GARTNER INC (IT)

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AI: Undervalued

Price checkThe shares look undervalued even after their sharp post-earnings rebound.

Yahoo Finance recorded Gartner at $185.79 on August 4, the latest reliable close retrieved. Using 66.6 million second-quarter diluted shares gives a roughly $12.4 billion market value. Against management’s $1.19 billion minimum 2026 free-cash-flow outlook—cash left after running and investing in the business—the price is about 10.4 times cash flow. Adding $1.49 billion of net debt produces an enterprise value near 11.7 times cash flow; the price is also 13.3 times guided adjusted earnings. Those modest multiples support an undervalued verdict unless cash deteriorates materially. The verdict applies to this verified August 4 price, not an unverified August 17 quote.

Big pictureCash generation remains strong, but the core subscription engine is growing slowly.

Revenue rose from $4.10 billion in 2020 to $6.50 billion in 2025, about 10% annualized, while operating cash flow increased from $903 million to $1.29 billion. Momentum weakened in 2025: revenue grew 3.7%, but operating income fell 11.3% and operating cash declined 13.1%. First-half 2026 revenue slipped 1.1%, partly because Digital Markets was sold, while net income grew 10% and operating cash rose 13%. Second-quarter adjusted revenue grew only 1.8% without currency effects; Conferences grew 14.2%, but Consulting fell 8.8%, showing meaningful cyclicality outside subscriptions.

Business strengthHigh recurring margins support cash, while buybacks have reduced balance-sheet protection.

Insights produced a 77.5% second-quarter contribution margin, helping Gartner generate $749 million of first-half free cash flow. The balance sheet is usable but no longer conservative: June cash was $1.49 billion against $2.98 billion of debt, and current liabilities exceeded current assets by $439 million. Management reported gross debt at 1.8 times adjusted operating profit before interest and non-cash charges, which remains manageable. However, $1.08 billion of first-half repurchases exceeded free cash generation. Diluted shares fell 14% year over year to 66.6 million, easily offsetting $87 million of share-based pay, but net debt increased substantially.

What could change the storyFaster contract growth would unlock upside; client losses or artificial intelligence substitution threaten it.

The strongest bull case is a recovery in subscription demand: contract value grew 1.7% in the second quarter, accelerating from 1.0%, while adjusted profit and cash guidance increased. A return to mid-single-digit contract growth with stable Insights margins would make today’s roughly 10-times cash-flow price unusually low. The bear case is visible in a 4.5% decline in client enterprises and only 1.1% growth in Technology Sales contract value. If cheaper artificial-intelligence tools reduce willingness to pay for Gartner research, or cash flow falls below roughly $1 billion while repurchases continue, the apparent discount could disappear.

$185.79 price considered

AI: News

Second-quarter beatSecond-quarter profits and cash beat expectations, prompting higher guidance and a sharp share-price rebound.

On August 4, Gartner reported $1.68 billion of revenue, $4.37 of adjusted earnings per share and $378 million of free cash flow. Adjusted earnings exceeded the cited consensus by 15.9%. Management raised minimum 2026 adjusted earnings guidance from $13.25 to $14 and free-cash-flow guidance from $1.16 billion to $1.19 billion, despite trimming adjusted revenue guidance. Yahoo Finance recorded the shares closing at $185.79, up 22.6% from $151.53; the timing strongly associates the move with the report, although it does not prove sole causation.

First-quarter cash strengthEarly-year cash improved despite slow subscription growth and weaker consulting demand.

On May 5, Gartner reported first-quarter free cash flow of $371 million, up 28.7%, and adjusted earnings of $3.32 per share, up 11.4%. Contract value grew just 1.0% without currency effects, while Consulting revenue fell 16.8% on that basis. Management nevertheless raised its 2026 cash and earnings outlook, repurchased $535 million of shares and disclosed another $600 million of repurchase authorization. The combination supported per-share results, but the weak contract and consulting figures showed that operating demand had not fully recovered.

