Gartner’s $800 Million Bond Move Might Change the Case for Investing In Gartner (IT)

• Earlier this month, Gartner, Inc. completed a public offering of US$800 million in senior unsecured notes, issuing US$350 million of 4.950% notes due 2031 and US$450 million of 5.600% notes due 2035, both priced just below face value.
• This move enables Gartner to repay borrowings under its revolving credit facility, improve liquidity, and potentially pursue share buybacks as part of its ongoing financial management efforts.
• We'll examine how Gartner's recent debt issuance, aimed at optimizing its capital structure, could influence the company's investment narrative going forward.

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Gartner Investment Narrative Recap

To be a shareholder in Gartner, you need to believe that its proprietary research and advisory services will remain essential for enterprises navigating complex technology and digital transformation decisions, even as clients increasingly adopt AI-driven alternatives. The recent US$800 million debt offering strengthens Gartner’s liquidity and financial flexibility, but it does not meaningfully shift the most important short-term catalyst, which remains recovery in core contract value growth; likewise, the main risk, disruption from generative AI and client cost-cutting, remains unchanged. Of the recent company updates, Gartner’s sizable and ongoing share buyback program, bolstered by an additional US$1 billion in authorization in September, stands out as particularly relevant. This aligns with the improved financial flexibility from the debt raise and enhances Gartner’s capital returns to shareholders, though it does little to directly impact the fundamental growth catalysts or underlying risks from market headwinds or client churn. By contrast, investors should remain mindful that continued client adoption of AI for research purposes could pressure Gartner’s margins if...

Read the full narrative on Gartner (it's free!)

Gartner's outlook anticipates $7.4 billion in revenue and $821.8 million in earnings by 2028. This projection requires 4.7% annual revenue growth and a decrease in earnings of about $478 million from current earnings of $1.3 billion.

Uncover how Gartner's forecasts yield a $285.45 fair value, a 22% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members set Gartner’s fair value estimates between US$285 and US$420 based on their forecasts, showing a wide spread across three analyses. Many expect strong demand for trusted research amid rising digital complexity, but ongoing AI adoption as a lower cost substitute may affect the company’s long-term resilience, there are diverse viewpoints to consider.

Explore 3 other fair value estimates on Gartner - why the stock might be worth as much as 80% more than the current price!

Build Your Own Gartner Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• 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.
• Our free Gartner research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Gartner's overall financial health at a glance.

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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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