks Rank #2 (Buy) company’s shares have jumped 94% year to date. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Vertiv is benefiting from an extensive product portfolio, which spans thermal systems, liquid cooling, UPS, switchgear, busbar and modular solutions, which is noteworthy. The company is also benefiting from the accelerating digital transformation driven by AI and data center demand. For 2026, revenues are now expected to be between $13.5 billion and $14 billion. Organic net sales growth is expected to be between 29% and 31%.
The Zacks Consensus Estimate for VRT’s 2026 earnings is pegged at $6.36 per share, down 0.9% over the past 30 days. The consensus mark indicates 51.4% growth from the figure reported in the year-ago quarter.
Roper Technologies: This Zacks Rank #2 company is benefiting from momentum across the Deltek, Vertafore, PowerPlan and Aderant businesses, which are aiding the Application Software segment. Solid performance of the ConstructConnect, Subsplash and SoftWriters businesses is boosting the Network Software segment’s performance. Strength across the Neptune and NDI businesses augurs well for the Technology Enabled Products unit.
For 2026, Roper expects adjusted earnings from continuing operations in the range of $21.80-$22.05 per share compared with $21.30-$21.55 projected earlier. Total revenues are expected to increase approximately 8%. Organic revenues are anticipated to increase 5-6% from the year-ago number.
For 2026, the consensus mark for earnings has been steady at $21.94 per share, which suggests 9.7% growth from the figure reported in the year-ago period. Roper shares have decreased 24% year to date.
Jack Henry & Associates: This Zacks Rank #2 company is benefiting from growing services, support and processing revenues. Cloud revenues are now about a third of total revenues, and recurring revenues remain the core mix. Growing digital, card and faster payment processing continues to lift transaction-based revenues. Core win momentum and a higher mix of integrated trifecta deals are deepening client relationships and expanding wallet share.
For fiscal 2026, Jack Henry & Associates’ non-GAAP revenues are estimated in the range of $2.479-$2.491 billion, up from the earlier band of $2.474-$2.491 billion.
The Zacks Consensus Estimate for Jack Henry & Associates’ fiscal 2027 earnings has increased by 1.4% to $6.84 per share over the past 30 days. The consensus mark suggests 9.6% growth from the figure reported in the year-ago period.
Shares of Jack Henry & Associates have declined 25.8% year to date.
Free: Instant Access to Zacks' Market-Crushing Strategies
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can tap into those powerful strategies – and the high-potential stocks they uncover – free. No strings attached.
Get all the details here >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.