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

In the published model solve dated 2026-Q2, anchored at $198.39, Gartner, Inc. (IT) is priced for +1.5% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-24.

Generated: 2026-08-30 · Exported: 2026-08-31 · Source: https://boothcheck.com/report/IT

Headline

What The Price Assumes (Inversion)

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

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 8.6% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

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.

Families that justify the price: Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.5%); the inversion above states its own rate.

Per-Model Detail (n=11)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• The number that governs this business is not revenue but contract value, the annualised value of subscriptions on the books, and it has stalled at $5,268.0 million after years of compounding at a double-digit pace.

• The specific risk is that the product itself is what generative AI substitutes, and the early evidence is consistent with it: first-quarter revenue slipped 2% to $1,511.0 million and the consulting line fell 15%.

• Second-quarter results arrive on August 4, 2026, and the contract-value line will matter more than the earnings line, because it is the leading indicator of every quarter that follows.

Bull Case

Subscription research is an unusual business to own, because the cash arrives before the work does. Clients commit annually, pay up front, and the obligation to serve them sits on the balance sheet as deferred revenue while the money sits in the bank. That is why a company whose revenue slipped 2% in the first quarter still converted the quarter into $371 million of free cash flow, a gain of 29% on the prior-year quarter, and carries rolling four-quarter free cash flow of $1.3 billion on a business guided to at or above $6.405 billion of revenue for the year. Roughly a fifth of every revenue dollar reaches free cash flow. Very few businesses of this size do that.

The economics under it have been improving even as the top line has not. Insights, the research subscription engine and about 78% of the annual mix, produced $1,294.2 million of first-quarter revenue at a 78% gross contribution margin, up 120 basis points on the year before. Conferences, the part most exposed to whether people still want to be in a room together, grew 8% to $78.3 million. Those are not the numbers of a business being abandoned. They are the numbers of a business whose renewals are holding while new commitments slow.

Capital allocation is where the bull case gets concrete. In the first quarter alone the company retired 3,310,253 shares for $534.6 million at an average of $158.49 each, and the count outstanding stood at 66,951,889 by the start of May. Over the past four years the share count has fallen at about 4.2% a year. Today's quote is below the average price paid for that first-quarter block, which means every dollar spent from here retires more of the earnings stream than the same dollar did three months ago. Management is not signalling with a token authorisation; it is spending more than a third of a year's free cash flow in a single quarter.

The balance sheet supports the pace. Cash stood at $1,666.9 million against $3,005.0 million of senior-note principal at the end of March. Net borrowings run at roughly 1.3 times a year of operating profit, and operating income covers the interest bill about 16.1 times over. That is a company with room to keep buying, keep investing, and absorb a bad year without renegotiating anything.

What makes the bull case interesting rather than merely defensive is the shape of what has actually changed. Global technology sales contract value grew 0.4% on a currency-neutral basis to $4.0 billion while global business sales, the non-IT side selling to finance, HR, supply chain and legal functions, grew 3.2% to $1.3 billion. The part of the franchise closest to technology budgets is the part that stalled. The part serving the rest of the enterprise is still growing. If the correct diagnosis is a spending reallocation inside IT departments rather than the obsolescence of paid analysis, then a business that renews most of its clients every year, prices in advance, and buys back a twentieth of itself annually does not need growth to reward an owner. It needs the base to hold.

Bear Case

The unusual feature of this situation is that there is no valuation gap to argue about. Every family of method lands at or above today's quote: peer multiples at 0.72 times, the cash-flow methods at 0.76, and capitalised earnings power at 0.94. The market is already pricing this business for decline. At roughly 11 times operating income, the quote sits below what even a steady annual contraction in operating profit would warrant. So the bear case cannot be that the shares are expensive. It has to be that the market is right.

The evidence it is right sits in the one number that leads everything else. Contract value, the annualised book of subscriptions, reached $5,268.0 million at the end of the first quarter, up about 1% on a currency-neutral basis. Within it, the technology-focused book grew 0.4%. Contract value leads revenue by roughly a year, because it is what gets recognised over the following twelve months. A book growing at 0.4% does not produce a revenue line growing at 5%, and the first quarter showed it: revenue of $1,511.0 million, down 2%, with consulting down 15%.

The mechanism behind the stall is the part that should worry a holder. Gartner sells synthesis: an analyst reads the market, talks to vendors, and hands the client a defensible view. Large language models do a recognisable imitation of that for a fraction of the price, and enterprises now have budget lines for building their own. The company has answered with its own AI product, which is the correct response and also an admission that the interface between client and insight has changed. A low multiple protects an owner when the denominator is stable. It protects nobody when the denominator is the thing at risk, and a business earning less each year at a constant multiple still loses value every year.

