GARTNER INC (IT) Stock Fundamental Analysis
NYSE:IT - New York Stock Exchange, Inc. - US3666511072 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to IT. IT was compared to 82 industry peers in the IT Services industry. IT has an excellent profitability rating, but there are some minor concerns on its financial health. IT is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year IT was profitable.
IT had a positive operating cash flow in the past year.
Each year in the past 5 years IT has been profitable.
IT had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of IT (14.79%) is better than 96.34% of its industry peers.
The Return On Equity of IT (83.73%) is better than 97.56% of its industry peers.
IT has a Return On Invested Capital of 20.90%. This is amongst the best in the industry. IT outperforms 92.68% of its industry peers.
The Average Return On Invested Capital over the past 3 years for IT is above the industry average of 21.61%.
| 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 96.34% of its industry peers.
IT's Profit Margin has improved in the last couple of years.
IT has a better Operating Margin (18.51%) than 92.68% 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 85.37% of its industry peers.
In the last couple of years the Gross Margin of IT has remained more or less at the same level.
| 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
IT has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, IT has less shares outstanding
The number of shares outstanding for IT has been reduced compared to 5 years ago.
IT has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 4.63 indicates that IT is not in any danger for bankruptcy at the moment.
The Altman-Z score of IT (4.63) is better than 69.51% of its industry peers.
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 has a Debt to FCF ratio of 1.64. This is in the better half of the industry: IT outperforms 73.17% of its industry peers.
A Debt/Equity ratio of 1.64 is on the high side and indicates that IT has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.64, IT is doing worse than 79.27% of the companies in the same industry.
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 | 4.63 |
ROIC/WACC2.27
WACC9.21%
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.
The Current ratio of IT (1.09) is worse than 76.83% of its industry peers.
IT has a Quick 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 has a Quick ratio of 1.09. This is in the lower half of the industry: IT underperforms 75.61% of its industry peers.
| 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.
Measured over the past years, IT shows a very strong growth in Earnings Per Share. The EPS has been growing by 29.24% on average per year.
The Revenue has been growing slightly by 5.99% in the past year.
IT shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.10% yearly.
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 4.55% on average per year.
The Revenue is expected to grow by 7.02% on average over the next years.
EPS Next Y-8.91%
EPS Next 2Y-0.32%
EPS Next 3Y4.55%
EPS Next 5YN/A
Revenue Next Year5.3%
Revenue Next 2Y5.95%
Revenue Next 3Y7.02%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 25.20 indicates a quite expensive valuation of IT.
Compared to the rest of the industry, the Price/Earnings ratio of IT is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 28.04, IT is valued at the same level.
A Price/Forward Earnings ratio of 25.46 indicates a quite expensive valuation of 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 (37.64), we can say IT is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.2 | ||
| Fwd PE | 25.46 |
4.2 Price Multiples
IT's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, IT is valued a bit cheaper than 73.17% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.24 | ||
| EV/EBITDA | 20.23 |
4.3 Compensation for Growth
IT has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.86
EPS Next 2Y-0.32%
EPS Next 3Y4.55%
5. Dividend
5.1 Amount
IT does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
356.64
+0.5 (+0.14%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners96.1%
Inst Owner Change-0.73%
Ins Owners1.81%
Ins Owner Change2.12%
Market Cap27.45B
Analysts76
Price Target490.44 (37.52%)
Short Float %4%
Short Ratio4.04
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)-0.41%
PT rev (3m)-2.83%
EPS NQ rev (1m)0.05%
EPS NQ rev (3m)-0.77%
EPS NY rev (1m)0.29%
EPS NY rev (3m)2.45%
Revenue NQ rev (1m)0.06%
Revenue NQ rev (3m)-0.35%
Revenue NY rev (1m)0.15%
Revenue NY rev (3m)0.34%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.2 | ||
| Fwd PE | 25.46 | ||
| P/S | 4.34 | ||
| P/FCF | 18.24 | ||
| P/OCF | 17.05 | ||
| P/B | 18.33 | ||
| P/tB | N/A | ||
| EV/EBITDA | 20.23 |
EPS(TTM)14.15
EY3.97%
EPS(NY)14.01
Fwd EY3.93%
FCF(TTM)19.55
FCFY5.48%
OCF(TTM)20.91
OCFY5.86%
SpS82.22
BVpS19.46
TBVpS-23.74
PEG (NY)N/A
PEG (5Y)0.86
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 | 4.63 |
F-Score8
WACC9.21%
ROIC/WACC2.27
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-8.91%
EPS Next 2Y-0.32%
EPS Next 3Y4.55%
EPS Next 5YN/A
Revenue 1Y (TTM)5.99%
Revenue growth 3Y9.8%
Revenue growth 5Y8.1%
Sales Q2Q%4.16%
Revenue Next Year5.3%
Revenue Next 2Y5.95%
Revenue Next 3Y7.02%
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%