Gartner, Inc. : There is still some upside potential
September 21, 2021 at 02:37 am EDT
By Jordan Dufee
Share
BUY
Target price hit
Entry price
Target
Stop-loss
Potential
$314.06
$360.00
$285.00
+14.63%
The timing appears opportune to go long in shares of Gartner, Inc. as we anticipate another pick-up in the underlying trend.
Summary
● The company has strong fundamentals. More than 70% of companies have a lower mix of growth, profitability, debt and visibility.
● The company presents an interesting fundamental situation from a short-term investment perspective.
Strengths
● Analysts have consistently raised their revenue expectations for the company, which provides good prospects for the current and next years in terms of revenue growth.
● For the last twelve months, analysts have been gradually revising upwards their EPS forecast for the upcoming fiscal year.
● For several months, analysts have been revising their EPS estimates roughly upwards.
● The average price target of analysts who are interested in the stock has been strongly revised upwards over the last four months.
● Considering the small differences between the analysts' various estimates, the group's business visibility is good.
● Historically, the company has been releasing figures that are above expectations.
Weaknesses
● The company's valuation in terms of earnings multiples is rather high. Indeed, the firm is getting paid 38.74 times its estimated earnings per share for the ongoing year.
● With an enterprise value anticipated at 5.92 times the sales for the current fiscal year, the company turns out to be overvalued.
● In relation to the value of its tangible assets, the company's valuation appears relatively high.
Gartner, Inc. specializes in analysis and consulting services in IT and communication technologies. Net sales break down by activity as follows:
- research and analysis services (84.1%): conducting analyzes, market assessment, and publication of research to help clients gain market visibility and select suppliers of products or services best suited to their needs;
- consulting services (8.8%): consulting services in the selection and implementation of IT projects, digital marketing strategy, development and realization of information systems architectures, digital transformation projects, etc.;
- organization of congresses, conferences and exhibitions (7.1%).
At the end of 2022, the group had around 2,500 analysts and consultants around the world.
Net sales are distributed geographically as follows: the United States and Canada (66.1%), Europe/Middle East/Africa (22.5%) and other (11.4%).