The balance sheet is thinner than the cash balance suggests. Years of aggressive repurchase have taken book equity to essentially nothing: the reported book value per share is under a dollar, which is why the asset-based methods produce numbers ranging from absurd to meaningless for this company. There is no accounting floor here. Against that sits $3,005.0 million of senior-note principal. Coverage is comfortable today at about 16.1 times operating income, but coverage is a ratio, and the numerator is the item in question.

Capital allocation compounds the exposure rather than hedging it. Spending $534.6 million in a single quarter to retire 3,310,253 shares at an average of $158.49 concentrates the remaining owners' claim on the same uncertain earnings stream. The shares were bought above where they trade now. Buying back stock is the right call when the business is durable and mispriced; it is the wrong call when the business is repricing for a reason, and from inside the company those two situations look identical.

There is a smaller signal worth noting. The digital markets division was sold to G2 for $110 million. Divesting a non-core asset is ordinary housekeeping. Divesting it for that figure says something about what buyers will pay for a technology-content business right now, which is the same market that sets the price of the parent.

Valuation

Begin with what the quote is not doing. At $139.52, the market is paying roughly 11 times a year of operating profit for a business that generated $316.1 million of operating income in a single quarter and guides to at or above $1.545 billion of EBITDA for the year. That is not a price with growth in it. It is a price below the level even a persistent annual contraction in operating profit would support, which is a different statement entirely: the market has already written down the base, not just the trajectory.

Every family of method agrees, and that agreement is itself the finding. Peer multiples put the quote at 0.72 times where they land. The cash-flow methods, which project the current business forward and exit on today's own multiple held flat, land at 0.76 times. Capitalising current earnings power with no growth at all still lands at 0.94 times. There is no family here that needs an optimistic assumption to reach today's price, which is the opposite of the usual pattern and is what a market pricing structural decline looks like from the inside.

The asset-based lens deserves one sentence and no number. Book equity per share is under a dollar, because more than a decade of repurchases has retired most of the accounting capital, so methods anchored on book value produce results ranging from tiny to enormous depending on which end of the arithmetic they lean on. For a business whose assets are analyst relationships and a renewal book, that is the correct outcome and not a useful one.

What has to be true is straightforward, and it lives in one line. Contract value ended the quarter at $5,268.0 million, up about 1% currency-neutral, with the technology-focused book up 0.4% and the business-function book up 3.2%. Revenue follows that book with roughly a year's lag. Hold the book flat and the current earnings stream is roughly what an owner gets, indefinitely, at eleven times. Let it fall a few points a year and the multiple that looks cheap today expands on its own, without the shares moving at all. The peer set the research business is measured against, FactSet, Morningstar, S&P Global and Moody's, sells data and ratings embedded in workflows and contracts; Gartner sells written judgment. The distinction did not matter much when both were growing.

Solvency bounds the downside rather than driving it. Cash of $1,666.9 million sat against $3,005.0 million of senior-note principal at the end of March, leaving net borrowings around 1.3 times a year of operating profit and interest covered about 16.1 times over. Free cash flow guided to at or above $1.16 billion for the year exceeds the entire net borrowing position. Nothing about the capital structure forces an outcome here. The outcome will be decided by whether enterprises keep paying for someone else to read the market for them.

Catalysts

August 4, 2026 is the next scheduled information event, when second-quarter results are due before the open. The line to read first is contract value, not revenue. Revenue in any given quarter reflects a book that was written up to a year earlier; contract value reflects what clients are committing to now. It closed the first quarter at $5,268.0 million, up about 1% on a currency-neutral basis, with the technology-focused book up 0.4% and the business-function book up 3.2%. A second consecutive quarter near zero would confirm the trend; a reacceleration in the technology book would be the single most informative surprise available.

Guidance is the second item, and it has been moving in one direction. The full-year outlook stands at or above $6.405 billion of revenue, at or above $1.545 billion of EBITDA and at or above $1.16 billion of free cash flow. Against a 2025 revenue base near $6.5 billion, that outlook describes a year of decline rather than growth, and management has now revised it downward more than once. Whether the August print holds that line or trims it again will do more to the shares than the earnings figure attached to it.

The third item runs continuously rather than on a date. Repurchases consumed $534.6 million in the first quarter alone, retiring 3,310,253 shares, and roughly $0.7 billion of authorisation remained at the end of March. At the current quote that authorisation buys a meaningfully larger slice of the company than it did in the first quarter. Watch the pace, because it is the clearest available read on how management sees the durability of the renewal book from the inside.

