Is IT Trading At A Bargain?

Here is why we think Gartner (IT) deserves consideration as a value stock. It is currently trading nearly 53% below its 1 year high, and also trading at a PS multiple which is below the average for the last 3 years. However, it has reasonable fundamentals for its level of valuation.

• Reasonable Revenue Growth: 5.9% LTM and 8.0% last 3 year average.
• Cash Generative: Nearly 23.5% free cash flow margin and 18.2% operating margin LTM.
• No Major Margin Shocks: IT has avoided any large margin collapse in the last 12 months.
• Modest Valuation: Despite encouraging fundamentals, IT trades at a PE multiple of 15.7
• Opportunity vs S&P: Compared to S&P, you get lower valuation, higher revenue growth, and better fcf and operating margins

As a quick background, Gartner provides research, conferences for professional learning and networking, plus consulting with market research, custom analysis, and support services.

Single stock can be risky, but there is a huge value to a broader diversified approach we take with Trefis High Quality Portfolio. Let us ask you this: Over the last 5 years, which index do you think the Trefis High Quality Portfolio outperformed – the S&P 500, Nasdaq, or both? The answer might surprise you. See how our advisory framework helps stack the odds in your favor.

*LTM: Last Twelve Months

But do these numbers tell the full story? Read Buy or Sell IT Stock to see if Gartner still has an edge that holds up under the hood.

Stocks Like These Can Outperform. Here Is Data

Below are statistics for stocks with same selection strategy applied between 12/31/2016 and 6/30/2025.

• Average 6-month and 12-month forward returns of 12.7% and 25.8% respectively
• Win rate (percentage of picks returning positive) of > 70% for both 6-month and 12-month periods
• Not over dependent on market crashes. During non-crash periods as well, this strategy has 12-month average return of nearly 20% with 67% win rate.

But Consider The Risk

That said, IT stocks aren’t immune to big drops. They fell 75% in the Dot-Com bubble and over 70% during the Global Financial Crisis. The 2018 correction and inflation shock weren’t as brutal but still saw dips around 26% and 34%. Even the Covid sell-off came with almost a 50% slide. Good fundamentals offer some cushion, but when the tide turns, sharp declines are part of the game.

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read IT Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.