GARTNER INC (IT) Stock Fundamental Analysis
NYSE:IT - New York Stock Exchange, Inc. - US3666511072 - Common Stock - Currency: USD
Overall IT gets a fundamental rating of 6 out of 10. We evaluated IT against 81 industry peers in the IT Services industry. While IT belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. While showing a medium growth rate, IT is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
IT had positive earnings in the past year.
In the past year IT had a positive cash flow from operations.
Each year in the past 5 years IT has been profitable.
Each year in the past 5 years IT had a positive operating cash flow.
1.2 Ratios
IT has a Return On Assets of 14.79%. This is amongst the best in the industry. IT outperforms 96.30% of its industry peers.
Looking at the Return On Equity, with a value of 83.73%, IT belongs to the top of the industry, outperforming 97.53% of the companies in the same industry.
The Return On Invested Capital of IT (20.90%) is better than 92.59% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for IT is in line with the industry average of 21.85%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.79% | ||
| ROE | 83.73% | ||
| ROIC | 20.9% |
ROA(3y)12.34%
ROA(5y)10.27%
ROE(3y)192.17%
ROE(5y)162.96%
ROIC(3y)23.67%
ROIC(5y)19.92%
1.3 Margins
IT has a Profit Margin of 19.82%. This is amongst the best in the industry. IT outperforms 96.30% of its industry peers.
IT's Profit Margin has improved in the last couple of years.
IT's Operating Margin of 18.51% is amongst the best of the industry. IT outperforms 92.59% of its industry peers.
In the last couple of years the Operating Margin of IT has grown nicely.
The Gross Margin of IT (67.79%) is better than 85.19% of its industry peers.
In the last couple of years the Gross Margin of IT has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.51% | ||
| PM (TTM) | 19.82% | ||
| GM | 67.79% |
OM growth 3Y-1.45%
OM growth 5Y15.83%
PM growth 3Y6.07%
PM growth 5Y29.49%
GM growth 3Y-0.86%
GM growth 5Y1.3%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so IT is creating value.
The number of shares outstanding for IT has been reduced compared to 1 year ago.
Compared to 5 years ago, IT has less shares outstanding
The debt/assets ratio for IT has been reduced compared to a year ago.
2.2 Solvency
IT has an Altman-Z score of 4.95. This indicates that IT is financially healthy and has little risk of bankruptcy at the moment.
IT has a Altman-Z score of 4.95. This is in the better half of the industry: IT outperforms 69.14% of its industry peers.
The Debt to FCF ratio of IT is 1.64, which is an excellent value as it means it would take IT, only 1.64 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 1.64, IT is doing good in the industry, outperforming 72.84% of the companies in the same industry.
A Debt/Equity ratio of 1.64 is on the high side and indicates that IT has dependencies on debt financing.
IT has a Debt to Equity ratio of 1.64. This is in the lower half of the industry: IT underperforms 77.78% of its industry peers.
Even though the debt/equity ratio score it not favorable for IT, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.64 | ||
| Debt/FCF | 1.64 | ||
| Altman-Z | 4.95 |
ROIC/WACC2.29
WACC9.12%
2.3 Liquidity
IT has a Current Ratio of 1.09. This is a normal value and indicates that IT is financially healthy and should not expect problems in meeting its short term obligations.
IT has a Current ratio of 1.09. This is in the lower half of the industry: IT underperforms 75.31% of its industry peers.
IT has a Quick Ratio of 1.09. This is a normal value and indicates that IT is financially healthy and should not expect problems in meeting its short term obligations.
IT's Quick ratio of 1.09 is on the low side compared to the rest of the industry. IT is outperformed by 74.07% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.09 | ||
| Quick Ratio | 1.09 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 24.34% over the past year.
IT shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 29.24% yearly.
Looking at the last year, IT shows a small growth in Revenue. The Revenue has grown by 5.99% in the last year.
Measured over the past years, IT shows a quite strong growth in Revenue. The Revenue has been growing by 8.10% on average per year.
EPS 1Y (TTM)24.34%
EPS 3Y15.05%
EPS 5Y29.24%
EPS Q2Q%1.71%
Revenue 1Y (TTM)5.99%
Revenue growth 3Y9.8%
Revenue growth 5Y8.1%
Sales Q2Q%4.16%
3.2 Future
The Earnings Per Share is expected to grow by 4.59% on average over the next years.
The Revenue is expected to grow by 7.01% on average over the next years.
EPS Next Y-9.17%
EPS Next 2Y-0.32%
EPS Next 3Y4.59%
EPS Next 5YN/A
Revenue Next Year5.15%
Revenue Next 2Y5.93%
Revenue Next 3Y7.01%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 28.74, IT can be considered very expensive at the moment.
IT's Price/Earnings ratio is in line with the industry average.
IT is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 29.03 indicates a quite expensive valuation of IT.
IT's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 21.70. IT is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.74 | ||
| Fwd PE | 29.03 |
4.2 Price Multiples
IT's Enterprise Value to EBITDA ratio is in line with the industry average.
