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.
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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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