Gartner (IT) AI Stock Analysis

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Gartner

(NYSE:IT)

78Outperform

Gartner's strong financial performance and positive earnings call sentiment drive its solid stock score. The company's robust revenue and profit growth, along with effective cash flow management, position it well for future growth. However, high liabilities and a moderately high valuation present potential risks. Technical analysis suggests a cautious outlook due to mixed signals.

Positive Factors

Business Metrics

There is an early positive inflection in new business metrics, showing growth in both tech and non-tech research areas.

Financial Guidance

2024 guidance for Gartner has been increased, reflecting confidence in future performance.

Management Strategy

Gartner has a proven management strategy leading to capital-efficient and good organic growth.

Negative Factors

Macro Uncertainty

There is an expectation for Gartner to likely lower its revenue guidance due to the macroeconomic slowdown.

Revenue Guidance

Guidance was below expectations on rev/adj. EBITDA/adj. EPS/and FCF by 3%/9%/13%/18%.

Web Traffic

Gartner's web traffic has significantly decreased, which is a concerning indicator for future Contract Value growth.

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

Market Cap

$32.94B

Dividend YieldN/A

Average Volume (3M)771.51K

Price to Earnings (P/E)26.6

Beta (1Y)1.17

Revenue Growth6.10%

EPS Growth44.57%

CountryUS

Employees21,044

SectorTechnology

Sector Strength67

IndustryInformation Technology Services

Share Statistics

EPS (TTM)2.98

Shares Outstanding77,059,204

10 Day Avg. Volume513,354

30 Day Avg. Volume771,508

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.18

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit6.18

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$474.43

Price Target Upside11.11% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering7

Gartner Business Overview & Revenue Model

Company DescriptionGartner, Inc. is a leading global research and advisory company that provides insights, advice, and tools for leaders in IT, finance, human resources, customer service, and other business functions. Founded in 1979 and headquartered in Stamford, Connecticut, Gartner operates in various sectors, offering research and analysis services, events, and consulting. Its core products and services include providing critical insights and advice to help organizations make informed decisions across different industries.

How the Company Makes MoneyGartner generates revenue primarily through its research and advisory services, which include subscription-based access to its vast repository of research content, data, and insights. The company also earns significant income from its consulting services, where it provides targeted advice and solutions to businesses based on their specific needs. Additionally, Gartner hosts events and symposia around the world, which serve as a substantial revenue stream by offering sponsorship, exhibitor opportunities, and ticket sales to attendees. Gartner’s client base consists of large enterprises, government agencies, technology companies, and investment firms, which rely on its expertise to navigate complex business environments. Key revenue streams include subscription fees, consulting engagement fees, and event-related revenues. Strategic partnerships and its extensive research capabilities significantly bolster Gartner's ability to generate consistent 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 its steady growth trajectory, reflecting strong demand and effective execution. Conferences have rebounded impressively, with recent quarters showing significant gains, aligning with the earnings call's highlight of a 17% revenue increase in Q4 2024. Consulting also shows resilience, with recent improvement after a period of stagnation, supported by a 19% revenue increase in Q4 2024. Despite external challenges like geopolitical tensions and currency fluctuations, Gartner's strategic focus on growth and investment positions it well for 2025, with a positive outlook across all segments.

Data provided by:

Main Street Data

Gartner Financial Statement Overview

Summary

Gartner demonstrates strong financial health with consistent revenue and profit growth, efficient operational management, and improving leverage ratios. High liabilities remain a concern, but solid cash flow generation supports financial stability and growth potential.

Income Statement

―

Gartner has demonstrated strong revenue growth with a significant increase from $5.91 billion in 2023 to $6.27 billion in 2024. The gross profit margin remains high, reflecting efficient cost management. The net profit margin has improved markedly, showing enhanced profitability. Strong EBIT and EBITDA margins further emphasize operational efficiency. Overall, the income statement reflects a robust performance with consistent improvements over the years.

Balance Sheet

The balance sheet shows a healthy equity position with significant growth in stockholders' equity from $680.63 million in 2023 to $1.36 billion in 2024. The debt-to-equity ratio has improved significantly, indicating better leverage management. While the equity ratio has increased, the company still has a relatively high level of total liabilities compared to assets, which could pose a risk if not managed carefully.

