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GARTNER INC (IT) Stock Fundamental Analysis

NYSE:IT - New York Stock Exchange, Inc. - US3666511072 - Common Stock

515.7  +3.64 (+0.71%)

After market: 515.7 0 (0%)

Fundamental Rating

6

We assign a fundamental rating of 6 out of 10 to IT. IT was compared to 82 industry peers in the IT Services industry. IT has an excellent profitability rating, but there are some minor concerns on its financial health. IT is quite expensive at the moment. It does show a decent growth rate.


Dividend Valuation Growth Profitability Health

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9

1. Profitability

1.1 Basic Checks

IT had positive earnings in the past year.
IT had a positive operating cash flow in the past year.
In the past 5 years IT has always been profitable.
IT had a positive operating cash flow in each of the past 5 years.
IT Yearly Net Income VS EBIT VS OCF VS FCFIT Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 200M 400M 600M 800M 1B

1.2 Ratios

IT's Return On Assets of 13.56% is amongst the best of the industry. IT outperforms 93.67% of its industry peers.
IT has a Return On Equity of 99.91%. This is amongst the best in the industry. IT outperforms 98.73% of its industry peers.
IT has a Return On Invested Capital of 20.40%. This is amongst the best in the industry. IT outperforms 93.67% of its industry peers.
IT had an Average Return On Invested Capital over the past 3 years of 21.30%. This is significantly above the industry average of 9.86%.
Industry RankSector Rank
ROA 13.56%
ROE 99.91%
ROIC 20.4%
ROA(3y)11.01%
ROA(5y)7.99%
ROE(3y)232.71%
ROE(5y)149.49%
ROIC(3y)21.3%
ROIC(5y)15.92%
IT Yearly ROA, ROE, ROICIT Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 100 -100 200 300

1.3 Margins

Looking at the Profit Margin, with a value of 17.33%, IT belongs to the top of the industry, outperforming 96.20% of the companies in the same industry.
IT's Profit Margin has improved in the last couple of years.
IT's Operating Margin of 18.69% is amongst the best of the industry. IT outperforms 93.67% of its industry peers.
IT's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 67.78%, IT belongs to the top of the industry, outperforming 86.08% of the companies in the same industry.
IT's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 18.69%
PM (TTM) 17.33%
GM 67.78%
OM growth 3Y16.52%
OM growth 5Y15.72%
PM growth 3Y31.93%
PM growth 5Y37.13%
GM growth 3Y0.29%
GM growth 5Y1.46%
IT Yearly Profit, Operating, Gross MarginsIT Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 20 40 60

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6

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), IT is creating value.
Compared to 1 year ago, IT has less shares outstanding
Compared to 5 years ago, IT has less shares outstanding
The debt/assets ratio for IT has been reduced compared to a year ago.
IT Yearly Shares OutstandingIT Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 20M 40M 60M 80M
IT Yearly Total Debt VS Total AssetsIT Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2B 4B 6B

2.2 Solvency

An Altman-Z score of 5.77 indicates that IT is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 5.77, IT is doing good in the industry, outperforming 73.42% of the companies in the same industry.
The Debt to FCF ratio of IT is 1.94, which is an excellent value as it means it would take IT, only 1.94 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of IT (1.94) is better than 69.62% of its industry peers.
IT has a Debt/Equity ratio of 2.31. This is a high value indicating a heavy dependency on external financing.
IT has a Debt to Equity ratio of 2.31. This is amonst the worse of the industry: IT underperforms 82.28% of its industry peers.
Although IT does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
Industry RankSector Rank
Debt/Equity 2.31
Debt/FCF 1.94
Altman-Z 5.77
ROIC/WACC1.85
WACC11.02%
IT Yearly LT Debt VS Equity VS FCFIT Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 1B 2B

