Gartner, Inc. (IT): what the price requires

The current priced-in claim for Gartner, Inc. (IT) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.

Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/IT

Headline

FieldValue
TickerIT
CompanyGartner, Inc.
Current price$139.97/sh
CompositionInsights 78% / Conferences 10% / Consulting 9% / Other 4%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin needed2.9%
Operating margin today16.1%
Margin compression implied-13.2pp
Multiple paid11x operating income

The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.

The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.

Solve inputs: computed at a 8.1% cost of capital with 4% terminal growth over a 5-year stage.

Reconcile: at the x-ray's 9.3% required return this reads ~-1.7%/yr; the models below use their own rates.

How unusual the bet is: within-range

ReferenceValue
vs own history-0.89σ
cohort percentile (of 225 peers)9
implied end-window share0%

Valuation X-Ray

The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset0.96x4justifies
Earnings0.94x5justifies
Relative0.72x3justifies
Growth0.77x3justifies

Families that justify the price: Asset, Earnings, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.0%); the inversion above states its own rate.

Per-Model Detail (n=15)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$377.440.37xyesFCF base $1.4B, growth 2% (input: historical growth), terminal g 2.3%, WACC 7.0%, 5yr projection
DCF Exit MultipleGrowth$182.840.77xyesExit EV/EBITDA: 7.1x / 9.1x / 11.1x (bear / base = today's held flat / bull), 5yr
Relative ValuationRelative$193.350.72xyesP/E 18x (static sector reference · 2026-04), scenarios: 15.2x / 18.0x / 20.8x (bear / base = reference held flat / bull), EV/EBITDA 12x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$114.441.22xyesBV/sh $0.91, ROE (TTM) 1168.5%, ke 9.3%
Two-Stage Excess ReturnAsset$2799.400.05xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$95.271.47xyesRev $6.5B, growth 2% (input: historical growth; tapered), Terminal P/S: 1.3x / 1.5x / 1.7x (bear / base = today's held flat / bull, cap 8x)
Growth-Adjusted P/ERelative——no—
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$148.180.94xyesNormalized EBIT (5y avg op income, one-time charges added back) $1.14B × (1−24%) / WACC 7.0% → EPV (no growth)
Residual IncomeAsset$200.590.70xyesBV $0.91 + 5yr PV of (ROE (TTM) 1168.5% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham NumberAsset$14.369.75xyes√(22.5 × EPS $10.12 × BVPS $0.91) — Graham's conservative floor
EV/EBITDA RelativeRelative$191.760.73xyesEBITDA $1.26B × sector EV/EBITDA 12.0x
FCF YieldEarnings$187.230.75xyesFCF $1367.9M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$163.810.85xyesSBC-adj FCF $1.22B (FCF $1.37B − SBC $0.15B) capitalized at Kₑ
Ben Graham FormulaEarnings$8.4816.51xyesEPS $10.12 × (8.5 + 2×-5.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$1.7779.08xyesBV $0.91 × (ROIC 13.7% / WACC 7.0%) (excluded from median)
P/Sales SectorRelative$231.330.61xyesRevenue $6.47B × sector P/S 2.5x
PEG Fair ValueRelative——no—
Earnings YieldEarnings$109.411.28xyesEPS $10.12 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$1.3b
Net debt / NOPAT (after-tax)1.72x
Net debt / operating income (pre-tax)1.31x
Interest coverage16.1x
Share count CAGR (buyback)-4.2%
Burning cashno

Bullet Takeaways

Bull Case

The single number that decides Gartner is contract value, and it is the one to watch because everything else in the model hangs off it. Contract value is the book of subscription research the company has already sold and expects to bill again, and the 10-K is explicit that it "measures revenue that is highly likely to recur over a multi-year period." It reached $5.3 billion in the first quarter, growing 1% on a constant-currency basis overall but 3.5% once the shrinking Federal government book is set aside. If that ex-Federal pace is the truer read of the underlying business, the recurring base is still compounding, and a recurring base compounding at low-single digits with very high renewal rates is a far more valuable asset than the current ten-times-operating-income price implies.

The economics underneath that base are unusually good. Gartner's Insights segment, which is roughly 78% of the company, is a subscription business built on proprietary research that clients renew year after year, and the renewal math is what makes the model durable. The 10-K lists the operating measures management runs the company by, "contract value and consulting backlog growth, client retention, wallet retention, consulting utilization rates," a list that reads like a software company's retention dashboard rather than a media firm's. Free cash flow rose almost 29% year over year to $371 million in the first quarter, and adjusted EBITDA excluding a divested operation grew 5.7% to $395 million, so margins are intact even with contract value growth muted. Management guides to full-year free cash flow at or above $1.16 billion and adjusted EPS at or above $13.25, and to compound EPS growth above 12% over three years.

What the valuation methods say lines up with that quality. Capitalizing Gartner's normalized operating profit with no growth at all lands around $152, already above today's price, and applying the sector's typical earnings multiple lands near $193. The discounted-cash-flow approaches reach higher still. The price, in other words, is supported on asset, earnings, and relative-multiple grounds simultaneously, which the framework reads as a value-supported name rather than a growth bet. Capital allocation reinforces it: the company is retiring roughly 4% of its shares a year and expanded its buyback authorization alongside the first-quarter print. A high-retention subscription business buying back its own stock while it trades below what its earnings power is worth is the core of the bull case.

