Gartner
IT
$185.79
+22.61%
Gartner, Inc. is a leading research and advisory company that provides actionable, objective insights to executives and their teams across all major enterprise functions, operating through three segments: Business and Technology Insights, Conferences, and Consulting. As a dominant player in the IT research and advisory space, Gartner is recognized for its proprietary research and benchmarking data, which gives it a strong competitive moat. The current investor narrative centers on the company's significant stock price decline over the past year, driven by concerns about slowing revenue growth and the impact of AI on its traditional research model, while management emphasizes the resilience of its subscription-based Insights segment and ongoing share repurchases.…
IT
Gartner
$185.79
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Investment Opinion: Should I buy IT Today?
Based on the analysis, I rate Gartner as a Hold. The stock offers a potential 6.2% upside to the average analyst target of $160.38, but the consensus is cautious with a 'Hold' rating. The core thesis is that Gartner's strong margins and cash flow provide a floor, but the revenue decline and high leverage limit upside.
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IT 12-Month Price Forecast
The AI assessment is neutral with medium confidence. Gartner's valuation is cheap on a forward basis, but the negative PEG ratio and revenue decline suggest the market is skeptical of a recovery. The company's strong margins and cash flow provide a floor, but the lack of positive catalysts and high leverage limit upside. I would upgrade to bullish if revenue growth turns positive and the forward PE remains below 12x, or if the stock drops below $130, offering a margin of safety. I would downgrade to bearish if revenue decline accelerates beyond 5% or if debt-to-equity rises above 15x.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Gartner's 12-month outlook, with a consensus price target around $160.38 and implied upside of -13.7% versus the current price.
Average Target
$160.38
0 analysts
Implied Upside
-13.7%
vs. current price
Analyst Count
—
covering this stock
Price Range
$120 - $203
Analyst target range
Analyst coverage is moderate with 13 analysts, and the consensus recommendation is 'Hold' with a mean rating of 2.8 (where 1 is Strong Buy and 5 is Sell). The average target price is $160.38, implying a 6.2% upside from the current price of $151.02. The distribution includes 0 Strong Buys, 5 Buys, 7 Holds, and 1 Sell, indicating a cautious stance. The target range spans from a low of $120.00 to a high of $203.00, with the low implying a 20.5% downside and the high implying a 34.4% upside. The wide spread reflects high uncertainty about Gartner's growth trajectory, with the low target likely pricing in continued revenue declines and the high target assuming a successful AI-driven transformation. Recent ratings have been predominantly neutral, with no upgrades or downgrades in the past three months, suggesting analysts are waiting for clearer signs of stabilization.
Bulls vs Bears: IT Investment Factors
Gartner presents a mixed picture: strong margins and cash flow are offset by declining revenue and high leverage. The bear case currently has stronger evidence, as the revenue decline and negative PEG ratio highlight fundamental challenges. The most important tension is whether the revenue decline is cyclical or structural—if AI disrupts Gartner's traditional research model, the bear case dominates; if it's a temporary slowdown, the stock is deeply undervalued. The forward PE suggests the market expects a sharp recovery, but the negative PEG ratio and analyst caution indicate skepticism. Investors should watch for signs of revenue stabilization as the key determinant of the stock's direction.
Bullish
- High Gross Margin: Gartner's gross margin is 71.6% in Q1 2026, reflecting the scalability of its subscription-based Insights segment. This high margin provides a strong foundation for profitability and cash generation, even during periods of revenue softness.
- Strong Free Cash Flow: The company generated $1.26 billion in trailing twelve-month free cash flow, demonstrating robust cash generation. This cash flow supports ongoing share repurchases and provides a cushion for strategic investments.
- Forward PE Discount: The forward PE of 9.87x is significantly below the industry average of 22x, suggesting the market is pricing in a sharp earnings recovery. If Gartner can stabilize revenue and achieve the projected EPS growth, the stock offers substantial upside.
- Analyst Target Upside: The average analyst target price of $160.38 implies a 6.2% upside from the current price of $151.02. While modest, the high target of $203 suggests potential for a 34.4% gain if the company executes on its AI strategy.
Bearish
- Revenue Decline: Q1 2026 revenue fell 1.5% year-over-year to $1.511 billion, breaking a streak of modest growth. This deceleration raises concerns about demand for Gartner's research and consulting services, potentially signaling a structural shift.
- Negative PEG Ratio: The PEG ratio of -0.65 indicates that earnings growth is expected to be negative, contradicting the forward PE's implied growth. This suggests the market is skeptical about the company's ability to grow earnings, making the forward PE potentially misleading.
- High Debt-to-Equity: Gartner's debt-to-equity ratio is 11.31, indicating significant leverage. This high debt load increases financial risk, especially if revenue continues to decline and interest rates remain elevated.
- Weak Relative Strength: The stock's 1-year relative strength is -73.6%, meaning it has massively underperformed the S&P 500. This persistent underperformance reflects negative investor sentiment and could continue if the company fails to show a turnaround.
IT Technical Analysis
Gartner's stock is in a pronounced downtrend, with a 1-year price change of -55.4%, and the current price of $151.02 sits at approximately 45% of its 52-week range (between $124.25 low and $337.29 high). This positioning near the lower end of the range suggests persistent selling pressure and a bearish sentiment, though the stock has bounced off the lows, indicating potential value buying interest. The 52-week low of $124.25 was tested in late June, and the subsequent recovery to $151.02 shows a 21.5% rebound from that low, but the stock remains far below its 52-week high of $337.29, reflecting a loss of over half its value.
