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Gartner (IT)
NYSE:IT

Gartner (IT) AI Stock Analysis

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IT

Gartner

(NYSE:IT)

Rating:80Outperform
Price Target:
$504.00
▲( 14.97% Upside)
Gartner's overall stock score is driven by strong financial performance and positive earnings call outcomes, indicating robust growth and profitability. While technical indicators suggest bullish momentum, high valuation metrics and macroeconomic challenges present potential risks. The company’s strategic focus on expanding sales and optimizing contracts highlights proactive growth management.
Positive Factors
Cost Management
Strong cost control drove sizable beats across adjusted EBITDA, margin, and adjusted EPS.
Tech Vendor Performance
Technology vendors were a bright spot, with CV growth among these clients improving for the fourth consecutive quarter.
Negative Factors
Revenue Guidance
Full-year revenue guidance was lowered, primarily reflecting weakness across research, conferences, and consulting.
Sales Environment
A softer selling environment and elevated macroeconomic uncertainty led management to lower its full-year revenue outlook.

Gartner (IT) vs. SPDR S&P 500 ETF (SPY)

Gartner Business Overview & Revenue Model

Company DescriptionGartner, Inc. is a leading research and advisory company specializing in providing insights, advice, and tools for leaders in IT, finance, human resources, customer service, and supply chain functions within organizations. The company operates in several sectors, including IT, marketing, and legal, offering core services that include research, consulting, and conferences to help clients make informed decisions and stay ahead of market trends.
How the Company Makes MoneyGartner makes money primarily through its research and advisory services, which provide clients with access to proprietary research, data, and expert advice. The company's revenue model is based on subscription fees for access to its research content and advisory services. Key revenue streams include research subscriptions, consulting engagements, and conference fees. Gartner's consulting services offer customized solutions to address specific client challenges, while its conferences provide networking opportunities and insights into industry trends. Partnerships with industry leaders, as well as a strong reputation for delivering high-quality, actionable insights, also contribute significantly to its earnings.

Gartner Key Performance Indicators (KPIs)

Any
Any
Gross Contribution by Segment
Gross Contribution by Segment
Assesses the total profit generated by each segment before fixed costs, indicating the core profitability and financial health of individual business areas.
Chart InsightsGartner's Research segment continues to be a strong performer, with consistent growth in gross contribution, aligning with a 7% increase in contract value. The Conferences segment shows volatility but recent growth aligns with a 12% revenue increase, reflecting successful execution. Consulting's steady contribution growth is supported by a 5% revenue rise and a 16% backlog increase. Despite macroeconomic challenges and U.S. federal contract issues, Gartner's strategic focus on expanding sales headcount and optimizing contracts positions it well for future growth, aiming for a 12-16% CV growth as conditions normalize.
Data provided by:Main Street Data

Gartner Financial Statement Overview

Summary
Gartner exhibits strong financial health with robust revenue and profit growth, effective cost management, and efficient cash flow generation. Although the company is highly leveraged, it is gradually improving its equity position, enhancing financial stability. Overall, Gartner is well-positioned for continued growth and profitability in the information technology services industry.
Income Statement
85
Very Positive
Gartner has demonstrated strong revenue growth with a TTM increase of 6.7% compared to the previous year. Gross profit margin stands at a robust 67% TTM, indicating efficient production and service delivery. Net profit margin is impressive at 19.8% TTM, reflecting effective cost control. The EBIT and EBITDA margins are healthy at 18.2% and 27.6% TTM respectively, showcasing operational efficiency. Overall, the company shows strong profitability and growth trends.
Balance Sheet
75
Positive
The debt-to-equity ratio is high at 1.86 TTM, suggesting significant leverage, though it has decreased from previous years. Return on equity is strong at 83.7% TTM, indicating efficient use of equity. The equity ratio is relatively low at 17.7% TTM, reflecting high leverage but an improvement over previous periods. The balance sheet shows a trend of improving equity and decreasing debt levels.
Cash Flow
80
Positive
Operating cash flow to net income ratio is strong at 1.28 TTM, indicating good cash generation relative to net income. Free cash flow has grown by 8.8% TTM, reflecting robust cash flow generation. The free cash flow to net income ratio is healthy at 1.20 TTM, illustrating effective cash conversion. The company demonstrates strong cash flow management with consistent growth.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
6.33B6.27B5.91B5.48B4.73B4.10B
Gross Profit
4.24B4.24B4.00B3.78B3.29B2.75B
EBIT
1.15B1.16B1.24B1.10B915.75M490.12M
EBITDA
1.74B1.77B1.47B1.35B1.35B765.68M
Net Income Common Stockholders
1.25B1.25B882.47M807.80M793.56M266.75M
Balance SheetCash, Cash Equivalents and Short-Term Investments
2.09B1.93B1.32B698.00M756.49M712.58M
Total Assets
8.48B8.53B7.84B7.30B7.42B7.32B
Total Debt
2.79B2.90B3.07B3.16B3.25B2.84B
Net Debt
694.45M966.86M1.75B2.46B2.49B2.13B
Total Liabilities
6.98B7.18B7.16B7.07B7.05B6.23B
Stockholders Equity
1.50B1.36B680.63M227.80M371.06M1.09B
Cash FlowFree Cash Flow
1.50B1.38B1.05B993.37M1.25B819.39M
Operating Cash Flow
1.61B1.48B1.16B1.10B1.31B903.28M
Investing Cash Flow
-104.65M-103.74M54.16M-117.56M-80.47M-83.89M
Financing Cash Flow
-643.40M-710.14M-588.88M-1.03B-1.16B-416.22M