Bear Case

The thing a Gartner holder has to sit with is that the company sells information at a moment when information has never been cheaper to obtain. Gartner's product is curated, proprietary research that clients pay five and six figures a year to access, and the entire model rests on that research staying scarce and differentiated. As generative AI tools make synthesizing technology and market research faster and cheaper for buyers, the willingness to renew a large subscription is exactly the assumption most exposed to erosion. The 10-K is candid that selling the product "both to new and existing clients, is a challenging, costly, and often time-consuming process," and that if it cannot generate new sales, revenues suffer. The qualitative risk comes first; the muted growth numbers are the early evidence.

Only then does the price-to-fundamentals picture get uncomfortable, because the growth has in fact slowed to a crawl. Total contract value grew just 1% on a constant-currency basis, and the headline figure is being propped up by setting aside a falling Federal book. Federal spending pressure is a live and policy-driven headwind, not a one-quarter blip, and the company itself flags how dependent its reported measures are on retention metrics, citing the risk to "contract value and consulting backlog growth, client retention, wallet retention, consulting utilization rates" if it cannot keep clients engaged. A subscription business is wonderful while net retention is above 100% and treacherous the moment it slips, because the same renewal mechanics that compound value in the bull case compound losses in reverse.

The competitive and balance-sheet details add to the unease. Gartner competes for the analysts who produce its research against deep-pocketed rivals, noting in its filing "competition for qualified professionals from, among others, technology companies, market research firms, consulting firms, financial services companies" that can outspend it on talent. On the balance sheet, the company carries about $1.3 billion of net debt and runs interest coverage near eight times, comfortable but not fortress-like, and the aggressive buyback is funded from cash flow that itself depends on contract value holding. The valuation methods are not uniformly cheap either: a couple of the asset-based and conservative-floor models sit at or below the price, and the cheap-looking blended figure leans on normalized earnings and a sector multiple that assume the growth slowdown is temporary. If subscription research is structurally less defensible in an AI world, the buyback is retiring shares against an earnings base that is quietly eroding.

Valuation

At $127.44 Gartner is priced as though its earnings power is in question, and the inversion makes that explicit: the current price implies operating profit roughly flat-to-declining from here, a low bar for a business that has compounded its recurring base for years. The price sits below the level the cash-flow methods support, which is why the framework characterizes it as value and asset-supported rather than a growth bet.

The families of method mostly point the same direction, with informative exceptions. Earnings power, capitalizing normalized operating profit with no growth, lands near $152; the sector relative multiple lands near $193; residual income near $200; and the perpetual-growth discounted cash flow far higher at roughly $391, reflecting how valuable even modest durable growth is on this margin structure. The dividend models do not apply because Gartner pays none, and the deep-value floors like the Graham Number are uninformative here because the company carries almost no book equity after years of buybacks, which mechanically distorts any book-based method. The honest read is that the cheap signal comes from the earnings-power and peer-multiple methods, and both assume the recent contract-value slowdown does not become the permanent state.

Solvency is not the worry. Gartner carries about $1.3 billion of net debt against roughly $1.7 billion of liquid assets, net debt is only around 1.2 times trailing operating income, and interest coverage sits near eight times. The business generated $371 million of free cash flow in a single quarter and guides to at least $1.16 billion for the year, which comfortably funds both operations and the buyback that is shrinking the share count about 4% a year. The valuation case is therefore not about survival; it is a single judgment about whether a high-retention subscription model holds its renewal economics, in which case the price looks low against its own earnings power, or loses them to cheaper AI-driven alternatives, in which case the methods are anchored to a base that is slipping.

Catalysts

The first quarter of 2026 set the terms of the debate. Insights revenue, adjusted EBITDA excluding the divested operation, adjusted EPS, and free cash flow all came in ahead of expectations, with adjusted EBITDA up 5.7% to $395 million and free cash flow up almost 29% to $371 million on lighter capital spending. Adjusted EPS rose 17% and the board expanded the buyback authorization alongside the report. The tension was that contract value, the leading indicator for future revenue, grew only 1% on a constant-currency basis, so the market is weighing a strong cash-and-margin quarter against a soft top-line signal.

Management's full-year 2026 guidance is the bar to watch: consolidated revenue at or above $6.405 billion, EBITDA at or above $1.545 billion, adjusted EPS at or above $13.25, and free cash flow at or above $1.16 billion, with a stated path to compound EPS growth above 12% over three years and an expectation that contract-value growth accelerates through the year. The concrete catalysts are the next two quarterly contract-value prints, especially the ex-Federal trajectory, and any sign that Federal government spending pressure is stabilizing. The reaccelerate-or-not question on contract value is the event that resolves whether the stock re-rates toward the methods or stays anchored to a slowing base.

Peer Cohorts (Per Segment, With Filing Citations)

Research and Advisory (Insights) (reported)

Conferences (reported)

Consulting (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

Gartner Q1 2026 earnings call, Motley Fool, May 2026 · Gartner Q1 2026 results, Yahoo Finance, May 2026 · Gartner Q1 2026 8-K, StockTitan, May 2026

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