2.3 Liquidity

IT has a Current Ratio of 1.02. This is a normal value and indicates that IT is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.02, IT is doing worse than 78.48% of the companies in the same industry.
A Quick Ratio of 1.02 indicates that IT should not have too much problems paying its short term obligations.
IT's Quick ratio of 1.02 is on the low side compared to the rest of the industry. IT is outperformed by 74.68% of its industry peers.
Industry RankSector Rank
Current Ratio 1.02
Quick Ratio 1.02
IT Yearly Current Assets VS Current LiabilitesIT Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 1B 2B 3B

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6

3. Growth

3.1 Past

IT shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.50%.
Measured over the past years, IT shows a very strong growth in Earnings Per Share. The EPS has been growing by 24.42% on average per year.
Looking at the last year, IT shows a small growth in Revenue. The Revenue has grown by 5.37% in the last year.
The Revenue has been growing by 8.24% on average over the past years. This is quite good.
EPS 1Y (TTM)-2.5%
EPS 3Y32.23%
EPS 5Y24.42%
EPS Q2Q%-2.34%
Revenue 1Y (TTM)5.37%
Revenue growth 3Y12.95%
Revenue growth 5Y8.24%
Sales Q2Q%5.36%

3.2 Future

Based on estimates for the next years, IT will show a quite strong growth in Earnings Per Share. The EPS will grow by 12.61% on average per year.
IT is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.67% yearly.
EPS Next Y8.21%
EPS Next 2Y9.49%
EPS Next 3Y11.13%
EPS Next 5Y12.61%
Revenue Next Year5.72%
Revenue Next 2Y6.67%
Revenue Next 3Y7.49%
Revenue Next 5Y8.67%

3.3 Evolution

The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
IT Yearly Revenue VS EstimatesIT Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2B 4B 6B 8B
IT Yearly EPS VS EstimatesIT Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 5 10 15

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2

4. Valuation

4.1 Price/Earnings Ratio

IT is valuated quite expensively with a Price/Earnings ratio of 44.11.
IT's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 27.96, IT is valued quite expensively.
With a Price/Forward Earnings ratio of 37.97, IT can be considered very expensive at the moment.
IT's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.11, IT is valued quite expensively.
Industry RankSector Rank
PE 44.11
Fwd PE 37.97
IT Price Earnings VS Forward Price EarningsIT Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40

4.2 Price Multiples

IT's Enterprise Value to EBITDA ratio is in line with the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of IT is on the same level as its industry peers.
Industry RankSector Rank
P/FCF 31.37
EV/EBITDA 29.83
IT Per share dataIT EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 20 -20 40 60

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates IT does not grow enough to justify the current Price/Earnings ratio.
IT has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)5.37
PEG (5Y)1.81
EPS Next 2Y9.49%
EPS Next 3Y11.13%

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0

5. Dividend

5.1 Amount

No dividends for IT!.
Industry RankSector Rank
Dividend Yield N/A

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GARTNER INC

NYSE:IT (1/17/2025, 8:08:54 PM)

After market: 515.7 0 (0%)

