IT Stock Study (11-13-25)

I recently did a stock study on Gartner Inc. (IT, $230.13). The previous study is here.

CFRA writes:

     > Gartner, Inc. (IT) is one of the world’s largest research and
     > advisory providers. [Gartner] supplies business leaders with
     > indispensable insights, advice, and tools to achieve their goals and
     > help facilitate business outcomes. [Gartner] currently services
     > more than 15,000 organizations in over 100 countries worldwide.

Over the past decade, the medium-sized company has grown sales and earnings at annualized rates of 12.4% and 29.7% [2017 excluded from full analysis as $0.04/share EPS—primarily due to significant one-time expenses from CEB acquisition (per Google AI)—otherwise inflates growth to 46.5%]. Lines are mostly up, straight, and parallel except for sales dip in ’20 and EPS decline in ’17-’18. Five- (10-) year EPS R^2 is 0.79 (0.78) and Value Line (VL) scores Earnings Predictability at 80.

Over the past decade (excluding ’17), PTPM leads peer and industry averages while climbing from 12.6% (’15) to 22.1% (’24) with a last-5-year mean of 17.8%. ROE swings wildly from -1819% (’16) to 226.9% (’21) with a last-5-year mean (excluding ’21 and -1215% for ’22) of 98.3%. Debt-to-Capital is greater than peer and industry averages despite falling from 119% (’15) to 68.1% (’24) with a last-5-year mean of 81.1%.

Quick Ratio is 0.73 and Interest Coverage 9.3 per M* who assigns “Narrow” [quantitative] Economic Moat and gives a Financial Health grade of C (per BI website). VL gives a B++ rating for Financial Strength. Rather than pay down debt, the company bought back a record $1B in stock for 2025 Q3.

With regard to sales growth:

• YF projects YOY 3.1% and 3.5% for ’25 and ’26, respectively (based on 11 analysts).
• Zacks projects YOY 3.5% and 3.3% for ’25 and ’26, respectively (4 analysts).
• VL projects 5.5% annualized growth from ’24-’29.
• CFRA projects 3.5% YOY and 3.7% per year for ’25 and ’24-’26, respectively.
• M* gives ACE 2-year growth of 3.3% per year.

My 2.0% forecast is below the range.

With regard to EPS growth:

• MarketWatch projects 9.0% and 8.1% growth per year for ’24-’26 and ’24-’27, respectively (based on 16 analysts).
• Nasdaq.com projects 6.9% YOY and 9.7% per year for ’26 and ’25-’27 (4 / 4 / 2 analysts for ’25 / ’26 / ’27).
• Seeking Alpha projects 5-year annualized growth of 18.0%.
• Finviz gives ACE 5-year annualized growth of 2.2% (6).
• LSEG estimates LTG at 1.5%.
• YF projects YOY 9.2% contraction and 5.5% growth for ’25 and ’26, respectively (12).
• Zacks projects YOY 9.2% contraction and 6.9% growth for ’25 and ’26, respectively (4).
• VL projects annualized growth of 7.2% from ’24-’29.
• CFRA projects contraction of 10.2% YOY and 2.8% per year for ’25 and ’24-’26 along with 3-year CAGR of 5.0%.

My 2.0% forecast is near bottom of the long-term-estimate range (mean of four: 7.2%). Initial value is ’24 EPS of $16.00/share rather than 2025 Q3 $11.40 (TTM).

My Forecast High P/E is 30.0. Over the past 10 years (excluding outliers over 100 in ’17-’18), high P/E decreases from 45.6 (’15) to 34.9 (’24) with last-5-year mean of 41.8 and last-5-year-mean average P/E of 32.6. I am below the range.

My Forecast Low P/E is 16.0. Over the past 10 years [excluding 2259 (’17) and 84.2 (’18) outliers], low P/E decreases from 36.1 (’15) to 25.7 (’24) with last-5-year mean of 23.3. I am forecasting below the range (16.3 in ’21).

My Low Stock Price Forecast (LSPF) is $160.00. Default ($256.00) based on initial value given above is INVALID on today’s date. My [arbitrary] projection is 30.5% below the previous closing price and 28.1% less [perhaps unreasonably low, one could argue] than the 52-week low.

These inputs land IT in the BUY zone with a U/D ratio of 4.3. Total Annualized Return (TAR) is 18.2%.

PAR (using Forecast Average–not High–P/E) of 12.0% is less than I seek for a medium-size company. If a healthy margin of safety (MOS) anchors the study, then I can focus on TAR instead.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on only 8 studies done in the past 90 days (my study and 6 outliers excluded) averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, and Forecast Low P/E are 6.5%, 6.0%, 33.1, and 20.7. Although sample size is too small for a valid comparison, I am lower across the board. VL projects a future average annual P/E of 25.0: less than MS (26.9) but greater than mine (23.0).

MS high / low EPS are $21.77 / $16.25 versus my $17.67 / $16.00 (per share). My high EPS is less due to a lower growth rate. VL’s $17.00 high EPS is less than both.

MS LSPF of $217.60 implies a Forecast Low P/E of 13.4: much less than the above-stated 20.7. MS LSPF is 35.3% less than the default $16.25/share * 20.7 = $336.38 (INVALID on today’s date) resulting in much more conservative zoning. MS LSPF is still 36.0% greater than mine, however.

MOS is robust in this study because my inputs are near or below historical/analyst averages/ranges. Tiny sample size aside, MS TAR (24.3%) exceeding mine by 6.1% per year and my lower LSPF are also suggestive of MOS.

With regard to valuation, PEG is 0.54 and 9.9 per M* and my projected P/E (low growth rate): massively conflicting. Relative Value [(current P/E) / 5-year-mean average P/E] is very inexpensive at 0.62. “Quick and dirty DCF” [CFRA] has stock undervalued by 41% [39%].

Per U/D, IT is a BUY under $252/share. BI TAR criterion is met [530.1 / ((14.87 / 100 ) +1 ) ^ 5] ~ $265 given a forecast high price ~$530 (no dividend).

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