Is Gartner’s 2025 Slump a Long Term Opportunity for Patient Investors?

• If you have been wondering whether Gartner is a bargain hiding in plain sight or a stock past its prime, this breakdown will give you a clear, no nonsense view of what you are really paying for.
• The share price has drifted slightly higher in the short term, up 1.8% over the last week and 1.6% over the past month, but that is against a much steeper backdrop, with the stock down 51.6% year to date and 54.0% over the last year.
• Those moves come as investors reassess Gartner’s role in a tougher tech and IT spending environment, with renewed focus on how mission critical its research and advisory services really are for clients. At the same time, broader market volatility in software and information services has amplified swings in sentiment around what qualifies as a resilient, high quality compounder.
• On our framework, Gartner earns a valuation score of 4/6. This reflects that it screens as undervalued on four of six key checks, which is a solid starting point but not a slam dunk. Next, we will walk through the different valuation lenses behind that score, before exploring an even more powerful way to think about Gartner’s real worth by the end of the article.

Find out why Gartner's -54.0% return over the last year is lagging behind its peers.

Approach 1: Gartner Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model projects the cash a business is expected to generate in the future, then discounts those dollars back into today’s terms to estimate what the company is really worth now.

For Gartner, the latest twelve month Free Cash Flow is about $1.21 billion. Analysts expect free cash flow to continue growing, with projections reaching roughly $1.71 billion by 2035, based on a blend of explicit analyst forecasts out to 2027 and more conservative extrapolations beyond that. Simply Wall St models this using a two stage Free Cash Flow to Equity approach, where near term cash flows grow at analyst assumed rates before fading to more modest long run growth.

When all those future cash flows are discounted back, the DCF model arrives at an intrinsic value of about $283.36 per share. That implies the stock is trading at a 17.5% discount to its estimated fair value, which indicates potential upside if the cash flow path broadly plays out as expected.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Gartner is undervalued by 17.5%. Track this in your watchlist or portfolio, or discover 903 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Gartner.

Approach 2: Gartner Price vs Earnings

For profitable, mature businesses like Gartner, the price to earnings ratio is often the go to valuation yardstick because it links what investors pay today directly to the profits the company is generating right now.

What counts as a normal PE depends on how fast earnings are expected to grow and how risky those earnings are, with higher growth and lower perceived risk typically justifying higher multiples. Gartner currently trades on around 19.03x earnings, which is well below both the broader IT industry average of about 29.90x and the peer group average of roughly 23.42x, suggesting the market is assigning a discount to its profit stream.

Simply Wall St’s Fair Ratio metric estimates what PE Gartner should trade on, given its growth outlook, profitability, industry, market cap and risk profile, and comes out at 30.02x. That is more informative than a simple peer or sector comparison because it explicitly adjusts for the company’s specific fundamentals rather than assuming all IT names deserve the same multiple. With Gartner’s actual PE sitting meaningfully below this Fair Ratio, the stock screens as undervalued on a price to earnings basis.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1442 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Gartner Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. This is a simple tool on Simply Wall St’s Community page that lets you write the story behind your numbers by tying your view of a company’s future revenue, earnings and margins to a financial forecast, a Fair Value estimate and a clear buy or sell signal based on how that Fair Value compares with today’s price. All of this automatically updates as fresh news or earnings arrive. For Gartner, one investor might build a bullish Narrative around accelerating AI driven demand, resilient margins and aggressive buybacks that supports a Fair Value closer to the top end of analyst targets near $457. Another might assume slower Contract Value growth, sustained margin pressure and tougher competition from generative AI tools that leads to a much more conservative Fair Value nearer the low end around $225, giving both investors a transparent, numbers based way to act on their own convictions rather than relying solely on headline multiples.

Do you think there's more to the story for Gartner? Head over to our Community to see what others are saying!

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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