IT

We rate GARTNER INC (IT) as a Reduce with a composite score of 42.1/100 at a current price of $147.66. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.

The rating is primarily driven by strength in quality (69th percentile) and value (50th percentile), which together account for the majority of the composite score. Offsetting weakness in momentum (21th percentile) and investment (31th percentile) tempers our overall conviction. We assign a Wide Moat rating (70/100), High uncertainty, and Standard capital allocation.

Key items to watch: momentum to confirm whether the current price trend has legs; balance sheet deleveraging progress. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

GARTNER INC holds a top-quartile position (#0 of 50) within the Services sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 42.1/100 places it at rank #3266 in our full 7,333-stock universe. With a $19.9B market capitalization, GARTNER INC operates at meaningful scale within the Services sector, providing competitive advantages in distribution, procurement, and customer reach.

Revenue contraction of -4% combined with momentum at the 21th percentile paints a cautious picture of the near-term business outlook. The market appears to be pricing in continued challenges, and a catalyst for reversal is not clearly visible from current data.

The margin cascade tells an important story: gross margins of 69% (+9.3pp vs sector) narrow to operating margins of 15% (+11.4pp vs sector) and net margins of 14.6%, yielding a gross-to-net conversion rate of 21%. This conversion rate is typical for the sector, suggesting a standard cost structure without notable efficiency advantages or disadvantages.

At a current price of $147.66, GARTNER INC is trading near fair value based on current fundamentals. Our value factor score of 50/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 12.0x (a 49% discount to the sector median of 23.7x), EV/EBITDA of 9.5x (near the sector median), P/B of 33.9x, P/S of 1.7x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a High uncertainty rating to GARTNER INC. Key risk factors include significant leverage (2427% debt-to-equity). The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.

Specific risk factors that inform our assessment include: significant leverage (2427% debt-to-equity). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 50th percentile and quality factor at the 69th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 69% provide a buffer against cost pressures. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile warrants caution and disciplined position management.

We rate GARTNER INC's capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 282.0%, and the balance sheet is managed within acceptable parameters (D/E: 2427%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; GARTNER INC falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. Absent a dividend, the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, GARTNER INC receives a Reduce rating with a composite score of 42.1/100 (rank #3266 of 7,333). Our quantitative framework assigns a Wide Moat (70/100, trend: stable), High uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 44/100.

Our analysis does not support a constructive view on GARTNER INC at this time. The combination of the current quantitative profile, high uncertainty, and standard capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.