Baird has revised its price target for Gartner (IT, Financial), reducing it from $557 to $540. Despite this adjustment, the firm continues to rate Gartner shares as Outperform. This update comes in the wake of Gartner's first-quarter results, which demonstrated effective expense management along with favorable margins guidance. The company's financial performance has influenced Baird's decision to fine-tune its model while maintaining a positive outlook on the stock.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 10 analysts, the average target price for Gartner Inc (IT, Financial) is $475.12 with a high estimate of $557.00 and a low estimate of $400.00. The average target implies an upside of 9.75% from the current price of $432.92. More detailed estimate data can be found on the Gartner Inc (IT) Forecast page.
Based on the consensus recommendation from 12 brokerage firms, Gartner Inc's (IT, Financial) average brokerage recommendation is currently 2.5, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Gartner Inc (IT, Financial) in one year is $460.33, suggesting a upside of 6.33% from the current price of $432.92. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Gartner Inc (IT) Summary page.
IT Key Business Developments
Release Date: May 06, 2025
- Revenue: $1.5 billion, up 4% year over year as reported and 6% FX neutral.
- EBITDA: $385 million, up 1% as reported and 3% FX neutral.
- Adjusted EPS: $2.98, up 2% from Q1 of last year.
- Free Cash Flow: $288 million, up 73% compared with Q1 in 2024.
- Contract Value (CV): $5.1 billion, up 7% year over year.
- Research Revenue: Grew 4% year over year as reported and 6% FX neutral.
- Subscription Revenue: Grew 8% FX neutral.
- Consulting Revenue: $140 million, up 4% as reported and 5% FX neutral.
- Conference Revenue: $73 million, up 4% as reported and 5% FX neutral.
- Stock Repurchase: $163 million of stock repurchased in the quarter.
- Cash Balance: $2.1 billion at the end of the first quarter.
- Debt Balance: $2.5 billion at the end of the first quarter.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Gartner Inc (IT, Financial) reported first-quarter financial results that exceeded expectations, with revenue, EBITDA, EPS, and free cash flow all performing better than anticipated.
- Contract value grew by 7% year-over-year, with research contract value increasing by 7% and Global Business Sales (GBS) contract value rising by 11%.
- The company demonstrated strong performance in its conferences segment, with revenue growing 12% on a same-conference basis.
- Consulting revenue increased by 5%, and the consulting backlog grew by 16%, indicating strong demand for Gartner's consulting services.
- Gartner Inc (IT) continues to generate free cash flow well in excess of net income, supporting its share repurchase program and returning capital to shareholders.
Negative Points
- The US federal government segment, representing approximately 4% of total contract value, faced challenges due to recent policy changes, impacting renewal rates.
- Gartner Inc (IT) experienced a slowdown in decision-making cycles among clients affected by tariffs and other macroeconomic factors, leading to extended sales cycles.
- The company revised its research revenue outlook downward by $135 million, reflecting challenges in federal contract renewals and broader macroeconomic uncertainties.
- Global Technology Sales (GTS) new business was down 4% compared to the previous year, indicating challenges in acquiring new clients.
- The selling environment became more volatile, with decision-making slowing for companies directly impacted by policy changes, affecting overall growth momentum.
