Gartner Stock To $208?

Gartner (IT) stock has fallen 21% during the past day, and is currently trading at $160.16. Our multi-factor assessment suggests that it may be time to buy more shares of IT stock. We have, overall, a positive view of the stock, and a price of $208 may not be out of reach. We believe there are only a couple of things to fear in IT stock given its overall Moderate operating performance and financial condition. Considering stock’s Low valuation we think it is Attractive.

Below is our assessment:

Don’t get too attached to IT stock, even if you love it. Stocks crash. High Quality Portfolio lets you navigate that risk.

Let’s get into details of each of the assessed factors but before that, for quick background: With $12 Bil in market cap, Gartner provides research, conferences, and consulting services, enabling business professionals to learn, network, and access market research, custom analysis, and support.

[1] Valuation Looks Low

This table highlights how IT is valued vs broader market. For more details see: IT Valuation Ratios

[2] Growth Is Moderate

• Gartner has seen its top line grow at an average rate of 7.0% over the last 3 years
• Its revenues have grown 5.2% from $6.1 Bil to $6.5 Bil in the last 12 months
• Also, its quarterly revenues grew 2.7% to $1.5 Bil in the most recent quarter from $1.5 Bil a year ago.

This table highlights how IT is growing vs broader market. For more details see: IT Revenue Comparison

[3] Profitability Appears Moderate

• IT last 12 month operating income was $1.2 Bil representing operating margin of 17.9%
• With cash flow margin of 20.6%, it generated nearly $1.3 Bil in operating cash flow over this period
• For the same period, IT generated nearly $886 Mil in net income, suggesting net margin of about 13.7%

This table highlights how IT profitability vs broader market. For more details see: IT Operating Income Comparison

[4] Financial Stability Looks Very Strong

• IT Debt was $2.8 Bil at the end of the most recent quarter, while its current Market Cap is $12 Bil. This implies Debt-to-Equity Ratio of 23.0%
• IT Cash (including cash equivalents) makes up $1.4 Bil of $7.2 Bil in total Assets. This yields a Cash-to-Assets Ratio of 19.7%

[5] Downturn Resilience Is Moderate

IT saw an impact slightly worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

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

 
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

 
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

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.