Peer Cohorts (Per Segment, With Filing Citations)

Research and Advisory (Insights) (reported)

• FDS (FACTSET RESEARCH SYSTEMS INC.)
• FY2025 10-K: …of the acquired software technologies. We involved our valuation specialists to assist with our evaluation of the Company's valuation methodology and significant assumptions used in the fair value estimates. /s/ Ernst & Young LLP We have served as the Company's auditor since 2013. Stamford, Connecticut October 22,…
• FY2025 10-K: …reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately…
• MORN (MORNINGSTAR, INC.)
• FY2025 10-K: …beyond our control, such as negative news about our clients, suppliers, employees, consultants, or competitors, regulatory scrutiny, and adverse publicity about our products or industries that we operate in. Expanding our brand to less mission-aligned products may also harm our reputation or dilute our brand. As our…
• FY2025 10-K: …Even minor errors may require us to temporarily remove ratings or research, potentially reducing the perceived value of our products or causing us to fall short of service-level commitments to customers. Some of our products are used by clients to support investment processes, account reporting, and other activities…
• SPGI (S&P Global Inc.)
• FY2025 10-K: …activities, or adversely affect our ability to compete and/or our remuneration, or result in changes in the demand for our products and services. Increasing use of AI across our Ratings business subjects Ratings to evolving and potentially complex legal requirements, which may result in additional compliance…
• FY2025 10-K: …are non-cyclical in nature - and that are usually tied to underlying business metrics such as vehicle manufacturers marketing spend or safety recall activity - as well as consulting and advisory services. Non-subscription revenue at Energy is primarily related to conference sponsorship, consulting engagements,…
• MCO (Moody’s Corporation)
• FY2025 10-K: . and worldwide and on the Company's own operations and personnel; - other matters that could affect the volume of debt and other securities issued in domestic and/or global capital markets, including regulation, increased utilization of technologies that have the potential to intensify competition and accelerate…
• FY2025 10-K: 4 MOODY'S 2025 10-K Table of Contents PROSPECTS FOR GROWTH Moody's believes that the overall long-term outlook remains favorable for continued growth from the offerings of both of our reportable segments. Moody's growth is influenced by a number of trends that impact the market for our products, including: Enablement…

Conferences (reported)

• SPGI (S&P Global Inc.)
• FY2025 10-K: Contents Energy Energy is a leading independent provider of information and benchmark prices for the energy and commodity markets. Energy provides essential price data, analytics, industry insights and software & services, enabling the energy and commodity markets to perform with greater transparency and efficiency.…
• FY2025 10-K: …us-gaap:SeniorNotesMember 2025-03-31 0000064040 spgi:SustainabilityLinkedSeniorNotes270Due2029Member srt:ScenarioForecastMember us-gaap:SeniorNotesMember us-gaap:SubsequentEventMember 2026-01-01 2026-03-01 0000064040 spgi:SeniorNotes4.25Due2031Member us-gaap:SeniorNotesMember 2025-12-04 0000064040…
• MCO (Moody’s Corporation)
• FY2025 10-K: …mco:MoodysInvestorsServiceMember us-gaap:TransferredAtPointInTimeMember 2023-01-01 2023-12-31 0001059556 us-gaap:TransferredAtPointInTimeMember 2023-01-01 2023-12-31 0001059556 us-gaap:OperatingSegmentsMember mco:MoodysAnalyticsMember us-gaap:TransferredOverTimeMember 2025-01-01 2025-12-31 0001059556…
• FY2025 10-K: TransactionRevenueMember mco:KYCMember mco:MoodysAnalyticsMember 2024-01-01 2024-12-31 0001059556 us-gaap:OperatingSegmentsMember mco:RecurringRevenueMember mco:KYCMember mco:MoodysAnalyticsMember 2024-01-01 2024-12-31 0001059556 us-gaap:OperatingSegmentsMember mco:KYCMember mco:MoodysAnalyticsMember 2024-01-01…
• FDS (FACTSET RESEARCH SYSTEMS INC.)
• FY2025 10-K: Growth Officer from 2022 to 2024 and Chief Administrative Officer of the Corporate and Investment Bank. Earlier in his career, he was a Managing Director and Head of Corporate Strategy for JPMorgan and a Partner and Co-Head of Global Corporate and Investment Banking for McKinsey & Company. Mr. Viswanathan holds a…
• FY2025 10-K: …Information 95 PART III Item 10. Directors, Executive Officers and Corporate Governance 96 Item 11. Executive Compensation 96 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 96 Item 13. Certain Relationships and Related Transactions, and Director Independence 96…
• MORN (MORNINGSTAR, INC.)
• FY2025 10-K: …of a cybersecurity event, we assign a significance rating to the event. All cybersecurity events that meet or exceed designated criteria are escalated to the CISO or CIO. Cybersecurity events which may be significant are further escalated to the Cyber Incident Disclosure Committee (Cyber Committee). The Cyber…
• FY2025 10-K: …These statements involve known and unknown risks and uncertainties that may cause the events we discuss not to occur or to differ significantly from what we expect. For us, these risks and uncertainties include, among others: • failing to achieve the anticipated benefits of the Center for Research in Security Prices,…
• TRI (THOMSON REUTERS CORPORATION)
• FY2025 40-F: …by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐ Auditor Name : PricewaterhouseCoopers LLP Auditor Location : New York, NY , USA Auditor Firm ID : 238 UNDERTAKING AND CONSENT TO SERVICE OF PROCESS a. Undertaking. The Registrant undertakes to make…
• FY2025 40-F: …the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark…
• HURN (HURON CONSULTING GROUP INC.)
• FY2025 10-K: …Reform Act of 1995. Forward-looking statements are identified by words such as "may," "should," "expects," "provides," "anticipates," "assumes," "can," "will," "meets," "could," "likely," "intends," "might," "predicts," "seeks," "would," "believes," "estimates," "plans," "continues," "goals," "guidance," or…
• FY2025 10-K: ), enterprise resource planning ("ERP"), enterprise performance management ("EPM"), and customer relationship management ("CRM") systems; data management, AI and automation; technology managed services; and payor core F-39 Table of Contents HURON CONSULTING GROUP INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS…
• FCN (FTI CONSULTING, INC)
• FY2025 10-K: …client that accounted for more than 10% of its respective total segment revenues. In some cases, we may have engagements through law firms that represent a larger percentage of our consolidated revenues or the revenues of a segment; however, in these situations, each law firm engages us on behalf of multiple clients.…
• FY2025 10-K: …and schedules (or similar attachments) are not filed. FTI Consulting, Inc. will furnish supplementally a copy of any omitted annex, exhibit or schedule (or similar attachment) to the Securities and Exchange Commission upon request. ITEM 16. FORM 10-K SUMMARY None. 88 SIGNATURES Pursuant to the requirements of Section…
• BAH (BOOZ ALLEN HAMILTON HOLDING CORPORATION)
• FY2025 10-K: …the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only…
• FY2025 10-K: …about these legal proceedings and investigations in Note 19, "Commitments and Contingencies," to the consolidated financial statements contained within this Annual Report on Form 10-K. These legal proceedings seek various remedies, including claims for monetary damages in varying amounts, none of which are considered…

