Shareholders of Gartner would probably like to forget the past six months even happened. The stock dropped 34.3% and now trades at $353.20. This might have investors contemplating their next move.
Is there a buying opportunity in Gartner, or does it present a risk to your portfolio? See what our analysts have to say in our full research report, it’s free.
Why Is Gartner Not Exciting?
Even though the stock has become cheaper, we're swiping left on Gartner for now. Here are one reason why IT doesn't excite us and a stock we'd rather own.
Recent EPS Growth Below Our Standards
While long-term earnings trends give us the big picture, we also track EPS over a shorter period because it can provide insight into an emerging theme or development for the business.
Gartner’s EPS grew at an unimpressive 9.3% compounded annual growth rate over the last two years. On the bright side, this performance was higher than its 6.1% annualized revenue growth and tells us the company became more profitable on a per-share basis as it expanded.
Final Judgment
Gartner isn’t a terrible business, but it doesn’t pass our quality test. Following the recent decline, the stock trades at 28.4× forward P/E (or $353.20 per share). This multiple tells us a lot of good news is priced in - we think there are better stocks to buy right now. We’d recommend looking at one of our top software and edge computing picks.
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