ITNYSEThe short version
Gartner, Inc.
Gartner is the world's largest technology-research subscription business, selling recurring advice, analyst access, and conferences to roughly 13,000 enterprises; its stock has fallen about 75% from its 2024 peak as contract-value growth stalled to 1%.
The shares compounded from about $180 in early 2021 to a $552 peak in November 2024, then gave back roughly three-quarters of their value to about $140 as contract-value growth stalled.
$140
Share price
$10.6B
Market cap
$6.5B
FY2025 revenue
−75%
From 2024 peak
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The statements
Revenue compounded to $6.5B, but 2025 GAAP earnings halved even as cash held above $1.1B
FY2020 → FY2025as reported · $
Revenue$6.5B+4%
Gross margin68.8%+0.5pp
Operating margin15.8%−2.7pp
Net income$729M−42%
EPS$9.65−40%
Open the full statements →As-reported income statement, FY2020–FY2025.
- Steady top line. Revenue grew from $4.1B in 2020 to $6.5B in 2025, a mid-single-digit compounding subscription business with gross margins near 69%.
- The earnings swing. GAAP operating margin slid to 15.8% and net income fell from $1.25B (2024) to $729M (2025) — largely a 2024 tax benefit unwinding, not an operating collapse; adjusted EPS was $13.17.
- Cash is the anchor. Operating cash flow was $1.29B and free cash flow $1.18B in 2025 — cash generation comfortably exceeds reported net income.
Key finding
The 2025 stall shows up in two independent places — a federal cliff and a cash-flow swing
FY2025 Insights contract-value change ($M)
The commercial book still grew about $185M (~+4%); a ~$144M US-federal cliff held the total to +$41M (+1%).
- The stall, in two places. Gartner's FY2025 stall shows up in two independent places: US federal Insights contract value fell from about $270 million to about $126 million, a roughly $144 million drag that held total contract-value growth to 1%, while the change in deferred revenue flipped from a $181 million source of cash to a $42 million use.
- Cyclical if it anniversaries out. Strip the federal piece and the commercial book grew ~4% — so if the drag rolls off in 2026 as management expects, the headline reaccelerates mechanically.
- Not yet visible. The counter: total Insights CV still grew just 1.0% in Q1 2026 and the technology-sales channel 0.4% — the recovery is asserted, not yet in the numbers.
The derating
A once-loved compounder now trades at a quarter of its peak multiple on roughly flat earnings
Forward P/E multiple
Adjusted earnings barely moved across the span; the derating is almost entirely the multiple.
- Price, not earnings. The shares fell from a $551.80 peak (Nov 2024) to about $140 while adjusted EPS held near $13–14 — the 75% drawdown is a re-rating, not an earnings collapse.
- Two ratings. The 39x peak was a growth-stock rating on a low-double-digit compounder; 10x is what the market now pays for a business it expects to stop growing.
- A fallen star. Once priced for durable compounding, Gartner is now priced closer to a franchise in slow decline — which is where the report's central question lives.
Forward estimates
Consensus sees revenue dipping about 1% in 2026, then mid-single-digit growth returning in 2027
Consensus revenue and adjusted EPS
| Year | Revenue | Adj EPS |
|---|---|---|
| FY2025 actual | $6.50B | $13.17 |
| FY2026E | $6.43B | $13.68 |
| FY2027E | $6.71B | $15.30 |
Consensus of 14–15 analysts; 2026E adjusted EPS ranges $13.07–$14.20.
- A flat year, then recovery. The Street models 2026 revenue about 1% lower before a return to ~4% growth in 2027 — the cyclical read priced into estimates.
- EPS still climbing. Adjusted EPS is expected to rise every year — $13.17 (2025) to $13.68 (2026E) to $15.30 (2027E) — helped by heavy buybacks shrinking the share count.
- Valuation. On 2026E adjusted EPS the stock trades near 10x forward earnings and about 7x EV/EBITDA, a ~12% free-cash-flow yield.
The moat
The economic moat lives in the Insights subscription, at a 77% contribution margin
Gross contribution margin by segment (FY2025)
Insights carried a 77% contribution margin, unchanged from 2024 — the marginal cost of one more subscriber is near zero.
- Reuse is the moat. One research library distributed across 13,000+ client enterprises and 510,000+ interactions a year, with ~3–4% price increases taken annually for more than fifteen.
- Re-earned yearly. Contracts are annual and client retention is ~85%, so roughly one in seven logos turns over each year — the moat is behavioral, not contractual.
- The self-disclosed risk. Gartner's own 10-K cites “limited barriers to entry” and warns that loading its content into large language models “could reduce the value of our offerings.”
The tailwind
Management sizes the market near $200B and holds roughly 2% of it
Addressable market management sizes near $200B
GTS — technology leaders$55B28%
GBS — other functions$145B72%
Management estimate, unaudited. Gartner holds roughly $4B of contract value — about 2% penetration.
- Runway, not ceiling. At ~2% penetration the demand ceiling is not the binding constraint; the least-penetrated ground is the non-IT functions where Gartner holds under 1% of its own stated market.
- The demand engine. Rising enterprise-technology complexity — cybersecurity, digital transformation, supply chain — kept growing through the 2025 stall; the market did not shrink, Gartner's conversion slowed.
- AI cuts both ways. It expands the range of topics clients pay to be advised on, while self-serve tools can answer the simpler questions clients used to buy.
Capital & alignment
The buyback accelerated as the price fell — $2.0B repurchased in 2025
Share repurchases by year
About $2.0B repurchased in 2025 at an average $286 — spending rose as the multiple fell.
