Gartner (IT): Valuation Insights Following Earnings Beat, Margin Pressures, and Rising AI Competition

Gartner (NYSE:IT) surprised with third-quarter earnings that topped estimates and lifted its 2025 revenue outlook. However, investors are looking closer at the story beneath the surface. Despite these headline positives, profit margins narrowed and cash flow weakened.

See our latest analysis for Gartner.

Gartner’s latest quarter saw upbeat earnings and an outlook raise, but that was not enough to offset investor nerves. The share price tumbled 7% after results, capping off a tough run. Year-to-date, the share price return stands at -52%, and the total shareholder return over the past year is even lower at -58%. While a $1 billion buyback and AI-driven strategy provided bright spots, momentum remains under pressure as profitability slips and competition heats up.

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With the stock’s sharp drop and mixed analyst sentiment, the big question now is whether Gartner is trading at a discount that reflects only short-term headwinds or if the market is fully accounting for deeper risks and muted growth ahead.

Most Popular Narrative: 19.2% Undervalued

Gartner’s most widely followed valuation narrative suggests the stock is trading well below its estimated fair value. With the last close at $230.57, the implied upside is substantial, but the path to that fair value hinges on specific growth and profitability assumptions.

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.

Want to know what’s fueling this valuation gap? This narrative banks on future margins and growth rates that might surprise you. Which bold figures turn Gartner from a value trap to a comeback candidate? Get the full breakdown and see what’s really driving the analysts’ numbers.

Result: Fair Value of $285.45 (UNDERVALUED)

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

However, ongoing corporate cost-cutting and the rapid spread of advanced AI tools could undermine Gartner’s subscription growth and put pressure on profitability going forward.

Find out about the key risks to this Gartner narrative.

Build Your Own Gartner Narrative

If you want to see the numbers for yourself or take a different approach, it’s easy to build your own Gartner story 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 1 important warning sign 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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