Value
8.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 8.3 |
| P/S | 9.4 |
| EV/EBITDA | 7.0 |
| Fwd P/E | 9.4 |
| PEG | 9.8 |
| Analyst target | 6.0 |
- ▸Forward P/E: 8.9x
- ▸PEG: 0.54
- ▸Attractively valued
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.
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VerdictSELL
Overall score5.3/10
ConfidenceHIGH
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Revenue is declining at 2% year-over-year and the combined growth-plus-margin score of 15 falls well short of the Rule of 40 threshold, indicating the business is not growing quickly enough to justify its cost structure — a concern that is particularly acute for a business expected to compound on the strength of its subscription base. Growth breakdown | Revenue growth turns positive and sustains above 3% year-over-year for two consecutive quarters. | →Stable |
| CounterA subscription-heavy model where 78% of revenue is recurring creates durable baseline revenue even during a down cycle; the current decline may reflect temporary churn or a pricing transition rather than structural demand deterioration, and the subscription base limits the depth of any revenue drawdown. | ||
With 78% of revenue concentrated in subscription-based products, any acceleration in customer churn or a material contract-renewal shortfall would create a significant revenue cliff — a risk that compounds when the overall top-line trend is already negative. Bear case | Subscription revenue retention rates hold steady with no material contract cancellation disclosures for four consecutive quarters. | →Stable |
| CounterA 78% subscription base also means 78% of revenue is contractually visible and predictable; that same concentration which creates cliff risk also creates revenue floor stability, and in a softer demand environment that visibility may be more valuable than near-term growth optionality. | ||
At a forward price-to-earnings multiple of 9.3x and a PEG ratio of 0.58, the stock screens cheaply relative to its earnings trajectory, while free cash flow conversion of 144% of net income confirms that the earnings are backed by real cash — a combination that provides a margin of safety if the business stabilizes. Valuation breakdown | Forward P/E remains below 15x while free cash flow conversion stays above 100% for four consecutive quarters. | →Stable |
| CounterThe return on equity of 95% is inflated by a buyback-shrunk equity base rather than genuine capital compounding, and revenue is declining at 2% — if investors begin pricing in a structural revenue contraction, multiples can compress further even from an already-low starting point. | ||
The stock is in a falling-knife technical setup — below all moving averages, with a confirmed death cross, an RSI of 37, bearish MACD, and falling volume accumulation — meaning multiple momentum dimensions simultaneously signal a declining trend rather than a temporary dislocation. Engine gate (failed) | Momentum gate clears above the 4.5 threshold and price crosses above the 200-day moving average within 12 months. | →Stable |
| CounterA short interest of 25% — noted as a potential short-squeeze setup alongside above-average quality scores — means a single positive earnings catalyst could trigger rapid covering and reverse the technical setup more quickly than the breadth of the downtrend suggests. | ||
Revenue is declining at 2% year-over-year and the combined growth-plus-margin score of 15 falls well short of the Rule of 40 threshold, indicating the business is not growing quickly enough to justify its cost structure — a concern that is particularly acute for a business expected to compound on the strength of its subscription base.
→StableGrowth breakdown
- Expectation
- Revenue growth turns positive and sustains above 3% year-over-year for two consecutive quarters.
CounterA subscription-heavy model where 78% of revenue is recurring creates durable baseline revenue even during a down cycle; the current decline may reflect temporary churn or a pricing transition rather than structural demand deterioration, and the subscription base limits the depth of any revenue drawdown.
With 78% of revenue concentrated in subscription-based products, any acceleration in customer churn or a material contract-renewal shortfall would create a significant revenue cliff — a risk that compounds when the overall top-line trend is already negative.
→StableBear case
- Expectation
- Subscription revenue retention rates hold steady with no material contract cancellation disclosures for four consecutive quarters.
CounterA 78% subscription base also means 78% of revenue is contractually visible and predictable; that same concentration which creates cliff risk also creates revenue floor stability, and in a softer demand environment that visibility may be more valuable than near-term growth optionality.
At a forward price-to-earnings multiple of 9.3x and a PEG ratio of 0.58, the stock screens cheaply relative to its earnings trajectory, while free cash flow conversion of 144% of net income confirms that the earnings are backed by real cash — a combination that provides a margin of safety if the business stabilizes.
