GARTNER INC (IT) Stock Fundamental Analysis
NYSE:IT - New York Stock Exchange, Inc. - US3666511072 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to IT. IT was compared to 82 industry peers in the IT Services industry. While IT belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. While showing a medium growth rate, IT is valued expensive at the moment.
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.
Each year in the past 5 years IT has 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 96.34% of its industry peers.
IT's Return On Equity of 83.73% is amongst the best of the industry. IT outperforms 98.78% of its industry peers.
Looking at the Return On Invested Capital, with a value of 20.90%, IT belongs to the top of the industry, outperforming 92.68% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for IT is in line with the industry average of 22.63%.
| 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's Operating Margin of 18.51% is amongst the best of the industry. IT outperforms 92.68% of its industry peers.
IT's Operating Margin has improved in the last couple of years.
IT has a Gross Margin of 67.79%. This is amongst the best in the industry. IT outperforms 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so IT is creating value.
IT has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, IT has less shares outstanding
Compared to 1 year ago, IT has an improved debt to assets ratio.
2.2 Solvency
IT has an Altman-Z score of 5.25. This indicates that IT is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 5.25, IT is doing good in the industry, outperforming 78.05% of the companies in the same industry.
The Debt to FCF ratio of IT is 1.64, which is an excellent value as it means it would take IT, only 1.64 years of fcf income to pay off all of its debts.
IT has a better Debt to FCF ratio (1.64) than 70.73% 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.
The Debt to Equity ratio of IT (1.64) is worse than 74.39% of its industry peers.
Even though the debt/equity ratio score it not favorable for IT, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.64 | ||
| Debt/FCF | 1.64 | ||
| Altman-Z | 5.25 |
ROIC/WACC2.23
WACC9.38%
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 73.17% of its industry peers.
A Quick Ratio of 1.09 indicates that IT should not have too much problems paying its short term obligations.
IT has a worse Quick ratio (1.09) than 71.95% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.09 | ||
| Quick Ratio | 1.09 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 24.34% over the past year.
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.
Looking at the last year, IT shows a small growth in Revenue. The Revenue has grown by 5.99% in the last 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
The Earnings Per Share is expected to grow by 4.59% on average over the next years.
IT is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.97% yearly.
EPS Next Y-9.6%
EPS Next 2Y-0.39%
EPS Next 3Y4.59%
EPS Next 5YN/A
Revenue Next Year5.13%
Revenue Next 2Y5.96%
Revenue Next 3Y6.97%
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.
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
Based on the Price/Earnings ratio of 31.65, the valuation of IT can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of IT is on the same level as its industry peers.
IT's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 26.60.
IT is valuated quite expensively with a Price/Forward Earnings ratio of 32.02.
Compared to the rest of the industry, the Price/Forward Earnings ratio of IT is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of IT to the average of the S&P500 Index (22.43), we can say IT is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.65 | ||
| Fwd PE | 32.02 |
4.2 Price Multiples
IT's Enterprise Value to EBITDA ratio is in line with the industry average.
The rest of the industry has a similar Price/Free Cash Flow ratio as IT.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.93 | ||
| EV/EBITDA | 25.46 |
4.3 Compensation for Growth
The excellent profitability rating of IT may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.08
EPS Next 2Y-0.39%
EPS Next 3Y4.59%
5. Dividend
5.1 Amount
No dividends for IT!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
447.9
-1.62 (-0.36%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners94.38%
Inst Owner Change2.03%
Ins Owners1.83%
Ins Owner Change1.85%
Market Cap34.52B
Analysts76
Price Target504.61 (12.66%)
Short Float %2.3%
Short Ratio2.33
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)-10.35%
PT rev (3m)-9.97%
EPS NQ rev (1m)-0.19%
EPS NQ rev (3m)-0.3%
EPS NY rev (1m)1.68%
EPS NY rev (3m)-0.22%
Revenue NQ rev (1m)-0.4%
Revenue NQ rev (3m)-0.35%
Revenue NY rev (1m)-0.41%
Revenue NY rev (3m)-1.84%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.65 | ||
| Fwd PE | 32.02 | ||
| P/S | 5.45 | ||
| P/FCF | 22.93 | ||
| P/OCF | 21.44 | ||
| P/B | 23.04 | ||
| P/tB | N/A | ||
| EV/EBITDA | 25.46 |
EPS(TTM)14.15
EY3.16%
EPS(NY)13.99
Fwd EY3.12%
FCF(TTM)19.53
FCFY4.36%
OCF(TTM)20.89
OCFY4.66%
SpS82.13
BVpS19.44
TBVpS-23.71
PEG (NY)N/A
PEG (5Y)1.08
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 | 5.25 |
F-Score8
WACC9.38%
ROIC/WACC2.23
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-9.6%
EPS Next 2Y-0.39%
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 Year5.13%
Revenue Next 2Y5.96%
Revenue Next 3Y6.97%
Revenue Next 5YN/A
EBIT growth 1Y3.87%
EBIT growth 3Y8.21%
EBIT growth 5Y25.22%
EBIT Next Year18.79%
EBIT Next 3Y13.04%
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%