Gartner Stock Drop Looks Sharp, But How Deep Can It Go?
Gartner (IT) stock is down 20.9% in a day. The recent slide reflects renewed concerns around slowing growth in its consulting and insights segments amid client spending scrutiny, but sharp drops like this often raise a tougher question: is the weakness temporary, or a sign of deeper cracks in the story?
Before judging its downturn reslience, let’s look at where Gartner stands today.
- Size: Gartner is a $12 Bil company with $6.5 Bil in revenue currently trading at $160.16.
- Fundamentals: Last 12 month revenue growth of 5.2% and operating margin of 17.9%.
- Liquidity: Has Debt to Equity ratio of 0.23 and Cash to Assets ratio of 0.2
- Valuation: Gartner stock is currently trading at P/E multiple of 13.5 and P/EBIT multiple of 11.2
- Has returned (median) 24.9% within a year following sharp dips since 2010. See IT Dip Buy Analysis.
These metrics point to a Moderate operational performance, alongside Low valuation – making the stock Attractive. For details, see Buy or Sell IT Stock
That brings us to the key consideration for investors worried about this fall: how resilient is IT stock if markets turn south? This is where our downturn resilience framework comes in. Suppose IT stock falls another 20-30% to $112 – can investors comfortably hold on? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Below, we dive deeper into each such downturn.
2022 Inflation Shock
- IT stock fell 34.0% from a high of $339.69 on 2 November 2021 to $224.07 on 16 June 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 10 November 2022
- Since then, the stock increased to a high of $551.80 on 13 November 2024 , and currently trades at $160.16
| IT | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -34.0% | -25.4% |
| Time to Full Recovery | 147 days | 464 days |
2020 Covid Pandemic
- IT stock fell 49.2% from a high of $163.85 on 3 February 2020 to $83.24 on 20 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 7 January 2021
| IT | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -49.2% | -33.9% |
| Time to Full Recovery | 293 days | 148 days |
2018 Correction
- IT stock fell 26.0% from a high of $171.04 on 26 July 2019 to $126.49 on 15 August 2019 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 9 February 2021
| IT | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -26.0% | -19.8% |
| Time to Full Recovery | 544 days | 120 days |
2008 Global Financial Crisis
- IT stock fell 70.3% from a high of $28.22 on 23 May 2007 to $8.38 on 9 March 2009 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 10 August 2010
| IT | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -70.3% | -56.8% |
| Time to Full Recovery | 519 days | 1,480 days |
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