→StableValuation breakdown
- Expectation
- Forward P/E remains below 15x while free cash flow conversion stays above 100% for four consecutive quarters.
CounterThe return on equity of 95% is inflated by a buyback-shrunk equity base rather than genuine capital compounding, and revenue is declining at 2% — if investors begin pricing in a structural revenue contraction, multiples can compress further even from an already-low starting point.
The stock is in a falling-knife technical setup — below all moving averages, with a confirmed death cross, an RSI of 37, bearish MACD, and falling volume accumulation — meaning multiple momentum dimensions simultaneously signal a declining trend rather than a temporary dislocation.
→StableEngine gate (failed)
- Expectation
- Momentum gate clears above the 4.5 threshold and price crosses above the 200-day moving average within 12 months.
CounterA short interest of 25% — noted as a potential short-squeeze setup alongside above-average quality scores — means a single positive earnings catalyst could trigger rapid covering and reverse the technical setup more quickly than the breadth of the downtrend suggests.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Gartner screens compellingly cheap on a forward price-to-earnings multiple of 9.3x with a PEG of 0.58 and converts cash at 144% of net income, but revenue is declining and the Rule of 40 stands at only 15 — and the stock is in a full falling-knife setup with a death cross, price below all moving averages, and a failed momentum gate — leaving the valuation case dependent on a trend reversal that has not yet begun.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 6.3 |
| Gross margin | 9.8 |
| Op margin | 8.2 |
| Net margin | 5.7 |
| Current ratio | 3.8 |
| FCF quality | 9.8 |
| Moat | 5.8 |
| Rule of 40 | 3.0 |
| Piotroski F | 6.7 |
- ▸Excellent ROE: 95%
- ▸Excellent cash conversion: 144% FCF/NI
- ▸Rule of 40: 15 (fail)
Growth
3.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.1 |
| EPS growth | 5.5 |
- ▸Declining revenue: -2%
Momentum
2.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 3.1 |
| OBV | 4.0 |
| MA position | 1.0 |
| Volume | 1.1 |
- ▸Below 200-MA, MA slope -6.9%/30d — confirmed downtrend
Sentiment
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 7.8 |
| erm sentiment | 4.6 |
- ▸Analyst upside: 21%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
3.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.9 |
| quality rank | 8.2 |
| growth rank | 1.1 |
- ▸Superior ROE vs peers
Technical
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 5.9 |
| support resistance | 7.4 |
| 52w position | 0.0 |
| gap | 5.0 |
Risk (lower is worse)
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 10.0 |
| days to cover | 2.8 |
| volatility | 0.2 |
| put call | 4.1 |
| implied vol | 2.6 |
| beta | 7.4 |
| debt equity | 0.0 |
- ▸Short squeeze setup: 26% short, quality 7.5
- ▸High IV: 65%
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 8.3 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:32d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:2.5<4.5
- ASYMMETRY:0.5<1.5@spot
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
0.54
Upside
+5.3%
Downside
9.8%
Sizing output
AVOID
SetupFalling Knife — Death cross, below all MAs, RSI 38, MACD bearish
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -69% (>40% off 52w high)
Investment implication
The F-path SELL output reflects an overall score of 3.8 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 8.3) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:2.5<4.5, ASYMMETRY:0.5<1.5@spot, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is 0.54 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 8.3, Catalyst at 7.1, and Quality at 6.9; the weakest are Momentum at 2.5, Peer rank at 3.5, and Growth at 3.8. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of 0.54 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Attractive Valuation Strong Cash Conversion
Trip ifFree cash flow conversion falls below 80% of net income for 2 consecutive quarters.
- P2Falling Knife Death Cross Setup
Trip ifPrice crosses above the 200-day moving average and holds above it for at least 15 consecutive trading sessions.
- P3Declining Revenue Rule Of 40 Failure
Trip ifRevenue growth turns positive and exceeds 3% YoY for 2 consecutive quarters.
- P4Subscription Concentration Revenue Cliff
Trip ifAnnual recurring revenue growth turns positive above 5% YoY for 2 consecutive quarters.