Gartner (IT): Valuation Reset Following UBS Downgrade and New Growth Forecasts

Gartner (IT) just took center stage in the investing world after UBS issued a 'Hold' rating, directly tied to the company’s disappointing Q2 results and reduced forecasts for organic growth through 2026. The analyst specifically flagged sluggish momentum in client value, with Gartner’s own projections reflecting the setback. Organic growth expectations have fallen, highlighting concerns about near-term demand across their research, consulting, and conference segments. For investors who rely on signals from quarterly updates, this move serves as a reminder that even established research and advisory leaders can face unexpected challenges.

This downgrade comes at a time when Gartner’s share price has not shown much momentum. Over the past year, the stock has declined roughly 50%, erasing gains made during the pandemic era and revealing a trend of weakening confidence. While the company’s five-year track record remains respectable, its shorter-term performance—especially since the start of the year—suggests that concerns about growth and spending cuts are already impacting the market’s view of Gartner’s prospects.

With sentiment reset and valuations under new scrutiny, investors are left to consider whether these lowered expectations make Gartner a bargain, or if the market is simply aligning with the company’s current reality.

Most Popular Narrative: 20.2% Undervalued

According to community narrative, Gartner is currently seen as significantly undervalued, with analysts projecting a fair value that is notably higher than its latest market price. This perspective centers on anticipated resilience and recovery, even amid a challenging backdrop for earnings and revenue growth in the near term.

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 development is anticipated to boost client retention and subscription value over time, contributing to predictable recurring revenues and potentially supporting margin expansion.

What is really driving this aggressive valuation call? The narrative points to a unique financial roadmap, where future profit margins, bold earnings forecasts, and a premium market multiple combine for a surprisingly high price target. Want to find out which specific assumptions put Gartner’s fair value far above its current stock price? The true catalysts behind this upbeat outlook might surprise even industry veterans.

Result: Fair Value of $304.78 (UNDERVALUED)

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

However, client consolidation and the growing use of AI tools could threaten Gartner’s subscription growth. This may put pressure on both revenue diversification and long-term earnings stability.

Find out about the key risks to this Gartner narrative.

Another View: SWS DCF Model Puts a Different Spin on Value

While analyst forecasts build up a strong case for upside, our DCF model offers a more cautious take. It suggests the stock could be slightly overvalued instead. Which scenario will play out as reality?

Look into how the SWS DCF model arrives at its fair value.

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 you want to test these assumptions or take a different approach, you can quickly assemble your own evidence-based narrative 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 3 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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