Value
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.1 |
| P/S | 8.8 |
| EV/EBITDA | 4.7 |
| Fwd P/E | 8.2 |
| PEG | 7.6 |
| Analyst target | 3.0 |
- ▸Forward P/E: 14.4x
- ▸PEG: 0.91
IT · Why this verdict
Why Gartner (IT) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score5.8/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Gartner is a high-quality research and advisory business (ROE 114%, 136% FCF/NI, four straight earnings beats), but the price is far above the analyst target, revenue is slightly declining and earnings land in 2 days.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Revenue is declining slightly, down 1%, with the growth component scoring only 2.3/10 even though earnings growth scores 8.6/10. Growth breakdown | Quarterly revenue returns to growth above the $1.49B next-quarter estimate. | →Stable |
| CounterEarnings growth is outpacing revenue, but profit growth without revenue growth often relies on buybacks and cost cuts that can run out. | ||
Revenue is concentrated in subscription-based insights products (78.0% of the total), alongside short interest of 15%. Bear case | Subscription renewal rates hold so that the 78% subscription share stays stable or grows. | ↓Deteriorating |
| CounterA shift in client budgets or competition from AI-driven research tools could pressure renewals in a product line this concentrated. | ||
Returns and cash generation are excellent, with ROE of 114% and cash conversion of 136% FCF/NI. Quality breakdown | ROE stays above 60% and free cash flow stays above net income over 12 months. | →Stable |
| CounterVery high ROE can be inflated by a small equity base after buybacks, and the Rule of 40 score is only 16 (fail). | ||
Gartner has beaten estimates in all 4 of the last 4 quarters with an average surprise of 14.2%. Earnings track record | Beats continue in at least 3 of the next 4 quarters. | →Stable |
| CounterEarnings are due in 2 days and implied volatility is high at 116%, so a high bar after a perfect streak can still produce a sharp drop. | ||
The price of $228.79 is above the $168.58 analyst target, with upside of -26.3% against 15.0% downside. Warnings | Analysts raise targets toward the current price or the stock retreats toward the $220.05 entry level. | ↓Deteriorating |
| CounterThe stock still shows a reasonable forward P/E of 14.0x and PEG of 0.91, so analysts may simply be lagging earnings strength. | ||
Revenue is declining slightly, down 1%, with the growth component scoring only 2.3/10 even though earnings growth scores 8.6/10.
→StableGrowth breakdown
- Expectation
- Quarterly revenue returns to growth above the $1.49B next-quarter estimate.
CounterEarnings growth is outpacing revenue, but profit growth without revenue growth often relies on buybacks and cost cuts that can run out.
Revenue is concentrated in subscription-based insights products (78.0% of the total), alongside short interest of 15%.
↓DeterioratingBear case
- Expectation
- Subscription renewal rates hold so that the 78% subscription share stays stable or grows.
CounterA shift in client budgets or competition from AI-driven research tools could pressure renewals in a product line this concentrated.
Returns and cash generation are excellent, with ROE of 114% and cash conversion of 136% FCF/NI.
→StableQuality breakdown
- Expectation
- ROE stays above 60% and free cash flow stays above net income over 12 months.
CounterVery high ROE can be inflated by a small equity base after buybacks, and the Rule of 40 score is only 16 (fail).
Gartner has beaten estimates in all 4 of the last 4 quarters with an average surprise of 14.2%.
→StableEarnings track record
- Expectation
- Beats continue in at least 3 of the next 4 quarters.
CounterEarnings are due in 2 days and implied volatility is high at 116%, so a high bar after a perfect streak can still produce a sharp drop.
The price of $228.79 is above the $168.58 analyst target, with upside of -26.3% against 15.0% downside.
↓DeterioratingWarnings
- Expectation
- Analysts raise targets toward the current price or the stock retreats toward the $220.05 entry level.
CounterThe stock still shows a reasonable forward P/E of 14.0x and PEG of 0.91, so analysts may simply be lagging earnings strength.
Per-dimension breakdown
Quality
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 6.8 |
| Gross margin | 9.9 |
| Op margin | 9.0 |
| Net margin | 6.0 |
| Current ratio | 3.5 |
| FCF quality | 9.5 |
| Moat | 6.2 |
| Rule of 40 | 3.0 |
| Piotroski F | 6.7 |
- ▸Excellent ROE: 114%
- ▸Excellent cash conversion: 136% FCF/NI
- ▸Rule of 40: 16 (fail)
Growth
5.4/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.3 |
| EPS growth | 8.6 |
- ▸Declining revenue: -1%
Momentum
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.0 |
| OBV | 6.5 |
| MA position | 5.0 |
| Volume | 10.0 |
| vol acceleration | 2.1 |
- ▸Above 200-MA but MA slope flat
- ▸Volume surge (2.9x avg) on selloff
Sentiment
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.9 |
| Analyst rating | 5.0 |
| Price target | 4.2 |
Insider
6.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 6.9 |
| notable moves | 7.0 |
- ▸Insider selling (low materiality) — $1,371,008 (0.009% of mkt cap)
Peer rank
4.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.5 |
| quality rank | 8.6 |
| growth rank | 2.1 |
- ▸Superior ROE vs peers
Technical
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 6.3 |
| support resistance | 6.3 |
| 52w position | 5.4 |
| gap | 7.5 |
- ▸Extreme gap down (-11.6%) - potential reversal
Risk (lower is worse)
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 2.6 |
| days to cover | 3.2 |
| volatility | 0.0 |
| put call | 10.0 |
| implied vol | 4.0 |
| max pain risk | 3.0 |
| beta | 7.5 |
- ▸Above max pain $120
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 9.6 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
- ▸Earnings today
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- MOMENTUM:4.9>=4.5
- INSIDER:OK
- 8K:CLEAN
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-1.5=NEGATIVE
- EARNINGS_PROXIMITY:0d<=7d
Warning (1)
- MOMENTUM:4.9<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
-1.47
Upside
-17.5%
Downside
11.9%
Sizing output
AVOID
SetupRange Bound — RSI 54 mid-range, Bollinger mid-band
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.2 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Catalyst at 7.5) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-1.5=NEGATIVE, EARNINGS_PROXIMITY:0d<=7d) reinforce the read. Current asymmetry R:R is -1.47 — supplementary context, not the trigger for this path.
The strongest dimensions are Catalyst at 7.5, Quality at 7.1, and Value at 6.4; the weakest are Risk (lower is worse) at 4.3, Peer rank at 4.8, and Momentum at 4.9. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of -1.47 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Exceptional Returns Cash Conversion
Trip ifReturn on equity falls below 50% from current 114%.
- P2Perfect Beat Streak
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P3Price Far Above Analyst Target
Trip ifPrice falls more than 15% from the current $228.79.
- P4Slowing Revenue Growth
Trip ifRevenue growth stays below -5% YoY for 2 consecutive quarters.
- P5Subscription Product Concentration
Trip ifSubscription share of revenue falls below 70% from current 78%.