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Gartner (IT)
NYSE:IT
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Gartner
(NYSE:IT)75Outperform
Positive Factors
Earnings
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
Web Traffic
Web traffic was significantly lower at -20% compared to -12% in the previous quarter.
Gartner (IT) vs. S&P 500 (SPY)
Market Cap
$37.03B
Dividend YieldN/A
Average Volume (3M)492.41K
Price to Earnings (P/E)30.1
Beta (1Y)1.30
Revenue Growth6.10%
EPS Growth44.57%
CountryUS
Employees21,044
SectorTechnology
Sector Strength48
IndustrySoftware
Share Statistics
EPS (TTM)16.03
Shares Outstanding76,818,190
10 Day Avg. Volume501,121
30 Day Avg. Volume492,409
Financial Highlights & Ratios
PEG Ratio0.67
Price to Book (P/B)N/A
Price to Sales (P/S)6.02
Price to Cash Flow (P/CF)28.10
P/FCF Ratio28.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$573.00Price Target Upside16.87% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
Gartner Business Overview & Revenue Model
Company DescriptionGartner, Inc. is a research and advisory company, which delivers technology-related insights to its clients to make right decisions. It operates through the following segments: Research, Consulting and Conferences. The Research segment gives advices on the mission-critical priorities of leaders. The Consulting segment offers customized solutions to unique client needs through on-site, day-to-day support, and proprietary tools for measuring and improving IT performance. The Conferences segment involves in the business professionals across the organization. The company was founded by Gideon I. Gartner and Dave L. R. Stein in 1979 and is headquartered in Stamford, CT.
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 Financial Statement Overview
Summary
Gartner shows strong financial health with consistent revenue and profit growth, efficient operational management, and improving leverage ratios. The company's robust cash flow supports financial stability and growth potential, though high liabilities remain a risk.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.85
Very Positive
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.78
Positive
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.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| 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
Negative
490.27
Price Trends
508.86
Negative
514.88
Negative
492.52
Negative
Market Momentum
-8.47
Positive
40.06
Neutral
20.99
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 490.27 is below the 20-day moving average (MA) of 508.68, below the 50-day MA of 508.86, and below the 200-day MA of 492.52, indicating a bearish trend. The MACD of -8.47 indicates Positive momentum. The RSI at 40.06 is Neutral, neither overbought nor oversold. The STOCH value of 20.99 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 0 New Risks
Gartner Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $41.42B | 18.58 | 15.55% | 1.44% | 1.98% | 7.16% | |
76 Outperform | $217.98B | 29.21 | 25.93% | 1.60% | 2.75% | 10.53% | |
75 Outperform | $37.03B | 30.07 | 92.24% | ― | 6.10% | 44.57% | |
69 Neutral | $3.97B | 36.55 | 7.71% | ― | 8.49% | 31.15% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% | |
50 Neutral | $204.59M | ― | -2.92% | ― | -11.42% | -431.87% | |
47 Neutral | $3.26B | 267.98 | -2.51% | ― | -5.65% | 78.20% |
* Technology Sector Average
Performance Comparison
IT
Gartner
490.27
21.30
4.54%
ACN
Accenture
348.26
-26.32
-7.03%
CTSH
Cognizant
84.28
8.78
11.63%
FORR
Forrester Research
10.54
-9.02
-46.11%
ITGR
Integer Holdings
122.73
7.53
6.54%
DXC
DXC Technology
18.22
-2.16
-10.60%
Gartner Earnings Call Summary
Earnings Call Date: Feb 4, 2025 | % Change Since: -10.50% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Positive
Gartner delivered strong financial results in Q4 2024, with notable growth in revenue, EPS, and free cash flow. The company experienced success in its research, conferences, and consulting segments and provided a positive outlook for 2025. However, challenges such as geopolitical issues, currency fluctuations, and pressure in the China market were noted. The overall sentiment of the call leans towards a positive outlook, driven by strong financial performance and growth potential, despite some external challenges.Highlights
Strong Overall Financial Performance
Fourth quarter revenue was $1.7 billion, up 8% year-over-year. Adjusted EPS was $5.45, up 79% versus Q4 2023. Free cash flow was $311 million, up 59% compared to last year.
Research and Conferences Growth
Global Technology Sales new business grew 13%, with double-digit growth in both enterprise leaders and tech vendors. Conferences revenue grew 17% in the fourth quarter.
Consulting and Contract Optimization Success
Consulting revenue of $153 million increased 19% compared with the fourth quarter of 2023. Contract Optimization revenue was $50 million, exceeding expectations.
Positive 2025 Outlook
Introducing 2025 guidance with expected revenue of at least $6.555 billion and EBITDA of at least $1.51 billion. Expecting strong performance across all segments.
Robust Share Repurchase Program
Repurchased $735 million of stock in 2024. Over the past four years, repurchased more than $4 billion in stock.
Lowlights
Macroeconomic and Geopolitical Challenges
Continued geopolitical polarization and conflict, supply chain disruptions, and cybersecurity threats. Enterprises are challenged by leveraging AI while mitigating risks.
Pressure from Currency Fluctuations
The U.S. dollar strengthened significantly during 2024, creating a larger-than-normal revaluation impact.
Challenges in China
China market remains challenging, especially with larger clients.
Public Sector Caution
Being thoughtful about public sector hiring due to dynamic environment, especially U.S. Federal Government spending uncertainties.
Company Guidance
During Gartner's Fourth Quarter 2024 Earnings Call, the company reported robust financial performance and provided guidance for 2025. In Q4, contract value grew 8%, and revenue, EBITDA, EPS, and free cash flow exceeded expectations. For the full year, Gartner achieved global contract value growth of 8%, consolidated revenue growth of 6%, EBITDA of $1.6 billion, diluted adjusted EPS of $14.09, and free cash flow of $1.4 billion. The company repurchased over $735 million in stock throughout the year. Looking ahead to 2025, Gartner introduced guidance with expectations for at least $6.555 billion in consolidated revenue, $1.51 billion in EBITDA, and $11.45 in adjusted EPS. The guidance anticipates mid-to-high single-digit sales headcount growth, with continued focus on prudent investment for future growth.Gartner Corporate Events
Stock BuybackFinancial Disclosures
Gartner Reports Strong Growth in 2024 Financial Results
Positive
Feb 4, 2025
On February 4, 2025, Gartner, Inc. announced its financial results for the fourth quarter and full year of 2024, reporting a significant growth in revenues and profitability. The company achieved a 91% increase in net income for the quarter, reaching $399 million, and generated $1.7 billion in revenue, marking an 8% increase year-over-year. For the full year, Gartner reported a 42% rise in net income and a 6% growth in revenues, driven by strong contract value growth and substantial free cash flow generation. These results were attributed to delivering exceptional value for clients and shareholders, as well as strategic repurchases of common shares.
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.