Cash Flow

―

Gartner's cash flow statement highlights robust free cash flow growth, supported by strong operating cash flows. The operating cash flow to net income ratio is favorable, indicating efficient cash conversion. The free cash flow to net income ratio is strong, showcasing the company's ability to generate free cash flow relative to its net income. Overall, the cash flow position is solid, supporting ongoing financial stability and potential investment opportunities.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
6.27B	5.91B	5.48B	4.73B	4.10B
	Gross Profit
6.27B	4.00B	3.78B	3.29B	2.75B
	EBIT
1.16B	1.24B	1.10B	915.75M	490.12M
	EBITDA
1.72B	1.47B	1.35B	1.35B	765.68M
	Net Income Common Stockholders
1.25B	882.47M	807.80M	793.56M	266.75M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.93B	1.32B	698.00M	756.49M	712.58M
	Total Assets
8.53B	7.84B	7.30B	7.42B	7.32B
	Total Debt
339.78M	3.07B	3.16B	3.25B	2.84B
	Net Debt
-1.59B	1.75B	2.46B	2.49B	2.13B
	Total Liabilities
7.18B	7.16B	7.07B	7.05B	6.23B
	Stockholders Equity
1.36B	680.63M	227.80M	371.06M	1.09B
Cash Flow		Free Cash Flow
1.38B	1.05B	993.37M	1.25B	819.39M
	Operating Cash Flow
1.48B	1.16B	1.10B	1.31B	903.28M
	Investing Cash Flow
-103.74M	54.16M	-117.56M	-80.47M	-83.89M
	Financing Cash Flow
-710.14M	-588.88M	-1.03B	-1.16B	-416.22M

Gartner Technical Analysis

Technical Analysis Sentiment

Negative

Last Price426.98

Price Trends

50DMA

434.76

Negative

100DMA

472.79

Negative

200DMA

488.39

Negative

Market Momentum

MACD

-1.47

Negative

RSI

55.17

Neutral

STOCH

86.26

Negative

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 426.98 is above the 20-day moving average (MA) of 406.92, below the 50-day MA of 434.76, and below the 200-day MA of 488.39, indicating a neutral trend. The MACD of -1.47 indicates Negative momentum. The RSI at 55.17 is Neutral, neither overbought nor oversold. The STOCH value of 86.26 is Negative, 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 0 New Risks

Gartner Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
INFY	80 Outperform	$74.10B	23.44	29.00%	2.32%	3.85%	-0.38%
IT	78 Outperform	$32.94B	26.63	122.93%	―	6.10%	44.57%
ACN	77 Outperform	$191.14B	25.19	27.26%	1.88%	4.10%	9.78%
CTSH	76 Outperform	$38.30B	16.36	16.61%	1.56%	4.09%	14.05%
EPAM	73 Outperform	$9.08B	20.29	12.80%	―	0.80%	10.05%
WIT	67 Neutral	$30.08B	19.52	16.91%	2.12%	-2.83%	106.18%
Sector *	60 Neutral	$10.93B	10.46	-6.70%	2.99%	7.54%	-12.22%

* Technology Sector Average

Performance Comparison

Gartner

426.98

-10.15

-2.32%

ACN

Accenture

307.71

2.48

0.81%

CTSH

Cognizant

77.91

11.29

16.95%

EPAM

Epam Systems

159.12

-90.42

-36.23%

INFY

Infosys

17.85

1.19

7.14%

WIT

Wipro

2.90

0.20

7.41%

Gartner Earnings Call Summary

Earnings Call Date:May 06, 2025

(Q1-2025)

% Change Since: -22.06%|

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.

Spark’s Take on IT Stock

According to Spark, TipRanks’ AI Analyst, IT is a Outperform.

Gartner scores well overall, driven by robust financial performance, positive earnings call sentiment, and strong cash flow. High liabilities and valuation metrics present some risks. Technical indicators suggest caution, but the company’s outlook remains positive.

To see Spark’s full report on IT stock, click here.

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.