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Gartner, Inc. (IT), founded in 1979, operates worldwide as a research and advisory firm headquartered in Stamford, Connecticut. With a market cap of $34.9 billion, it specializes in delivering insights and solutions through its research, conferences, and consulting segments. Gartner's subscription-based research segment offers on-demand access to research content, data, benchmarks, and expert insights. The conferences segment facilitates learning and networking opportunities for executives and teams, while the consulting segment provides customized analysis and support services for IT-related priorities like digital transformation and IT sourcing optimization.
Companies worth $10 billion or more are generally described as “large-cap stocks.” Gartner effortlessly fits that bill, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the tech sector. Renowned for its diverse services and expertise in providing cutting-edge research and analysis across technology domains, Gartner continues to fortify its position as a stalwart within the industry.
Despite its notable strengths, Gartner slipped 8.2% from its 52-week high of $486.54, achieved on March 21 – marking its all-time high. Shares of Gartner dipped 7% over the past three months, trailing significantly behind the S&P 500 Technology Sector SPDR’s (XLK) robust 8.7% surge during the same time frame.
In the longer term, shares of Gartner have seen a slight dip on a YTD basis but climbed 31.9% over the past 52 weeks. Despite this, it trails behind XLK's YTD gains of 17.9% and a solid 32.9% return over the last year.
To confirm the bearish trend, Gartner has traded below its 50-day and 100-day moving averages since mid-April, with slight fluctuations recently.
Gartner's struggle to keep pace with the tech sector's dynamism and evolving business landscapes has been evident in its recent underperformance. Investor sentiment waned as the company faced challenges such as declining sales and reduced net income over the past year.
The downturn was starkly illustrated on April 30 when Gartner's stock plummeted 8% following the release of its Q1 earnings results. Despite exceeding expectations for adjusted EPS, the market reacted unfavorably to the company's cautious fiscal 2024 outlook. Gartner's projected adjusted EPS of $10.90 fell short of the consensus estimate of $11.38, while its revenue forecast of $6.2 billion missed analysts' expectations of $6.29 billion. These factors compounded to drive the stock downward post-earnings, highlighting Gartner's challenges in navigating a competitive and rapidly evolving technology sector.
Gartner’s rival, Forrester Research, Inc. (FORR), has had a rough ride. Forrester's shares nosedived, plummeting 36.1% in 2024 alone and a staggering 41.6% over the past 52 weeks.
Despite its recent underperformance compared to the broader tech sector, analysts remain moderately bullish on IT’s prospects. The stock has a consensus “Moderate Buy” rating from the 11 analysts covering it, and the mean price target of $460.80 implies an upside potential of just 3.2% from the current price levels.
On the date of publication, Sristi Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