515.7

+3.64 (+0.71%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)11-05 2024-11-05/bmo
Earnings (Next)02-04 2025-02-04/amc
Inst Owners94.17%
Inst Owner Change-0.07%
Ins Owners1.83%
Ins Owner Change-4.98%
Market Cap39.78B
Analysts74
Price Target555.91 (7.8%)
Short Float %1.92%
Short Ratio3.39
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly Dividend1.31
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)2.56%
Min EPS beat(2)1.75%
Max EPS beat(2)3.37%
EPS beat(4)4
Avg EPS beat(4)5.47%
Min EPS beat(4)1.75%
Max EPS beat(4)12.45%
EPS beat(8)8
Avg EPS beat(8)17.8%
EPS beat(12)12
Avg EPS beat(12)20.56%
EPS beat(16)16
Avg EPS beat(16)29.53%
Revenue beat(2)0
Avg Revenue beat(2)-2.27%
Min Revenue beat(2)-2.28%
Max Revenue beat(2)-2.26%
Revenue beat(4)0
Avg Revenue beat(4)-2.58%
Min Revenue beat(4)-2.91%
Max Revenue beat(4)-2.26%
Revenue beat(8)1
Avg Revenue beat(8)-1.82%
Revenue beat(12)3
Avg Revenue beat(12)-1.08%
Revenue beat(16)6
Avg Revenue beat(16)-0.64%
PT rev (1m)0.07%
PT rev (3m)7.64%
EPS NQ rev (1m)0%
EPS NQ rev (3m)2.86%
EPS NY rev (1m)0%
EPS NY rev (3m)2.13%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.51%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.19%
Valuation
Industry RankSector Rank
PE 44.11
Fwd PE 37.97
P/S 6.48
P/FCF 31.37
P/OCF 28.95
P/B 37.36
P/tB N/A
EV/EBITDA 29.83
EPS(TTM)11.69
EY2.27%
EPS(NY)13.58
Fwd EY2.63%
FCF(TTM)16.44
FCFY3.19%
OCF(TTM)17.81
OCFY3.45%
SpS79.59
BVpS13.8
TBVpS-29.99
PEG (NY)5.37
PEG (5Y)1.81
Profitability
Industry RankSector Rank
ROA 13.56%
ROE 99.91%
ROCE 26.23%
ROIC 20.4%
ROICexc 34.25%
ROICexgc N/A
OM 18.69%
PM (TTM) 17.33%
GM 67.78%
FCFM 20.66%
ROA(3y)11.01%
ROA(5y)7.99%
ROE(3y)232.71%
ROE(5y)149.49%
ROIC(3y)21.3%
ROIC(5y)15.92%
ROICexc(3y)28.03%
ROICexc(5y)20.4%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)27.38%
ROCE(5y)20.47%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y44.9%
ROICexc growth 5Y30.97%
OM growth 3Y16.52%
OM growth 5Y15.72%
PM growth 3Y31.93%
PM growth 5Y37.13%
GM growth 3Y0.29%
GM growth 5Y1.46%
F-Score7
Asset Turnover0.78
Health
Industry RankSector Rank
Debt/Equity 2.31
Debt/FCF 1.94
Debt/EBITDA 1.82
Cap/Depr 52.78%
Cap/Sales 1.72%
Interest Coverage 250
Cash Conversion 101.97%
Profit Quality 119.21%
Current Ratio 1.02
Quick Ratio 1.02
Altman-Z 5.77
F-Score7
WACC11.02%
ROIC/WACC1.85
Cap/Depr(3y)46.15%
Cap/Depr(5y)49.42%
Cap/Sales(3y)1.66%
Cap/Sales(5y)2.11%
Profit Quality(3y)133.37%
Profit Quality(5y)177.16%
High Growth Momentum
Growth
EPS 1Y (TTM)-2.5%
EPS 3Y32.23%
EPS 5Y24.42%
EPS Q2Q%-2.34%
EPS Next Y8.21%
EPS Next 2Y9.49%
EPS Next 3Y11.13%
EPS Next 5Y12.61%
Revenue 1Y (TTM)5.37%
Revenue growth 3Y12.95%
Revenue growth 5Y8.24%
Sales Q2Q%5.36%
Revenue Next Year5.72%
Revenue Next 2Y6.67%
Revenue Next 3Y7.49%
Revenue Next 5Y8.67%
EBIT growth 1Y-2.71%
EBIT growth 3Y31.6%
EBIT growth 5Y25.26%
EBIT Next Year26.7%
EBIT Next 3Y14.58%
EBIT Next 5Y14.16%
FCF growth 1Y21.76%
FCF growth 3Y8.71%
FCF growth 5Y25.05%
OCF growth 1Y21.25%
OCF growth 3Y8.56%
OCF growth 5Y19.66%