- Countercyclical buying. In Q1 2026 Gartner bought 3.3M shares at an average $158.49, against 0.3M at $507.65 a year earlier — eleven times the share count at roughly a third of the price.
- Skin in the game is modest. CEO Eugene Hall owns ~1.8% and insiders ~2.6%; 86% of Hall's $19.2M 2025 pay is equity-linked and tied to contract value.
- No dividend. Buybacks are 100% of capital return — accretive only while the shares trade below intrinsic value, value-destroying if the franchise is truly shrinking.
Key finding
Guided to accelerate toward 12–16%, contract-value growth instead fell every quarter to 0.8%
Insights contract-value growth (YoY)
A monotonic five-quarter decline against a 12–16% aspiration, with the technology-sales channel reaching zero.
- Promise vs delivery. On the day the securities class period opens management said contract value would exit 2025 above 7.8% on the way to 12-16%, and instead Insights contract-value growth decelerated every quarter to 0.8% with the technology-sales channel at zero.
- The same forecast, reprinted. Management put out the identical 12–16% model for 2026 — so the base-case re-acceleration is the forecast that just missed by about seven points, and deserves a discount rather than the benefit of the doubt.
- In fairness. Gartner does not formally guide contract value, disclosed the ~$270M federal exposure on the same call, and hit its formal 2025 revenue and EPS guidance ($13.17 adjusted EPS).
Peer multiples
Priced with the distressed pure-plays despite operating like the premium compounders
Subscription-information peers, FY2025
| Company | Rev growth | Fwd P/E | EV/EBITDA |
|---|---|---|---|
| S&P Global | +8% | 22x | 19x |
| Thomson Reuters | +3% | 22x | 14x |
| Gartner | +3.7% | 9.4x | 8x |
| Forrester | −8% | 13x | 4x |
The two-tier split tracks growth rate, not franchise quality.
- Wrong tier. Gartner trades near 9–10x earnings and ~8x EBITDA — the rating of a shrinking pure-play — while growing 3.7% with 96–99% wallet and ~85% client retention.
- The cleanest mirror. Thomson Reuters grew reported revenue at the same ~3% in 2025 yet trades near 14x EBITDA against Gartner's 8x — the direction is defensible, the magnitude wide.
- The downside comparison. Forrester, the one true pure-play, shrank 8% and trades at 0.2x sales — proof the multiple can still fall if the stall proves structural.
Multiples are approximate market figures (prices and consensus estimates), mid-July 2026; not recomputed from the filings.
The tell to watch
Wallet retention slipped below 100% in 2025 while logos held — thinner wallets, not lost clients
Retention
Wallet retention fell below 100% in 2025 for the first time in the series — the line the report watches.
- Below 100%. Wallet retention under 100% means the average account renewed for less than it spent before — the early tell that billings are softening ahead of recognized revenue.
- Logos held. Client (logo) retention stayed in its 83–86% band at 85%, so the softness is thinner spending per account, not customers leaving.
- Still unresolved. Retention stayed below 100% into Q1 2026 (GTS 97%, GBS 98%) — the cyclical recovery is asserted, not yet visible in the data.
What's priced in
The swing variable is cyclical-versus-structural, and it drives a wide fair-value range
Illustrative 2028 fair value
Bear
$100–115
Base
$180–205
Bull
$260–290
Illustrative 2028 frames, most sensitive to the exit-multiple assumption.
- Bear ($100–115). Erosion is structural, retention stays below 100%, revenue drifts to slow decline and the multiple holds a discounted 8–9x — about −18% to −29%.
- Base ($180–205). The stall is cyclical: the federal drag anniversaries out, commercial CV re-accelerates, and the multiple re-rates to ~12x — about +28% to +46%.
- Bull ($260–290). AI proves a net tailwind, growth returns to high single digits and the multiple re-rates toward its decade-long 15x+ — about +85% to +107%.
The downside floor
The near-term risk is a lower multiple, not insolvency
0.8x
Net debt / adjusted EBITDA
$1.7B
Cash vs $3.0B fixed-rate notes
BBB−
Investment grade, all agencies
~12%
Free-cash-flow yield
- Bankruptcy-remote. Leverage is 1.6x against a 4.0x covenant; debt is 100% fixed-rate at a 4.34% coupon; the nearest maturity is $800M of 2028 notes, inside $1.7B cash, a $1.0B undrawn revolver and $1.1B+ of annual free cash flow.
- Drawdown, not loss. For a margin-of-safety buyer the low end of the range is a drawdown, not a permanent loss — the downside case is multiple compression, not going concern.
- The open question. Whether a ~12% free-cash-flow yield is a margin of safety or a warning turns on the retention lines, which move before the multiple does.
What to watch
Priced for decline: a real margin of safety if the stall is cyclical, a value trap if AI erosion proves structural.
- 01Wallet retention re-crossing 100% (96% GTS in 2025, still below into Q1 2026) — the cyclical-read confirmation.
- 02Client retention holding its 83–86% band — a break below is the clearest early tell of AI displacement.
- 03Deferred revenue trend ($3.02B at Q1 2026) — billed in advance, it turns before recognized revenue does.
- 04Commercial contract value re-accelerating once the ~$144M US-federal drag anniversaries out in 2026.
This distills a guided study of Gartner built chapter by chapter — financials, contract value, moat, valuation, and what to watch.
Compiled from the full report · 2026-07-19 · For information, not investment advice.