Evaluating Gartner (NYSE:IT) Valuation as Generative AI Challenges Core Business and Analyst Growth Expectations

Gartner (NYSE:IT) is in the spotlight after recent analysis points to increasing challenges from generative AI. This new technology is beginning to undercut its core research business and put pressure on its subscription growth.

See our latest analysis for Gartner.

After peaking earlier in the year, Gartner’s share price has skidded to $258.17, with a 1-year share price return of -46.6% and a staggering 12-month total shareholder return of -50.7%. Recent AI-driven headwinds and weaker subscription growth have clearly put downward pressure on the stock, intensifying the bearish momentum in recent months. The company still maintains a strong long-term record, with five-year total shareholder returns up more than 110%.

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With Gartner’s valuation now well below its highs, the debate turns to whether shares reflect all the upcoming risks or if the market is overlooking potential for a rebound. Is this selloff an entry point, or is the slowdown already fully priced in?

Most Popular Narrative: 14.1% Undervalued

Gartner's most widely followed valuation perspective places its fair value at $300.60, a notable premium to the current share price of $258.17. This signals that analyst consensus expects meaningful upside, despite the company’s current subscription challenges.

The rollout of AskGartner, a proprietary AI-powered tool, is expected to deepen client engagement, increase user efficiency, and make Gartner's vast research more accessible. This should boost client retention and subscription value over time, contributing to predictable recurring revenues and potentially supporting margin expansion.

Read the complete narrative.

Curious what projections could justify such a premium? The answer isn’t just surface-level optimism. There is a set of bold assumptions in play, including anticipated shifts in earnings, margins, and trading multiples. Discover how these forecasts combine to shape the narrative’s substantial fair value estimate.

Result: Fair Value of $300.60 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, Gartner faces real risks if generative AI adoption accelerates or if ongoing corporate cost-cutting continues to depress renewal rates and earnings growth.

Find out about the key risks to this Gartner narrative.

Another View: Market Multiples Tell a Different Story

Looking through the lens of earnings multiples, Gartner trades at 15.5x earnings, below both the peer average of 21.6x and the US IT industry average of 31.1x. This sizable discount could signal an overlooked value opportunity, or it could be the market pricing in risks others have missed. Is this a margin of safety, or a warning?

See what the numbers say about this price — find out in our valuation breakdown.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Gartner for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Gartner Narrative

If the current story doesn’t fit your perspective, you can dive into the data yourself and shape your own conclusions in just a few minutes, Do it your way

A great starting point for your Gartner research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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