Gartner
IT
$187.76
+1.60%
Gartner, Inc. is a research and advisory powerhouse serving chief information officers and senior technology executives, delivering syndicated research (including its influential Magic Quadrant reports), consulting engagements, and large-scale industry conferences, with roughly 80% of revenue derived from its research subscription business. The company operates as the de facto standard-setter in IT procurement intelligence, a position that gives it pricing power, high renewal rates, and a distinctive asset-light, subscription-heavy model within the Information Technology Services industry. The current investor narrative is dominated by a fierce debate over whether generative AI will disintermediate traditional analyst research or, conversely, amplify demand for independent, trusted enterprise guidance; that debate drove the stock down sharply earlier in 2026 before a strong Q2 earnings beat and raised guidance in early August triggered a violent re-rating, with headlines explicitly framing the results as evidence that 'AI disruption fears are overblown.' With 13 analysts largely sitting on the sidelines at a 'hold' consensus, the stock has become a battleground between value-oriented buyers citing a deep discount and skeptics worried about slowing core research growth and a shrinking share count masking organic weakness.…
IT
Gartner
$187.76
Related headlines
Investment Opinion: Should I buy IT Today?
Rating: Hold. Gartner is a high-quality, cash-generative franchise trading at a deep value multiple, but with flat revenue growth and a 'hold' analyst consensus (mean 2.8) that offers essentially zero upside to the average target of $185.15. The core thesis is that the market has over-punished the stock for AI disruption fears, creating a value opportunity, but the lack of near-term catalysts and unresolved structural questions justify a neutral stance until evidence of reacceleration emerges.
Supporting evidence: The forward PE of 11.30x is less than half the trailing PE of 26.06x, implying expected earnings growth that could drive multiple expansion. Revenue declined 0.62% year-over-year in Q2 2026, but operating margin improved to 22.63% from 19.40% a year earlier, and gross margin held at 70.95%. TTM free cash flow of $1.289 billion provides a 7.1% FCF yield, funding aggressive buybacks ($547.1 million in Q2 alone) that boost EPS even without revenue growth. The stock trades at a PS ratio of 2.80x, far below its historical 18–26x range, and the analyst high target of $229 implies 24% upside if AI fears fully subside.
Risks and conditions: The biggest risks are that AI disintermediation permanently impairs the research model, revenue growth remains stagnant or turns negative, and the value multiple proves to be a value trap. This Hold would upgrade to Buy if revenue growth returns to positive territory (e.g., >2% YoY) and the forward PE remains below 15x, or if the stock breaks above $203 on strong volume. It would downgrade to Sell if revenue declines accelerate below -3% YoY, operating margins fall below 20%, or the stock breaks below $170, threatening a retest of the $124 low. Relative to its own history and the broader sector, Gartner appears undervalued, but the discount is justified until growth stabilizes.
Sign up to view all
IT 12-Month Price Forecast
Gartner presents a classic value-versus-growth debate: the stock is statistically cheap on forward earnings and cash flow, but the core research business is not growing, and AI disruption remains an unresolved threat. The August earnings beat and raised guidance suggest the bear case may be overdone, yet the lack of analyst upgrades and zero upside to the average target indicate the market needs more proof. The risk-reward is balanced, with the potential for significant multiple expansion if growth stabilizes, but also for further downside if revenue contraction accelerates. I would upgrade to bullish if Q3 results show positive organic growth and stable renewal rates, and downgrade to bearish if revenue declines worsen or margins compress below 20%.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Gartner's 12-month outlook, with a consensus price target around $185.15 and implied upside of -1.4% versus the current price.
Average Target
$185.15
0 analysts
Implied Upside
-1.4%
vs. current price
Analyst Count
—
covering this stock
Price Range
$150 - $229
Analyst target range
Coverage is moderate with 13 analysts, and sentiment is decidedly neutral: the consensus recommendation is 'hold' with a recommendation mean of 2.8, and the average target price of $185.15 sits almost exactly at the current price of $184.80 — implying essentially 0% upside (a mere +0.19%). The distribution skews cautious, with recent actions from BMO Capital (Market Perform), UBS (Neutral), Wells Fargo (Underweight), Goldman Sachs (Neutral), RBC Capital (Sector Perform), and Morgan Stanley (Equal Weight) all clustered in the hold-to-underweight camp, and no visible upgrades in the institutional ratings history. This is a stock the sell-side neither loves nor hates — it is a consensus 'show me' story awaiting evidence that growth can reaccelerate.
