GARTNER INC (IT) Stock Fundamental Analysis
NYSE:IT - New York Stock Exchange, Inc. - US3666511072 - Common Stock - Currency: USD
IT gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 81 industry peers in the IT Services industry. While IT has a great profitability rating, there are some minor concerns on its financial health. IT is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
IT had positive earnings in the past year.
IT had a positive operating cash flow in the past year.
In the past 5 years IT has always been profitable.
In the past 5 years IT always reported a positive cash flow from operatings.
1.2 Ratios
IT's Return On Assets of 14.79% is amongst the best of the industry. IT outperforms 96.30% of its industry peers.
The Return On Equity of IT (83.73%) is better than 97.53% of its industry peers.
IT has a Return On Invested Capital of 20.90%. This is amongst the best in the industry. IT outperforms 92.59% of its industry peers.
IT had an Average Return On Invested Capital over the past 3 years of 23.67%. This is in line with the industry average of 21.85%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.79% | ||
| ROE | 83.73% | ||
| ROIC | 20.9% |
ROA(3y)12.34%
ROA(5y)10.27%
ROE(3y)192.17%
ROE(5y)162.96%
ROIC(3y)23.67%
ROIC(5y)19.92%
1.3 Margins
IT has a better Profit Margin (19.82%) than 96.30% of its industry peers.
IT's Profit Margin has improved in the last couple of years.
IT's Operating Margin of 18.51% is amongst the best of the industry. IT outperforms 92.59% of its industry peers.
IT's Operating Margin has improved in the last couple of years.
IT has a better Gross Margin (67.79%) than 85.19% of its industry peers.
IT's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.51% | ||
| PM (TTM) | 19.82% | ||
| GM | 67.79% |
OM growth 3Y-1.45%
OM growth 5Y15.83%
PM growth 3Y6.07%
PM growth 5Y29.49%
GM growth 3Y-0.86%
GM growth 5Y1.3%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), IT is creating value.
IT has less shares outstanding than it did 1 year ago.
IT has less shares outstanding than it did 5 years ago.
IT has a better debt/assets ratio than last year.
2.2 Solvency
IT has an Altman-Z score of 4.89. This indicates that IT is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.89, IT is in the better half of the industry, outperforming 69.14% of the companies in the same industry.
IT has a debt to FCF ratio of 1.64. This is a very positive value and a sign of high solvency as it would only need 1.64 years to pay back of all of its debts.
IT's Debt to FCF ratio of 1.64 is fine compared to the rest of the industry. IT outperforms 72.84% of its industry peers.
IT has a Debt/Equity ratio of 1.64. This is a high value indicating a heavy dependency on external financing.
IT has a worse Debt to Equity ratio (1.64) than 77.78% of its industry peers.
Although IT does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.64 | ||
| Debt/FCF | 1.64 | ||
| Altman-Z | 4.89 |
ROIC/WACC2.29
WACC9.12%
2.3 Liquidity
IT has a Current Ratio of 1.09. This is a normal value and indicates that IT is financially healthy and should not expect problems in meeting its short term obligations.
IT's Current ratio of 1.09 is on the low side compared to the rest of the industry. IT is outperformed by 75.31% of its industry peers.
A Quick Ratio of 1.09 indicates that IT should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.09, IT is doing worse than 74.07% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.09 | ||
| Quick Ratio | 1.09 |
3. Growth
3.1 Past
IT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 24.34%, which is quite impressive.
IT shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 29.24% yearly.
Looking at the last year, IT shows a small growth in Revenue. The Revenue has grown by 5.99% in the last year.
Measured over the past years, IT shows a quite strong growth in Revenue. The Revenue has been growing by 8.10% on average per year.
EPS 1Y (TTM)24.34%
EPS 3Y15.05%
EPS 5Y29.24%
EPS Q2Q%1.71%
Revenue 1Y (TTM)5.99%
Revenue growth 3Y9.8%
Revenue growth 5Y8.1%
Sales Q2Q%4.16%
3.2 Future
Based on estimates for the next years, IT will show a small growth in Earnings Per Share. The EPS will grow by 4.59% on average per year.
Based on estimates for the next years, IT will show a small growth in Revenue. The Revenue will grow by 7.01% on average per year.
EPS Next Y-9.17%
EPS Next 2Y-0.32%
EPS Next 3Y4.59%
EPS Next 5YN/A
Revenue Next Year5.15%
Revenue Next 2Y5.93%
Revenue Next 3Y7.01%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 28.29, IT can be considered very expensive at the moment.
The rest of the industry has a similar Price/Earnings ratio as IT.
IT's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.28.
The Price/Forward Earnings ratio is 28.57, which means the current valuation is very expensive for IT.
The rest of the industry has a similar Price/Forward Earnings ratio as IT.
When comparing the Price/Forward Earnings ratio of IT to the average of the S&P500 Index (21.76), we can say IT is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.29 | ||
| Fwd PE | 28.57 |
4.2 Price Multiples
IT's Enterprise Value to EBITDA is on the same level as the industry average.
