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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

3 Reasons Investors Watch Gartner (IT)

IT Cover Image

Over the past six months, Gartner’s shares (currently trading at $422.90) have posted a disappointing 18.1% loss while the S&P 500 was flat. This might have investors contemplating their next move.

Given the weaker price action, is now the time to buy IT? Find out in our full research report, it’s free.

Why Do Investors Watch Gartner?

With over 2,500 research experts guiding organizations through complex technology landscapes, Gartner (NYSE: IT) provides research, advisory services, and conferences that help executives make better decisions about technology and other business priorities.

Three Positive Attributes:

1. Constant Currency Revenue Drives Growth

In addition to reported revenue, constant currency revenue is a useful data point for analyzing IT Services & Consulting companies. This metric excludes currency movements, which are outside of Gartner’s control and are not indicative of underlying demand.

Over the last two years, Gartner’s constant currency revenue averaged 7.3% year-on-year growth. This performance was solid and shows it can expand steadily on a global scale regardless of the macroeconomic environment. Gartner Constant Currency Revenue Growth

2. Excellent Free Cash Flow Margin Boosts Reinvestment Potential

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

Gartner has shown terrific cash profitability, enabling it to reinvest, return capital to investors, and stay ahead of the competition while maintaining an ample cushion. The company’s free cash flow margin was among the best in the business services sector, averaging 20.8% over the last five years.

Gartner Trailing 12-Month Free Cash Flow Margin

3. New Investments Bear Fruit as ROIC Jumps

ROIC, or return on invested capital, is a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Gartner’s ROIC has increased significantly over the last few years. This is a great sign when paired with its already strong returns. It could suggest its competitive advantage or profitable growth opportunities are expanding.

Gartner Trailing 12-Month Return On Invested Capital

Final Judgment

Gartner possesses several positive attributes. After the recent drawdown, the stock trades at 32.3× forward price-to-earnings (or $422.90 per share). Is now a good time to buy? See for yourself in our full research report, it’s free.

Stocks We Like Even More Than Gartner

With rates dropping, inflation stabilizing, and the elections in the rearview mirror, all signs point to the start of a new bull run - and we’re laser-focused on finding the best stocks for this upcoming cycle.

Put yourself in the driver’s seat by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.

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