The target range is wide, spanning from a low of $150.00 to a high of $229.00 — a spread of $79, or roughly 43% of the current price — which signals meaningful disagreement about the company's trajectory. The high target of $229 implies roughly 24% upside and would require the market to conclude that AI fears are fully overblown, that research renewal rates hold firm, and that buyback-driven EPS growth justifies multiple expansion back toward historical norms; the low target of $150 implies about 19% downside and prices in continued revenue stagnation, margin pressure, and the risk that AI-native research tools erode Gartner's moat. The absence of any recent upgrades and the presence of a persistent Underweight from Wells Fargo suggest the burden of proof remains on the bulls, and with the average target essentially equal to the current price, the risk-reward is balanced until either a breakout above $203 or a breakdown below $170 resolves the technical and fundamental standoff.
Bulls vs Bears: IT Investment Factors
The bear case currently has stronger near-term evidence: revenue is flat to slightly negative, analyst consensus offers zero upside, and the stock remains in a longer-term downtrend despite a sharp three-month bounce. However, the bull case is underpinned by hard valuation math—a forward PE of 11.3x and 7.1% FCF yield are deep-value levels for a 70% gross margin franchise—and the August earnings beat directly challenged the AI-disruption narrative. The single most important tension is whether AI is a terminal threat to Gartner's research model or a temporary sentiment overhang; if the former, the stock is a value trap, but if the latter, multiple expansion alone could drive substantial returns. With 13 analysts clustered at 'hold' and a target range of $150–$229, the market is genuinely undecided, and the resolution will likely come from evidence on research renewal rates and AI-driven competitive dynamics over the next two to three quarters.
Bullish
- Deep value forward PE of 11.3x: Gartner trades at a forward PE of just 11.30x versus a trailing PE of 26.06x, implying the market expects earnings to roughly double. This extreme gap is rare for a 70%+ gross margin, cash-generative franchise and suggests significant multiple expansion potential if growth stabilizes.
- Powerful free cash flow engine: TTM free cash flow is $1.289 billion against a market cap of ~$18.2 billion, an FCF yield of 7.1%. Q2 2026 alone generated $378.4 million in FCF, funding $547.1 million of buybacks without external financing, which mechanically boosts EPS even with flat revenue.
- August earnings beat crushed AI fears: Q2 2026 revenue of $1.676 billion and EPS of $4.14 beat expectations, prompting raised guidance and a 35.56% three-month rally. Headlines from The Motley Fool explicitly stated that 'AI disruption fears are overblown,' triggering a violent re-rating from the 52-week low of $124.25.
- Extreme historical valuation compression: The PS ratio of 2.80x is roughly one-seventh of the 18–26x range seen in 2023–2024, and the trailing PE of 26.06x sits well below the 32–44x historical band. This places the stock near the bottom of its multi-year valuation range, implying the market has priced in permanent impairment that may not materialize.
Bearish
- Revenue growth has stalled: Q2 2026 revenue declined 0.62% year-over-year to $1.676 billion, a sharp deceleration for a business that historically compounded in the mid-single digits. With ~80% of revenue from research subscriptions, any softness in that core franchise disproportionately drags overall growth.
- Analyst consensus offers zero upside: The average analyst target price of $185.15 is virtually identical to the current price of $184.80, implying just 0.19% upside. With a 'hold' consensus (mean 2.8) and recent actions from Wells Fargo (Underweight) and Morgan Stanley (Equal Weight), the sell-side sees no near-term catalyst.
- AI disintermediation risk remains unresolved: Generative AI tools could erode Gartner's moat by providing cheaper, faster research alternatives. The stock's 52.39% maximum drawdown and 28.16% one-year decline reflect persistent fear that the core research model faces structural disruption, not just cyclical weakness.
- Earnings volatility and margin compression: Net margin has compressed from 27.96% in Q3 2024 to 16.44% in Q2 2026, and Q3 2025 EPS was just $0.47 versus $5.32 in Q3 2024. This extreme quarterly earnings volatility undermines confidence in forward estimates and raises questions about the sustainability of the buyback-driven EPS growth.