67.90% of the companies in the same industry are more expensive than IT, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.47 | ||
| EV/EBITDA | 22.4 |
4.3 Compensation for Growth
The excellent profitability rating of IT may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.97
EPS Next 2Y-0.32%
EPS Next 3Y4.59%
5. Dividend
5.1 Amount
No dividends for IT!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
400.28
+4.84 (+1.22%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners96.1%
Inst Owner Change2.15%
Ins Owners1.81%
Ins Owner Change2.11%
Market Cap30.81B
Analysts76
Price Target492.48 (23.03%)
Short Float %3.54%
Short Ratio3.82
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)34.62%
Min EPS beat(2)6.5%
Max EPS beat(2)62.75%
EPS beat(4)4
Avg EPS beat(4)18.59%
Min EPS beat(4)1.75%
Max EPS beat(4)62.75%
EPS beat(8)8
Avg EPS beat(8)16.08%
EPS beat(12)12
Avg EPS beat(12)22.2%
EPS beat(16)16
Avg EPS beat(16)23.03%
Revenue beat(2)0
Avg Revenue beat(2)-2.23%
Min Revenue beat(2)-2.97%
Max Revenue beat(2)-1.49%
Revenue beat(4)0
Avg Revenue beat(4)-2.25%
Min Revenue beat(4)-2.97%
Max Revenue beat(4)-1.49%
Revenue beat(8)0
Avg Revenue beat(8)-2.2%
Revenue beat(12)2
Avg Revenue beat(12)-1.51%
Revenue beat(16)4
Avg Revenue beat(16)-1.09%
PT rev (1m)-2.41%
PT rev (3m)-15.27%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.92%
EPS NY rev (1m)0.47%
EPS NY rev (3m)0.25%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.35%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)-0.54%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.29 | ||
| Fwd PE | 28.57 | ||
| P/S | 4.87 | ||
| P/FCF | 20.47 | ||
| P/OCF | 19.14 | ||
| P/B | 20.57 | ||
| P/tB | N/A | ||
| EV/EBITDA | 22.4 |
EPS(TTM)14.15
EY3.54%
EPS(NY)14.01
Fwd EY3.5%
FCF(TTM)19.55
FCFY4.88%
OCF(TTM)20.91
OCFY5.22%
SpS82.22
BVpS19.46
TBVpS-23.74
PEG (NY)N/A
PEG (5Y)0.97
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.79% | ||
| ROE | 83.73% | ||
| ROCE | 24.98% | ||
| ROIC | 20.9% | ||
| ROICexc | 37.72% | ||
| ROICexgc | N/A | ||
| OM | 18.51% | ||
| PM (TTM) | 19.82% | ||
| GM | 67.79% | ||
| FCFM | 23.78% |
ROA(3y)12.34%
ROA(5y)10.27%
ROE(3y)192.17%
ROE(5y)162.96%
ROIC(3y)23.67%
ROIC(5y)19.92%
ROICexc(3y)34.69%
ROICexc(5y)27.78%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)28.3%
ROCE(5y)23.82%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y16.45%
ROICexc growth 5Y36.24%
OM growth 3Y-1.45%
OM growth 5Y15.83%
PM growth 3Y6.07%
PM growth 5Y29.49%
GM growth 3Y-0.86%
GM growth 5Y1.3%
F-Score8
Asset Turnover0.75
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.64 | ||
| Debt/FCF | 1.64 | ||
| Debt/EBITDA | 1.79 | ||
| Cap/Depr | 51.36% | ||
| Cap/Sales | 1.65% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 117.06% | ||
| Profit Quality | 120% | ||
| Current Ratio | 1.09 | ||
| Quick Ratio | 1.09 | ||
| Altman-Z | 4.89 |
F-Score8
WACC9.12%
ROIC/WACC2.29
Cap/Depr(3y)53.53%
Cap/Depr(5y)45.41%
Cap/Sales(3y)1.78%
Cap/Sales(5y)1.73%
Profit Quality(3y)117.52%
Profit Quality(5y)163.53%
High Growth Momentum
Growth
EPS 1Y (TTM)24.34%
EPS 3Y15.05%
EPS 5Y29.24%
EPS Q2Q%1.71%
EPS Next Y-9.17%
EPS Next 2Y-0.32%
EPS Next 3Y4.59%
EPS Next 5YN/A
Revenue 1Y (TTM)5.99%
Revenue growth 3Y9.8%
Revenue growth 5Y8.1%
Sales Q2Q%4.16%
Revenue Next Year5.15%
Revenue Next 2Y5.93%
Revenue Next 3Y7.01%
Revenue Next 5YN/A
EBIT growth 1Y3.87%
EBIT growth 3Y8.21%
EBIT growth 5Y25.22%
EBIT Next Year20.27%
EBIT Next 3Y12.56%
EBIT Next 5YN/A
FCF growth 1Y52.56%
FCF growth 3Y3.36%
FCF growth 5Y27.14%
OCF growth 1Y46.55%
OCF growth 3Y4.2%
OCF growth 5Y21.3%