IHS Markit (NYSE:INFO) is a London-based global information provider. Shares of IHS Markit have climbed 57% year-over-year as of close on January 28.
The stock has increased 5.8% over the past month, receiving a boost from its fourth quarter and full-year earnings release.
Though we live in the "Information Age", the information market is often overlooked. A recent report from Technavio projected that the global business information market would post a compound annual growth rate (CAGR) of 5% from 2019 to 2023. The financialization of developed economies will see demand for market research increase in the years and decades to come.
In the fourth quarter, IHS Markit reported adjusted earnings per share of $0.65 which blew away analyst expectations. Total revenues rose 5% year-over-year to $1.12 billion. Adjusted EBITDA climbed 8.6% from the prior year to $452.9 million, with its adjusted EBITDA margin improving by 130 basis points to 40.4%.
For fiscal 2020, the company is forecasting revenues between $4.52 billion and $4.59 billion. It expects organic growth between 5% and 6%. IHS Markit also projects adjusted earnings per share to come in between $2.82 and $2.88.
IHS Markit stock has outperformed the broader information services market. However, the company is moving forward with high levels of debt. Its middling balance sheet is reason enough for investors to be concerned as the stock is trading close to a 52-week high.
I like the company and the sector going forward, but value investors may want to look elsewhere in early 2020.