IT Technical Analysis
Gartner is in a recovery phase within a broader downtrend: the stock is down 28.16% over the past year and 22.04% year-to-date, yet has rallied 35.56% over the past three months, a sharp inflection off its 52-week low of $124.25. At the current price of $184.80, the stock sits roughly 43.4% above its 52-week low but about 29.4% below its 52-week high of $261.84, placing it near the lower-middle of its annual range — a positioning that reflects damaged longer-term momentum but meaningful near-term repair rather than a fresh breakout to new highs. The 52.39% maximum drawdown underscores how severe the prior decline was, and the current advance should be treated as a rebound within a still-unconfirmed trend reversal until the stock reclaims higher ground.
Short-term momentum is mixed and decelerating: the stock is down 1.04% over the past month and fell 4.15% on the most recent session alone (from $192.80 to $184.80), even as the 3-month change of +35.56% remains strongly positive. This divergence — a powerful quarterly surge colliding with a flat-to-negative recent month — suggests the August earnings-driven spike is being digested, with profit-taking emerging near the $195–$203 zone. Relative strength tells the same story: the stock has outperformed SPY by 32.22 percentage points over three months but underperformed by 1.63 points over one month and a staggering 43.17 points over one year, confirming that recent momentum is a counter-trend bounce rather than sustained leadership. Volume of roughly 628,411 shares on the latest down day is not indicative of capitulation, implying the pullback is orderly rather than panic-driven.
Key technical levels are well defined: support rests at the 52-week low of $124.25, with an intermediate shelf around the $170–$175 area where the stock consolidated in early September, while resistance sits at the $202.78 August swing high and, more distantly, the $261.84 52-week high. A decisive breakout above $203 would signal that the market is fully embracing the post-earnings fundamental narrative and could open a path toward the mid-$200s, whereas a breakdown below $170 would threaten a retest of the $124–$130 base and validate the bear case. With a beta of 0.953, Gartner is slightly less volatile than the broader market, meaning its dramatic 52% drawdown was driven by stock-specific (not market) factors — an important consideration for position sizing, since idiosyncratic narrative risk, not market beta, is the dominant risk here.
Beta
0.98
0.98x market volatility
Max Drawdown
-52.4%
Largest decline past year
52-Week Range
$124-$261
Price range past year
Annual Return
-27.0%
Cumulative gain past year
| Period | IT Return | S&P 500 |
|---|---|---|
| 1m | +0.7% | +0.6% |
| 3m | +33.4% | +3.6% |
| 6m | +25.7% | +14.6% |
| 1y | -27.0% | +15.8% |
| ytd | -20.8% | +13.6% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
IT Fundamental Analysis
Gartner's revenue trajectory has flattened: Q2 2026 revenue of $1.676 billion declined 0.62% year-over-year versus Q2 2025's $1.686 billion, a notable deceleration for a business that historically compounded in the mid-single digits. Sequentially, revenue rose from $1.511 billion in Q1 2026 to $1.676 billion in Q2 2026, but the prior-year comparison shows the core research engine is no longer expanding at the pace investors once paid a premium for. Within the segment mix, Events generated $244.2 million and Consulting $141.9 million in the quarter, meaning the vast majority of revenue still comes from research subscriptions — so any softness in that core franchise disproportionately drives the overall growth picture, and the flat YoY print is precisely what fueled the AI-disruption bear thesis earlier in the year.
Profitability remains robust despite the top-line stall: Q2 2026 net income was $275.5 million on a 16.44% net margin, with gross margin of 70.95% and operating margin of 22.63% — healthy levels for an information services business, though the net margin has compressed from 23.24% in Q4 2024 and 27.96% in Q3 2024. Gross margin has been relatively stable in the 68.5%–71.6% band over the past several quarters, but the operating margin of 22.63% in Q2 2026 compares favorably to 19.40% in Q2 2025, indicating cost discipline is offsetting revenue softness. The key takeaway is that Gartner is not a broken business — it is a highly profitable, high-margin franchise whose growth has stalled, and the market is repricing it from a growth multiple to a value multiple accordingly.