IT's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. IT is cheaper than 66.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.8 | ||
| EV/EBITDA | 22.9 |
4.3 Compensation for Growth
The excellent profitability rating of IT may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.98
EPS Next 2Y-0.32%
EPS Next 3Y4.59%
5. Dividend
5.1 Amount
IT does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
406.7
+2.48 (+0.61%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners96.1%
Inst Owner Change2.15%
Ins Owners1.81%
Ins Owner Change2.11%
Market Cap31.30B
Analysts76
Price Target492.48 (21.09%)
Short Float %3.54%
Short Ratio3.82
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)34.62%
Min EPS beat(2)6.5%
Max EPS beat(2)62.75%
EPS beat(4)4
Avg EPS beat(4)18.59%
Min EPS beat(4)1.75%
Max EPS beat(4)62.75%
EPS beat(8)8
Avg EPS beat(8)16.08%
EPS beat(12)12
Avg EPS beat(12)22.2%
EPS beat(16)16
Avg EPS beat(16)23.03%
Revenue beat(2)0
Avg Revenue beat(2)-2.23%
Min Revenue beat(2)-2.97%
Max Revenue beat(2)-1.49%
Revenue beat(4)0
Avg Revenue beat(4)-2.25%
Min Revenue beat(4)-2.97%
Max Revenue beat(4)-1.49%
Revenue beat(8)0
Avg Revenue beat(8)-2.2%
Revenue beat(12)2
Avg Revenue beat(12)-1.51%
Revenue beat(16)4
Avg Revenue beat(16)-1.09%
PT rev (1m)-2.41%
PT rev (3m)-15.27%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.92%
EPS NY rev (1m)0.47%
EPS NY rev (3m)0.25%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.35%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)-0.54%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.74 | ||
| Fwd PE | 29.03 | ||
| P/S | 4.95 | ||
| P/FCF | 20.8 | ||
| P/OCF | 19.45 | ||
| P/B | 20.9 | ||
| P/tB | N/A | ||
| EV/EBITDA | 22.9 |
EPS(TTM)14.15
EY3.48%
EPS(NY)14.01
Fwd EY3.44%
FCF(TTM)19.55
FCFY4.81%
OCF(TTM)20.91
OCFY5.14%
SpS82.22
BVpS19.46
TBVpS-23.74
PEG (NY)N/A
PEG (5Y)0.98
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.79% | ||
| ROE | 83.73% | ||
| ROCE | 24.98% | ||
| ROIC | 20.9% | ||
| ROICexc | 37.72% | ||
| ROICexgc | N/A | ||
| OM | 18.51% | ||
| PM (TTM) | 19.82% | ||
| GM | 67.79% | ||
| FCFM | 23.78% |
ROA(3y)12.34%
ROA(5y)10.27%
ROE(3y)192.17%
ROE(5y)162.96%
ROIC(3y)23.67%
ROIC(5y)19.92%
ROICexc(3y)34.69%
ROICexc(5y)27.78%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)28.3%
ROCE(5y)23.82%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y16.45%
ROICexc growth 5Y36.24%
OM growth 3Y-1.45%
OM growth 5Y15.83%
PM growth 3Y6.07%
PM growth 5Y29.49%
GM growth 3Y-0.86%
GM growth 5Y1.3%
F-Score8
Asset Turnover0.75
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.64 | ||
| Debt/FCF | 1.64 | ||
| Debt/EBITDA | 1.79 | ||
| Cap/Depr | 51.36% | ||
| Cap/Sales | 1.65% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 117.06% | ||
| Profit Quality | 120% | ||
| Current Ratio | 1.09 | ||
| Quick Ratio | 1.09 | ||
| Altman-Z | 4.95 |
F-Score8
WACC9.12%
ROIC/WACC2.29
Cap/Depr(3y)53.53%
Cap/Depr(5y)45.41%
Cap/Sales(3y)1.78%
Cap/Sales(5y)1.73%
Profit Quality(3y)117.52%
Profit Quality(5y)163.53%
High Growth Momentum
Growth
EPS 1Y (TTM)24.34%
EPS 3Y15.05%
EPS 5Y29.24%
EPS Q2Q%1.71%
EPS Next Y-9.17%
EPS Next 2Y-0.32%
EPS Next 3Y4.59%
EPS Next 5YN/A
Revenue 1Y (TTM)5.99%
Revenue growth 3Y9.8%
Revenue growth 5Y8.1%
Sales Q2Q%4.16%
Revenue Next Year5.15%
Revenue Next 2Y5.93%
Revenue Next 3Y7.01%
Revenue Next 5YN/A
EBIT growth 1Y3.87%
EBIT growth 3Y8.21%
EBIT growth 5Y25.22%
EBIT Next Year20.27%
EBIT Next 3Y12.56%
EBIT Next 5YN/A
FCF growth 1Y52.56%
FCF growth 3Y3.36%
FCF growth 5Y27.14%
OCF growth 1Y46.55%
OCF growth 3Y4.2%
OCF growth 5Y21.3%