Beta
0.91
0.91x market volatility
Max Drawdown
-69.1%
Largest decline past year
52-Week Range
$124-$266
Price range past year
Annual Return
-44.8%
Cumulative gain past year
| Period | IT Return | S&P 500 |
|---|---|---|
| 1m | +36.3% | +3.6% |
| 3m | +23.0% | +5.1% |
| 6m | +22.2% | +13.8% |
| 1y | -44.8% | +22.2% |
| ytd | -21.6% | +13.1% |
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IT Fundamental Analysis
Gartner's revenue in Q1 2026 was $1.511 billion, a slight decline of 1.5% year-over-year, breaking a streak of modest growth seen in prior quarters (Q2 2025: $1.686B, +5.7% YoY; Q3 2025: $1.524B, +2.7% YoY; Q4 2025: $1.753B, +2.2% YoY). The deceleration is concerning, as it marks the first negative growth quarter in recent history, potentially signaling softening demand for research and consulting services. The company's net income in Q1 2026 was $222.3 million, a slight increase from $210.9 million in Q1 2025, but the net margin improved to 14.7% from 13.7%, driven by cost controls and a favorable mix. Gross margin remained robust at 71.6%, consistent with the high-margin nature of its subscription-based Insights segment, which generates the majority of revenue.
Quarterly Revenue
$1.5B
2026-03
Revenue YoY Growth
-1.5%
YoY Comparison
Gross Margin
71.6%
Latest Quarter
Free Cash Flow
$1.3B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is IT Overvalued?
Given that Gartner is profitable, the PE ratio is the primary valuation metric. The trailing PE is 26.06x, while the forward PE is 9.87x, implying that the market expects a significant increase in earnings per share (from $5.79 to $15.31) over the next year, which seems overly optimistic given the current revenue decline. The PEG ratio is negative at -0.65, indicating that earnings growth is expected to be negative, which contradicts the forward PE's implied growth. Compared to the industry average PE of 22x (based on available data), Gartner's trailing PE of 26.06x represents a premium of 18.5%, but the forward PE of 9.87x is a steep discount, suggesting that the market is pricing in a sharp earnings recovery that may not materialize.
PE
26.1x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 12x~44x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
16.3x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks are significant: Gartner's debt-to-equity ratio of 11.31 indicates high leverage, which amplifies the impact of revenue declines on earnings. The company's operating margin of 15.8% is respectable but could compress if revenue continues to fall. Free cash flow of $1.26 billion provides some cushion, but a prolonged downturn could strain debt servicing. The negative PEG ratio suggests the market expects earnings to decline, which could lead to further multiple compression.
FAQ
The key risks are: 1) Financial risk: high debt-to-equity of 11.31, which could strain if revenue declines; 2) Competitive risk: AI-driven alternatives could disrupt Gartner's research model, as evidenced by the recent revenue decline; 3) Macro risk: beta of 0.963 means the stock is highly correlated with the market, so a tech selloff could exacerbate losses; 4) Company-specific risk: the negative PEG ratio suggests the market expects earnings to decline, which could lead to further multiple compression. The most severe risk is a structural decline in demand for traditional research, which could push the stock to the analyst low target of $120, a 20.5% loss.
The 12-month forecast is uncertain, with three scenarios: bull case (25% probability) targets $180-$203, base case (50% probability) targets $150-$170, and bear case (25% probability) targets $120-$135. The base case is most likely, assuming revenue stabilizes and the stock trades around the average analyst target of $160. The key assumption is that Gartner can maintain its gross margin above 70% and generate free cash flow above $1 billion. A move above $170 would require a successful AI strategy, while a drop below $135 would signal accelerating revenue decline.
Gartner's trailing PE of 26.06x is 18.5% above the industry average of 22x, suggesting it is overvalued on trailing earnings. However, the forward PE of 9.87x is a steep discount, implying the market expects a sharp earnings recovery. The negative PEG ratio of -0.65 indicates that earnings growth is expected to be negative, which contradicts the forward PE's implied growth. This suggests the market is pricing in a recovery that may not materialize, making the stock potentially overvalued relative to its growth prospects. The stock trades at 2.8x sales, which is below the 5-year average, but the high debt-to-equity ratio adds risk. Overall, the valuation is fair to slightly overvalued, with the forward PE being misleadingly low.
Gartner is a Hold for most investors. The stock offers a potential 6.2% upside to the average analyst target of $160.38, but the consensus is cautious with a 'Hold' rating. The biggest downside risk is a continued revenue decline, which could push the stock to the 52-week low of $124.25, a 17.7% loss. For value investors with a long-term horizon, the stock may be attractive at current levels if they believe the AI disruption is overblown. However, for growth investors, the negative PEG ratio and revenue decline make it a risky bet. A good buy would require a margin of safety, such as a price below $130, or a clear catalyst for revenue stabilization.
Gartner is more suitable for long-term investment, given its high volatility (beta 0.963) and the ongoing AI disruption. The stock has a beta of 0.963, indicating high market correlation, and a 1-year decline of 55.4%, making it risky for short-term trading. The company pays no dividend, so returns depend on capital appreciation. For long-term investors, the stock could be a value play if the company successfully adapts to AI, but it requires patience and a high risk tolerance. A minimum holding period of 3-5 years is recommended to allow the transformation to play out. Short-term traders may find opportunities in the volatility, but the lack of clear catalysts makes it a speculative trade.