Balance sheet and cash generation are the strongest part of the story: trailing-twelve-month free cash flow is $1.289 billion against a market cap of roughly $18.2 billion, implying an FCF yield of about 7.1%, and Q2 2026 free cash flow alone was $378.4 million on operating cash flow of $398.3 million. The company holds $1.489 billion in cash with a current ratio of 0.999, and while the reported debt-to-equity ratio of 11.31 appears alarming, it reflects an equity base shrunk by aggressive buybacks — the company repurchased $547.1 million of stock in Q2 2026 alone and $534.6 million in Q1 2026, funding these repurchases entirely from internal cash flow. ROE of 227.9% is a mechanical artifact of the depleted equity base rather than a sign of extraordinary capital efficiency, but the underlying cash engine is genuinely powerful: Gartner generates enough cash to buy back stock at a rapid clip without external financing, which provides a durable floor under per-share earnings even if absolute revenue growth remains muted.
Quarterly Revenue
$1.7B
2026-06
Revenue YoY Growth
-0.6%
YoY Comparison
Gross Margin
71.0%
Latest Quarter
Free Cash Flow
$1.3B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
Open an Account, get $2 TSLA now!
Valuation Analysis: Is IT Overvalued?
Because Gartner is solidly profitable — Q2 2026 net income of $275.5 million and trailing EPS of $4.14 — the PE ratio is the appropriate primary metric, and here the story is striking: the trailing PE is 26.06x while the forward PE is just 11.30x, an extraordinarily wide gap. That divergence implies the market expects earnings to roughly double, consistent with analyst estimated EPS averaging $37.58 for the forward period (versus the current quarterly run-rate), though the scale of that implied jump warrants scrutiny given flat revenue growth — much of it likely reflects the compounding effect of the shrinking share count and margin normalization rather than organic acceleration. The forward PE of 11.3x is remarkably cheap for a 70%+ gross margin, cash-generative franchise, which is precisely the bull case.
Against the broader Technology sector, Gartner screens as a deep value outlier: its PS ratio of 2.80x and EV/Sales of 2.17x are far below what high-quality information services peers typically command, and its EV/EBITDA of 16.32x is moderate rather than stretched. The PEG ratio of -0.65 is not meaningful given the negative trailing growth rate, but the forward PE of 11.3x versus a sector that routinely trades in the 25–35x range represents a discount of roughly 55–65%, a spread that only makes sense if the market believes Gartner's growth is structurally impaired. The premium/discount question therefore hinges entirely on whether AI is a terminal threat to the research model or a temporary sentiment overhang — the valuation is pricing in the former, while the August earnings beat and raised guidance argue for the latter.
Historically, Gartner has traded at far richer multiples: its PS ratio ranged from roughly 18x to 26x throughout 2023 and 2024, and its PE ratio sat in the 32–44x range during that period, compared to today's 26.06x trailing PE and 2.80x PS. This places the stock near the bottom of its own multi-year valuation band — PS of 2.80x is roughly one-seventh of the 18–26x range seen in 2023–2024, an extreme compression that either signals a generational value opportunity or reflects genuine fundamental deterioration in the growth algorithm. The market is clearly pricing in a permanent de-rating of the business, and the central investment question is whether that pessimism is overdone — the forward PE of 11.3x suggests that if Gartner merely stabilizes growth, multiple expansion alone could drive substantial returns.
PE
26.1x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 8x~44x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
16.3x
Enterprise Value Multiple
Investment Risk Disclosure
Gartner's financial risks are moderate but nuanced. The debt-to-equity ratio of 11.31 appears alarming, but it is an artifact of an equity base shrunk by aggressive buybacks—$547.1 million in Q2 2026 alone—rather than excessive leverage; the company holds $1.489 billion in cash and funds repurchases entirely from internal cash flow. However, the current ratio of 0.999 is below 1.0, indicating tight short-term liquidity, and the 0.62% year-over-year revenue decline in Q2 2026 raises the risk that continued top-line stagnation could pressure margins and cash flow if cost discipline falters. Additionally, the extreme quarterly earnings volatility—Q3 2025 EPS of $0.47 versus $5.32 in Q3 2024—demonstrates that results can swing dramatically, complicating forecasting and potentially triggering sharp stock reactions.
