Gartner Inc (IT) stock analysis

P/E below its 5-year median

Gartner's P/E of 17.3 is below its own 5-year median of 31.0.

P/E below the industry

Gartner's P/E of 17.3 is below the Management and Public Relations Services median of 21.9.

EV/EBITDA below its 5-year median

Gartner's EV/EBITDA of 10.5 is below its 5-year median of 23.1.

P/S above the industry

Gartner's price-to-sales of 1.89 is above the Management and Public Relations Services median of 0.97 (book value is negative, so we use sales).

Trading below fair value

The share price of $193.00 is below our fair value estimate of $302.66.

Margin of safety over 20%

The price is 36.2% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 5.9% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -1.0% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -38.7% over the last twelve months, against a 5-year average of 22.3% a year.

Growing slower than the industry

Revenue grew 0.7% over the last twelve months; the Management and Public Relations Services median is 7.2%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin improving

Gross margin was 70.1% over the last twelve months, against 68.3% a year earlier.

Return on equity over 15%

Return on equity was 114% over the last twelve months and averaged 156% over five years.

Return on capital over 10%

Return on invested capital was 53.8%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Gartner's return on equity of 114% is above the Management and Public Relations Services median of 0.4%.

Earnings grew over 5 years

Net income grew 22.3% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 12.0% over the last twelve months, against a 5-year average of 15.5%.

Net margin above the industry

Gartner's net margin of 12.0% is above the Management and Public Relations Services median of 0.2%.

Debt level

Needs debt and equity figures.

Debt trend

Needs a balance sheet from five years ago with positive equity.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 46.4% of total debt.

Interest well covered

Operating income covers interest expense 7.8 times.

Short-term assets don't cover short-term debts

Current assets are 0.88 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 3.74; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

Gartner has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.