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Valued at a market cap of almost $40.1 billion, Gartner, Inc. (IT) is a research and advisory company that offers rich domain expertise and technology-related insight necessary for informed decision-making. The Stamford, Connecticut-based company creates and distributes research content through published reports, interactive tools, briefings, consulting, advisory services, and conferences.
Shares of this management consulting company have lagged behind the broader market over the past 52 weeks. IT has gained 20.4% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 31.8%. Moreover, on a YTD basis, the stock is up 15.1%, compared to SPX’s 25.8% gains.
Zooming in further, IT’s underperformance becomes even more evident when compared to the Technology Select Sector SPDR Fund’s (XLK) 25.6% gain over the past 52 weeks and 20.3% return on a YTD basis.
On Nov. 5, IT shares rose 1.7% after its better-than-expected Q3 earnings release. The company reported revenues of $1.48 billion, which increased 5.4% from a year ago and marginally surpassed the Wall Street estimates of $1.47 billion. However, its adjusted EPS decreased 2.3% year-over-year to $2.50 but exceeded the consensus estimates of $2.45 per share. IT primarily benefited from significant growth in revenues from its conference segment. Moreover, it raised its full-year 2024 guidance for revenue, EBITDA, EPS, and free cash flow, which might have further bolstered investor confidence.
For the current fiscal year, ending in December, analysts expect IT’s EPS to grow 4.9% year over year to $11.89. The company has a solid track record of consistently beating Wall Street's bottom-line estimates in each of the last four quarters.
Among the ten analysts covering the stock, the consensus rating is a “Moderate Buy,” which is based on four “Strong Buy,” five “Hold,” and one “Strong Sell” rating.
The configuration is slightly less bullish than three months ago, with five analysts suggesting a “Strong Buy.”
On Nov. 7, Wells Fargo analyst Jason Haas maintained an “Underweight” rating on Gartner and raised its price target to $470, which indicates a 9.5% downside potential from the current levels.
The mean price target of $546.11 represents a modest 5.2% upside from IT’s current price levels, while the Street-high price target of $592 suggests an upside potential of 14%.