Consulting (reported)

• ACN (Accenture plc)
• FY2025 10-K: …consulting. Economic and geopolitical volatility and uncertainty is particularly challenging because it may take some time for the effects and changes in demand patterns resulting from these and other factors to manifest themselves in our business and results of operations. Changing demand patterns from increased…
• FY2025 10-K: …adjust levels of new hiring and use involuntary terminations as a means to keep our supply of skills and resources in balance with changes in client demand. In addition, we adjust compensation to provide market relevant pay based on the skills of our people and locations where we operate. We also consider a variety…
• CTSH (COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION)
• FY2025 10-K: …judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain. Changes to these estimates could have a material effect on our results of operations and financial condition. Our significant accounting policies are described in Note 1 to our consolidated financial…
• FY2025 10-K: …Summary of Significant Accounting Policies The terms "Cognizant," "we," "our," "us" and "the Company" refer to Cognizant Technology Solutions Corporation and its subsidiaries unless the context indicates otherwise. Description of Business. We are one of the world's leading professional services companies, engineering…
• DXC (DXC Technology Co)
• FY2025 10-K: …construction, and deployment phases. Failure to perform satisfactorily under these agreements may expose us to legal liability, result in the loss of customers or harm our reputation, which could harm the financial performance of our IT services business. Performance under contracts, including those on which we have…
• FY2025 10-K: …variations do not materially affect our long-term performance, they may contribute to periodic fluctuations in revenue, expenses, and profitability. We continue to monitor these trends and adjust our operations as needed to optimize performance throughout the year. Competition The IT and professional services markets…
• EPAM (EPAM SYSTEMS, INC.)
• FY2025 10-K: …of software product and platform development services including product research, customer experience design and prototyping, program management, component design and integration, full lifecycle software testing, product deployment and end-user customization, performance tuning, product support and maintenance,…
• FY2025 10-K: …projects, including training, administration, and opening facilities in existing and new geographies. Our growth has significantly slowed at times, particularly during 2023 and the first half of 2024, due to reduced client demand resulting primarily from uncertain macroeconomic conditions. Rapid growth followed by…
• INFY (INFY)
• (no filing in the citation store)

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

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.