Market and competitive risks are significant. Gartner trades at a forward PE of 11.3x, which is a deep discount to the Technology sector's typical 25–35x range, but this discount could persist or widen if the market concludes that AI-native research tools are structurally eroding Gartner's moat. The stock's beta of 0.953 indicates it is slightly less volatile than the broader market, meaning its 52.39% maximum drawdown was driven by stock-specific narrative risk—particularly AI disruption fears—rather than market beta. Competitive threats from AI-powered platforms that offer faster, cheaper IT research could pressure renewal rates and pricing power, while a sector rotation away from value-oriented information services could keep the multiple depressed. Recent news highlights that AI disruption fears are a central debate, with some outlets calling them 'overblown' after Q2 earnings, but the absence of analyst upgrades suggests the burden of proof remains on the bulls.
The worst-case scenario for Gartner would be a combination of accelerating AI-driven disintermediation, a decline in research renewal rates, and a failure to stabilize revenue growth, leading to multiple compression and earnings misses. In this scenario, the stock could retest its 52-week low of $124.25, representing a 32.8% decline from the current price of $184.80, or fall to the analyst low target of $150, a 18.8% drop. A more severe outcome, such as a recession that cuts IT budgets and accelerates the shift to cheaper AI alternatives, could push the stock below $124 toward the $100–$110 range, implying a 40–46% loss. Given the 52.39% maximum drawdown already experienced, investors should be prepared for significant downside if the bear thesis gains traction.
FAQ
The most severe risk is AI-driven disintermediation, which could erode Gartner's moat and pressure renewal rates, leading to further revenue declines. Financial risks include a current ratio below 1.0 (0.999) and extreme quarterly earnings volatility, as seen in Q3 2025 EPS of $0.47 versus $5.32 in Q3 2024. Competitive risks include the emergence of cheaper, AI-native research platforms that could undercut Gartner's pricing. Macro risks include a tech sector rotation away from value stocks and potential IT budget cuts in a recession. Ranked by severity: AI disruption, revenue stagnation, margin compression, and liquidity tightness.
The 12-month forecast is balanced, with a 50% probability of a base case where the stock trades between $175 and $200, a 25% chance of a bull case reaching $229–$261, and a 25% chance of a bear case falling to $124–$150. The base case assumes revenue growth stabilizes near flat and margins hold above 20%. The bull case requires AI fears to fully subside and revenue growth to return to low-single digits. The bear case is triggered by accelerating AI disruption and revenue contraction. The most likely scenario is the base case, with the stock oscillating around the analyst average target of $185.
Gartner appears undervalued relative to its own history and the broader Technology sector. Its forward PE of 11.3x is less than half the trailing PE of 26.06x and far below the sector's typical 25–35x range. The PS ratio of 2.80x is roughly one-seventh of the 18–26x range seen in 2023–2024, indicating extreme multiple compression. However, this discount reflects the market's belief that AI will structurally impair Gartner's research business. If the company can stabilize revenue growth, the valuation could expand significantly, but if growth remains negative, the discount may persist.
Gartner offers a compelling value proposition with a forward PE of 11.3x and a 7.1% free cash flow yield, but the stock lacks near-term catalysts and faces unresolved AI disruption risks. The average analyst target of $185.15 implies just 0.19% upside, and the consensus rating is 'hold,' suggesting the risk-reward is balanced. The biggest downside risk is a retest of the 52-week low of $124.25, representing a 32.8% decline, if revenue contraction accelerates. For value investors with a long time horizon, the stock could be a good buy on weakness, but for those seeking near-term gains, it is not a compelling buy until revenue growth stabilizes or the stock breaks above $203.
Gartner is more suitable for long-term investment than short-term trading. Its beta of 0.953 indicates lower volatility than the market, but the stock has experienced a 52.39% maximum drawdown, driven by idiosyncratic AI narrative risk. The lack of a dividend (payout ratio 0) means returns depend entirely on capital appreciation and buybacks. Earnings visibility is moderate, with flat revenue growth and volatile quarterly EPS. A suggested minimum holding period is 2–3 years to allow for potential multiple expansion and resolution of the AI disruption debate. Short-term traders may find opportunities around earnings, but the risk-reward is less favorable.