Gartner (IT) AI Stock Analysis

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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)

Market Cap

$33.74B

Dividend YieldN/A

Average Volume (3M)509.41K

Price to Earnings (P/E)27.3

Beta (1Y)1.13

Revenue Growth5.99%

EPS Growth59.74%

CountryUS

Employees21,107

SectorTechnology

Sector Strength78

IndustryInformation Technology Services

Share Statistics

EPS (TTM)2.98

Shares Outstanding76,966,934

10 Day Avg. Volume449,425

30 Day Avg. Volume509,408

Financial Highlights & Ratios

PEG Ratio107.65

Price to Book (P/B)22.34

Price to Sales (P/S)0.00

P/FCF Ratio22.12

Enterprise Value/Market Cap1.01

Enterprise Value/Revenue1.37

Enterprise Value/Gross Profit8.02

Enterprise Value/Ebitda5.30

Forecast

1Y Price Target

$482.50

Price Target Upside10.07% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering9

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

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

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

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

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.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
6.33B	6.27B	5.91B	5.48B	4.73B	4.10B
	Gross Profit
4.24B	4.24B	4.00B	3.78B	3.29B	2.75B
	EBIT
1.15B	1.16B	1.24B	1.10B	915.75M	490.12M
	EBITDA
1.74B	1.77B	1.47B	1.35B	1.35B	765.68M
	Net Income Common Stockholders
1.25B	1.25B	882.47M	807.80M	793.56M	266.75M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.09B	1.93B	1.32B	698.00M	756.49M	712.58M
	Total Assets
8.48B	8.53B	7.84B	7.30B	7.42B	7.32B
	Total Debt
2.79B	2.90B	3.07B	3.16B	3.25B	2.84B
	Net Debt
694.45M	966.86M	1.75B	2.46B	2.49B	2.13B
	Total Liabilities
6.98B	7.18B	7.16B	7.07B	7.05B	6.23B
	Stockholders Equity
1.50B	1.36B	680.63M	227.80M	371.06M	1.09B
Cash Flow		Free Cash Flow
1.50B	1.38B	1.05B	993.37M	1.25B	819.39M
	Operating Cash Flow
1.61B	1.48B	1.16B	1.10B	1.31B	903.28M
	Investing Cash Flow
-104.65M	-103.74M	54.16M	-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

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
INFY	81 Outperform	$76.39B	23.74	29.00%	2.29%	3.85%	-0.38%
IT	80 Outperform	$33.74B	27.27	113.19%	―	5.99%	59.74%
ACN	77 Outperform	$193.81B	25.55	27.26%	1.85%	4.10%	9.78%
CTSH	76 Outperform	$39.00B	16.66	16.61%	1.53%	4.09%	14.05%
EPAM	74 Outperform	$9.97B	24.60	11.57%	―	4.72%	-3.06%
WIT	67 Neutral	$30.45B	19.25	16.62%	2.15%	-2.83%	106.18%
Sector *	61 Neutral	$11.28B	10.16	-6.88%	2.97%	7.41%	-8.93%

* Technology Sector Average

Performance Comparison

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.