GARTNER INC (IT) Stock Fundamental Analysis
NYSE:IT - New York Stock Exchange, Inc. - US3666511072 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to IT. IT was compared to 82 industry peers in the IT Services industry. While IT has a great profitability rating, 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.
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 4 of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 13.56%, IT belongs to the best of the industry, outperforming 92.31% of the companies in the same industry.
Looking at the Return On Equity, with a value of 99.91%, IT belongs to the top of the industry, outperforming 98.72% of the companies in the same industry.
IT has a better Return On Invested Capital (21.94%) than 93.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.56% | ||
| ROE | 99.91% | ||
| ROIC | 21.94% |
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
IT's Profit Margin of 17.33% is amongst the best of the industry. IT outperforms 94.87% of its industry peers.
In the last couple of years the Profit Margin of IT has grown nicely.
IT has a Operating Margin of 18.69%. This is amongst the best in the industry. IT outperforms 93.59% of its industry peers.
In the last couple of years the Operating Margin of IT has grown nicely.
Looking at the Gross Margin, with a value of 67.78%, IT belongs to the top of the industry, outperforming 85.90% of the companies in the same industry.
IT's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.69% | ||
| PM (TTM) | 17.33% | ||
| GM | 67.78% |
OM growth 3Y-1.75%
OM growth 5Y15.62%
PM growth 3Y6.06%
PM growth 5Y29.48%
GM growth 3Y-0.86%
GM growth 5Y1.3%
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.
There is no outstanding debt for IT. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
IT has an Altman-Z score of 5.71. This indicates that IT is financially healthy and has little risk of bankruptcy at the moment.
IT's Altman-Z score of 5.71 is fine compared to the rest of the industry. IT outperforms 76.92% of its industry peers.
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.
IT has a Debt to FCF ratio of 1.94. This is in the better half of the industry: IT outperforms 69.23% of its industry peers.
A Debt/Equity ratio of 2.31 is on the high side and indicates that IT has dependencies on debt financing.
IT has a worse Debt to Equity ratio (2.31) than 82.05% 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 Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.31 | ||
| Debt/FCF | 1.94 | ||
| Altman-Z | 5.71 |
ROIC/WACC2.08
WACC10.56%
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.
IT's Current ratio of 1.02 is on the low side compared to the rest of the industry. IT is outperformed by 79.49% of its industry peers.
IT has a Quick 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 Quick ratio, with a value of 1.02, IT is doing worse than 76.92% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.02 | ||
| Quick Ratio | 1.02 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 24.45% over the past year.
The Earnings Per Share has been growing by 29.24% on average over the past years. This is a very strong growth
Looking at the last year, IT shows a small growth in Revenue. The Revenue has grown by 6.10% in the last year.
The Revenue has been growing by 8.10% on average over the past years. This is quite good.
EPS 1Y (TTM)24.45%
EPS 3Y15.05%
EPS 5Y29.24%
EPS Q2Q%79.28%
Revenue 1Y (TTM)6.1%
Revenue growth 3Y9.8%
Revenue growth 5Y8.1%
Sales Q2Q%8.13%
3.2 Future
The Earnings Per Share is expected to grow by 6.21% on average over the next years.
The Revenue is expected to grow by 9.11% on average over the next years. This is quite good.
EPS Next Y-9.4%
EPS Next 2Y1.68%
EPS Next 3Y6.21%
EPS Next 5YN/A
Revenue Next Year7.11%
Revenue Next 2Y8.03%
Revenue Next 3Y9.11%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 34.60, IT can be considered very expensive at the moment.
The rest of the industry has a similar Price/Earnings ratio as IT.
When comparing the Price/Earnings ratio of IT to the average of the S&P500 Index (29.63), we can say IT is valued inline with the index average.
Based on the Price/Forward Earnings ratio of 38.19, the valuation of IT can be described as expensive.
The rest of the industry has a similar Price/Forward Earnings ratio as IT.
The average S&P500 Price/Forward Earnings ratio is at 22.68. IT is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.6 | ||
| Fwd PE | 38.19 |
4.2 Price Multiples
IT's Enterprise Value to EBITDA is on the same level as the industry average.
The rest of the industry has a similar Price/Free Cash Flow ratio as IT.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.68 | ||
| EV/EBITDA | 29.32 |
4.3 Compensation for Growth
IT has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.18
EPS Next 2Y1.68%
EPS Next 3Y6.21%
5. Dividend
5.1 Amount
No dividends for IT!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
487.9
-15.26 (-3.03%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners94.17%
Inst Owner Change2.41%
Ins Owners1.83%
Ins Owner Change-2.54%
Market Cap37.63B
Analysts75
Price Target560.5 (14.88%)
Short Float %2.25%
Short Ratio3.69
Dividend
| Industry Rank | Sector 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)0.83%
PT rev (3m)4.96%
EPS NQ rev (1m)-0.2%
EPS NQ rev (3m)-0.2%
EPS NY rev (1m)-5.95%
EPS NY rev (3m)-5.95%
Revenue NQ rev (1m)-0.06%
Revenue NQ rev (3m)-0.06%
Revenue NY rev (1m)-0.52%
Revenue NY rev (3m)-0.58%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 34.6 | ||
| Fwd PE | 38.19 | ||
| P/S | 6.13 | ||
| P/FCF | 29.68 | ||
| P/OCF | 27.39 | ||
| P/B | 35.35 | ||
| P/tB | N/A | ||
| EV/EBITDA | 29.32 |
EPS(TTM)14.1
EY2.89%
EPS(NY)12.77
Fwd EY2.62%
FCF(TTM)16.44
FCFY3.37%
OCF(TTM)17.81
OCFY3.65%
SpS79.59
BVpS13.8
TBVpS-29.99
PEG (NY)N/A
PEG (5Y)1.18
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.56% | ||
| ROE | 99.91% | ||
| ROCE | 26.23% | ||
| ROIC | 21.94% | ||
| ROICexc | 36.83% | ||
| ROICexgc | N/A | ||
| OM | 18.69% | ||
| PM (TTM) | 17.33% | ||
| GM | 67.78% | ||
| FCFM | 20.66% |
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3Y-1.75%
OM growth 5Y15.62%
PM growth 3Y6.06%
PM growth 5Y29.48%
GM growth 3Y-0.86%
GM growth 5Y1.3%
F-Score7
Asset Turnover0.78
Health
| Industry Rank | Sector 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 | 5.71 |
F-Score7
WACC10.56%
ROIC/WACC2.08
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)24.45%
EPS 3Y15.05%
EPS 5Y29.24%
EPS Q2Q%79.28%
EPS Next Y-9.4%
EPS Next 2Y1.68%
EPS Next 3Y6.21%
EPS Next 5YN/A
Revenue 1Y (TTM)6.1%
Revenue growth 3Y9.8%
Revenue growth 5Y8.1%
Sales Q2Q%8.13%
Revenue Next Year7.11%
Revenue Next 2Y8.03%
Revenue Next 3Y9.11%
Revenue Next 5YN/A
EBIT growth 1Y-2.71%
EBIT growth 3Y7.88%
EBIT growth 5Y24.98%
EBIT Next Year24.41%
EBIT Next 3Y14.96%
EBIT Next 5YN/A
FCF growth 1Y24.11%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y21.1%
OCF growth 3YN/A
OCF growth 5YN/A