Digital Markets saleGartner sold Digital Markets, simplifying the company but lowering reported revenue comparisons.

Gartner completed the Digital Markets sale on February 5 for approximately $104.8 million net of transferred cash and recorded a $6.1 million pretax gain. The disposed operation previously included software-review properties and represented the former Other segment. Removing it explains much of 2026’s reported revenue decline: second-quarter total revenue fell 0.6%, while revenue adjusted for the divestiture grew 2.8%. The transaction concentrates Gartner on Insights, Conferences and Consulting, but it also makes unadjusted year-over-year growth look weaker during 2026.

Revenue

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2021

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2025

Net income

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2025

Free cash flow

No reported data

Total cash / debt

CashTotal debt

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2025

Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015	2014	2013	2012	2011	2010	2009	2008
Revenue	$6.50B	$6.27B	$5.91B	$5.48B	$4.73B	$4.10B	$4.25B	$3.98B	$3.31B	$2.44B	$2.16B	$2.02B	$1.78B	$1.62B	$1.47B	$1.29B	$1.14B	$1.28B
Gross profit	$4.47B	$4.28B	$4.04B	$3.82B	—	—	—	—	—	—	—	$1.23B	$1.08B	$963.7M	$863.2M	$742.3M	$642.9M	—
Operating expenses	—	—	—	—	—	—	—	—	—	—	—	$948.1M	$802.7M	$718.0M	$649.2M	$593.0M	$508.4M	—
Operating income	$1.03B	$1.16B	$1.24B	$1.10B	$915.8M	$490.1M	$370.1M	$259.7M	−$6.3M	$305.1M	$288.0M	$286.2M	$275.5M	$245.7M	$214.1M	$149.3M	$134.5M	$164.4M
EBITDAderived	$1.23B	$1.36B	$1.43B	$1.29B	$1.13B	$709.1M	$581.9M	$515.3M	$233.8M	$367.1M	$335.1M	$325.6M	$309.9M	$275.5M	$246.1M	$185.1M	$161.5M	$191.9M
Net income	$729.2M	$1.25B	$882.5M	$807.8M	$793.6M	$266.7M	$233.3M	$122.5M	$3.3M	$193.6M	$175.6M	$183.8M	$182.8M	$165.9M	$136.9M	$96.3M	$83.0M	$103.9M
Basic EPSper diluted share	$9.68	$16.12	$11.17	$10.08	$9.33	$2.99	$2.60	$1.35	$0.04	$2.34	$2.09	$2.06	$1.97	$1.78	$1.43	$1.01	$0.88	$1.09
Diluted EPSper diluted share	$9.65	$16.00	$11.08	$9.96	$9.21	$2.96	$2.56	$1.33	$0.04	$2.31	$2.06	$2.03	$1.93	$1.73	$1.39	$0.96	$0.85	$1.05

Review source filings at SEC.gov ↗

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys9$10.05M disclosed value

Sells (SEC code S)105$109.00M disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
Feb 5, 2026Form 4	Rinello John JSVP, Global Business Sales	BuyCommon Stock · indirect	50	$154.13	$7.7K	50
Dec 10, 2025Form 4	PAGLIUCA STEPHEN GDirector	BuyCommon Stock	7.6K	$231.75	$1.75M	111.6K
Dec 10, 2025Form 4	PAGLIUCA STEPHEN GDirector	BuyCommon Stock	9.9K	$231.12	$2.28M	104.1K
Dec 10, 2025Form 4	PAGLIUCA STEPHEN GDirector	BuyCommon Stock	4.6K	$230.09	$1.06M	94.2K
Dec 10, 2025Form 4	PAGLIUCA STEPHEN GDirector	BuyCommon Stock	8.5K	$228.91	$1.94M	89.6K

Review ownership filings at SEC.gov ↗

GARTNER INC (IT)

Financial charts

Financial statements

Insider buys & sells