IT gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 88 industry peers in the IT Services industry. IT has an excellent profitability rating, but there are some minor concerns on its financial health. IT has a correct valuation and a medium growth rate.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year IT was profitable.
IT had a positive operating cash flow in the past year.
IT had positive earnings in each of the past 5 years.
IT had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

IT has a better Return On Assets (12.22%) than 90.91% of its industry peers.
The Return On Equity of IT (159.13%) is better than 98.86% of its industry peers.
IT has a better Return On Invested Capital (25.97%) than 95.45% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for IT is significantly below the industry average of 29.06%.
The last Return On Invested Capital (25.97%) for IT is above the 3 year average (23.67%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	12.22%
ROE	159.13%
ROIC	25.97%

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

Looking at the Profit Margin, with a value of 13.71%, IT belongs to the top of the industry, outperforming 87.50% of the companies in the same industry.
IT's Profit Margin has improved in the last couple of years.
The Operating Margin of IT (18.07%) is better than 92.05% 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 68.17%, IT belongs to the top of the industry, outperforming 88.64% of the companies in the same industry.
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	18.07%
PM (TTM)	13.71%
GM	68.17%

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%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

IT has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, IT has less shares outstanding
The number of shares outstanding for IT has been reduced compared to 5 years ago.
The debt/assets ratio for IT has been reduced compared to a year ago.

2.2 Solvency

An Altman-Z score of 4.10 indicates that IT is not in any danger for bankruptcy at the moment.
IT has a better Altman-Z score (4.10) than 68.18% of its industry peers.
The Debt to FCF ratio of IT is 2.03, which is a good value as it means it would take IT, 2.03 years of fcf income to pay off all of its debts.
IT has a Debt to FCF ratio of 2.03. This is in the better half of the industry: IT outperforms 71.59% of its industry peers.
A Debt/Equity ratio of 4.42 is on the high side and indicates that IT has dependencies on debt financing.
With a Debt to Equity ratio value of 4.42, IT is not doing good in the industry: 81.82% of the companies in the same industry are doing better.
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	4.42
Debt/FCF	2.03
Altman-Z	4.1

ROIC/WACC2.86

WACC9.07%

2.3 Liquidity

IT has a Current Ratio of 0.88. This is a bad value and indicates that IT is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of IT (0.88) is worse than 84.09% of its industry peers.
A Quick Ratio of 0.88 indicates that IT may have some problems paying its short term obligations.
IT has a Quick ratio of 0.88. This is amonst the worse of the industry: IT underperforms 82.95% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	0.88
Quick Ratio	0.88

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 25.92% 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 5.24% 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)25.92%

EPS 3Y15.05%

EPS 5Y29.24%

EPS Q2Q%10.4%

Revenue 1Y (TTM)5.24%

Revenue growth 3Y9.8%

Revenue growth 5Y8.1%

Sales Q2Q%2.68%

3.2 Future

Based on estimates for the next years, IT will show a small growth in Earnings Per Share. The EPS will grow by 3.20% on average per year.
The Revenue is expected to grow by 4.63% on average over the next years.

EPS Next Y-6.5%

EPS Next 2Y-0.47%

EPS Next 3Y3.2%

EPS Next 5YN/A

Revenue Next Year4.03%

Revenue Next 2Y3.68%

Revenue Next 3Y4.63%

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 decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 16.07, which indicates a correct valuation of IT.
Compared to the rest of the industry, the Price/Earnings ratio of IT indicates a somewhat cheap valuation: IT is cheaper than 73.86% of the companies listed in the same industry.
IT is valuated rather cheaply when we compare the Price/Earnings ratio to 27.25, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 16.94, the valuation of IT can be described as correct.
Based on the Price/Forward Earnings ratio, IT is valued a bit cheaper than 69.32% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 25.98. IT is valued slightly cheaper when compared to this.

		Industry Rank	Sector Rank
PE	16.07
Fwd PE	16.94

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, IT is valued a bit cheaper than the industry average as 70.45% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of IT indicates a rather cheap valuation: IT is cheaper than 81.82% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	14.02
EV/EBITDA	12.94

4.3 Compensation for Growth

IT has an outstanding profitability rating, which may justify a higher PE ratio.

PEG (NY)N/A

PEG (5Y)0.55

EPS Next 2Y-0.47%

EPS Next 3Y3.2%

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5. Dividend

5.1 Amount

IT does not give a dividend.

		Industry Rank	Sector Rank
Dividend Yield	0%

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GARTNER INC / IT FAQ

Can you provide the ChartMill fundamental rating for GARTNER INC?

ChartMill assigns a fundamental rating of 6 / 10 to IT.

What is the valuation status for IT stock?

ChartMill assigns a valuation rating of 6 / 10 to GARTNER INC (IT). This can be considered as Fairly Valued.

How profitable is GARTNER INC (IT) stock?

GARTNER INC (IT) has a profitability rating of 9 / 10.

What is the expected EPS growth for GARTNER INC (IT) stock?

The Earnings per Share (EPS) of GARTNER INC (IT) is expected to decline by -6.5% in the next year.