Gartner Technical Analysis

Technical Analysis Sentiment
Negative
Last Price438.36
Price Trends
50DMA
423.42
Positive
100DMA
465.03
Negative
200DMA
486.29
Negative
Market Momentum
MACD
6.20
Negative
RSI
53.19
Neutral
STOCH
32.04
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IT, the sentiment is Negative. The current price of 438.36 is above the 20-day moving average (MA) of 436.56, above the 50-day MA of 423.42, and below the 200-day MA of 486.29, indicating a neutral trend. The MACD of 6.20 indicates Negative momentum. The RSI at 53.19 is Neutral, neither overbought nor oversold. The STOCH value of 32.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IT.

Gartner Risk Analysis

Gartner disclosed 30 risk factors in its most recent earnings report. Gartner reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
1.
We face risks related to the regulation of AI and other evolving technologies. Q4, 2024

Gartner Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
81
Outperform
$76.39B23.7429.00%2.29%3.85%-0.38%
ITIT
80
Outperform
$33.74B27.27113.19%5.99%59.74%
ACACN
77
Outperform
$193.81B25.5527.26%1.85%4.10%9.78%
76
Outperform
$39.00B16.6616.61%1.53%4.09%14.05%
74
Outperform
$9.97B24.6011.57%4.72%-3.06%
WIWIT
67
Neutral
$30.45B19.2516.62%2.15%-2.83%106.18%
61
Neutral
$11.28B10.16-6.88%2.97%7.41%-8.93%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
IT
Gartner
438.36
3.66
0.84%
ACN
Accenture
309.58
17.05
5.83%
CTSH
Cognizant
79.12
13.26
20.13%
EPAM
Epam Systems
175.95
-1.32
-0.74%
INFY
Infosys
18.11
1.26
7.48%
WIT
Wipro
2.86
0.22
8.33%

Gartner Earnings Call Summary

Earnings Call Date:May 06, 2025
(Q1-2025)
|
% Change Since: 2.67%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Neutral
Gartner delivered strong financial results and growth in key segments, outperforming expectations in revenue, free cash flow, and key business areas such as conferences and consulting. However, challenges with U.S. federal contracts and macroeconomic uncertainties have impacted parts of the business, leading to lengthened decision cycles and slight declines in new business sales growth.
Q1-2025 Updates
Positive Updates
Strong Financial Performance
First quarter revenue, EBITDA, EPS, and free cash flow were all ahead of expectations. First quarter revenue was $1.5 billion, up 4% year-over-year (6% FX neutral). Free cash flow was $288 million, up 73% compared to Q1 2024.
Growth in Key Segments
Research remains the largest and most profitable segment with contract value growing 7%. Global business sales (GBS) contract value increased 11%. Consulting revenue grew 5%, and consulting backlog increased 16%.
Conference and Consulting Success
Conference revenue grew 12% on the same conference basis FX neutral. Consulting revenue was up 5% FX neutral and contract optimization revenue grew robustly by 38% FX neutral.
Strong Cash Position and Shareholder Returns
Gartner has a strong balance sheet with about $2.1 billion of cash. They repurchased $163 million of stock in the quarter. The company plans to continue aggressive share repurchases.
Negative Updates
Challenges with U.S. Federal Contracts
The U.S. federal government represents approximately 4% of total contract value. Nearly 40% of U.S. federal contracts were transacted in Q1, and only half were renewed. Federal contract value decreased by $44 million.
Impact of Macroeconomic Factors
There is a high level of macroeconomic uncertainty affecting various sectors. Decision-making cycles have lengthened, particularly in areas impacted by tariffs and policy changes.
Slight Decline in New Business and Sales Growth
GTS new business was down 4% compared to last year. GBS new business was down 3% compared to last year.
Company Guidance
During Gartner's First Quarter 2025 Earnings Call, key financial metrics highlighted included a 7% year-over-year growth in contract value (CV), with research segment CV also growing 7%, and a notable 11% increase in Global Business Sales (GBS) CV. First quarter revenue reached $1.5 billion, marking a 4% increase as reported and 6% on a foreign exchange (FX) neutral basis. Adjusted EBITDA was $385 million, up 1% as reported and 3% FX neutral, while adjusted EPS rose 2% to $2.98. Free cash flow was strong at $288 million, a 73% increase from the previous year. The company's guidance for 2025 now anticipates research revenue of at least $5.34 billion, conferences revenue of at least $625 million, and consulting revenue of at least $575 million, reflecting cautious optimism amidst a dynamic macroeconomic environment. Gartner plans to grow sales headcount in the mid-single digits, excluding directly impacted areas, and aims to reaccelerate CV growth to 12-16% as the macro environment normalizes.

Gartner Corporate Events

Financial Disclosures
Gartner Reports Strong Q1 2025 Financial Results
Positive
May 6, 2025

On May 6, 2025, Gartner, Inc. reported its financial results for the first quarter of 2025, revealing a revenue increase of 4.2% to $1.5 billion, and a net income rise of 0.2% to $211 million. The company also highlighted a significant growth in operating cash flow by 66% and free cash flow by 73.3%, with a contract value growth of 7%. These results exceeded expectations, and Gartner continues to manage costs effectively while investing in future growth, positioning itself strongly in the market.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.