Gartner, Inc. Reports Strong Earnings Amid Underperformance
Company Overview and Market Performance
With a market capitalization nearing $40.1 billion, Gartner, Inc. (IT) is a leading research and advisory firm. Based in Stamford, Connecticut, the company specializes in providing technology-related insights through a variety of channels, including reports, interactive tools, briefings, consulting, advisory services, and conferences.
Comparative Stock Analysis
Over the past year, Gartner’s stock performance has not kept pace with the broader market. IT shares have increased by 20.4%, while the S&P 500 Index ($SPX) has surged 31.8% during the same period. Year-to-date, IT has gained 15.1%, significantly trailing the S&P 500’s 25.8% rise.
When comparing IT to the Technology Select Sector SPDR Fund (XLK), which has a 25.6% gain in the last 52 weeks and a 20.3% rise year-to-date, the underperformance is even clearer.
Latest Financial Results
On November 5, Gartner shares rose by 1.7% following the release of its Q3 earnings report, which exceeded expectations. The company reported revenues of $1.48 billion, marking a 5.4% increase from the previous year and slightly above Wall Street’s estimate of $1.47 billion. However, adjusted earnings per share (EPS) fell 2.3% year-over-year to $2.50, although this still beat analyst predictions of $2.45 per share. The positive revenue growth was largely attributed to their conferences segment. Additionally, Gartner raised its full-year 2024 guidance for revenue, EBITDA, EPS, and free cash flow, which may have increased investor confidence.
Analysts forecast that Gartner’s EPS will grow 4.9% year-over-year to $11.89 for the current fiscal year, which concludes in December. The company has a history of outperforming Wall Street’s earnings estimates in the last four quarters.
Analyst Ratings and Future Outlook
Among ten analysts covering Gartner, the consensus rating is “Moderate Buy,” based on four “Strong Buy,” five “Hold,” and one “Strong Sell” ratings. This outlook shows a slight decrease in optimism compared to three months ago when five analysts recommended a “Strong Buy.”
On November 7, Wells Fargo analyst Jason Haas maintained an “Underweight” rating on Gartner while increasing its price target to $470. This indicates a potential downside of 9.5% from current levels. The average price target from analysts stands at $546.11, implying a modest upside of 5.2%, while the highest target of $592 suggests a potential 14% increase.
On the date of publication, Neharika Jain did not hold any positions in the securities mentioned in this article. All information and data in this article are presented solely for informational purposes. For more information, please refer to the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
