Peer Multiples

Peer Multiples

Gartner trades at roughly 9–10x forward earnings and about 8x EV/EBITDA — the multiple of a shrinking, loss-making research pure-play, not of the premium subscription-information franchises it operationally resembles. S&P Global and Thomson Reuters, growing faster and earning higher margins, still command about 22x. The category has not re-rated; Gartner specifically has. Whether that discount is earned is the question this chapter takes up.

Where Gartner sits in its category

Gartner belongs to a small set of subscription-and-data businesses that sell recurring research, benchmarks, and workflow content to enterprises. Two of them — S&P Global and Thomson Reuters — are the category's quality leaders. Two others — Forrester Research and Clarivate — show what the same model looks like when growth turns negative. Gartner's operations belong with the first pair; its valuation sits with the second.

Gartner 9.4x, the premium pair ~22x, Forrester ~13x on depressed earnings. These are approximate market figures (share prices and consensus estimates) as of mid-July 2026, not recomputable from the filings; Gartner's own ~8x EV/EBITDA and ~9.4x forward P/E per the same feed.

The fundamentals behind those multiples make the gap concrete. S&P Global earned $15.3 billion of revenue in 2025, up 8%, at a 42% operating margin [1]. Thomson Reuters grew revenue 3% as reported and 7% organically [2]. Gartner grew 3.7% to $6.5 billion [3]. Forrester's revenue fell 8%, with events down 29% [4], and Clarivate's fell 4% [5].

Fundamentals (revenue growth, operating margin) from FY2025 Form 10-K filings: Gartner [6], S&P Global [7], Forrester [8], Clarivate [9]. Market caps and multiples are approximate market figures (prices and consensus estimates), mid-July 2026, not recomputable from the corpus; S&P Global EV/EBITDA derived. Clarivate's forward P/E and EV/EBITDA are not meaningful on a net loss.

Two tiers are visible. The premium pair trades at about 22x forward earnings; Gartner and the distressed pure-plays trade in the single digits to low teens. The difference between the tiers is not franchise quality; it tracks the growth rate, which runs from +8% at S&P Global down to −8% at Forrester.

Whether the discount is earned

Part of it plainly is. S&P Global grew 8% and accelerated; its operating margin is 42%, more than double Gartner's 16% GAAP figure [10]. Thomson Reuters is compounding revenue at 7% organically [11]. A business whose contract value has decelerated to roughly 1% (Contract Value Stall) should trade below businesses still growing mid-to-high single digits. Some of Gartner's discount is the market correctly pricing a slower grower.

Two adjustments narrow the margin gap without closing the growth gap. Gartner's blended GAAP operating margin looks low because conferences and consulting dilute it and because stock compensation runs through it; on the cleaner run-rate the business earns a ~25% adjusted EBITDA margin, and its Insights research segment carries a 77% contribution margin (Competitive Moat). And S&P Global's reported operating profit is struck after $1.1 billion of annual intangible amortization from the IHS Markit merger [12], which flatters Gartner's relative cash economics. EV/EBITDA, which normalizes both capital structure and amortization, still leaves Gartner at roughly 8x on trailing FY2025 EBITDA — about 7x on the 2026E guided EBITDA the valuation chapters use — against roughly 14x for Thomson Reuters and near 19x for S&P Global.

What the discount does not price is any resemblance to the premium tier's durability. Gartner grew revenue, generated more than $1.1 billion of free cash flow, and held wallet retention at 96–99% and client retention near 85% in a down year (Contract Value Stall). At 8x EBITDA the market is valuing that franchise closer to a business in decline than to the compounders it out-retains. The Thomson Reuters comparison is the most direct: the two grew reported revenue at a nearly identical 3% in 2025 [13] [14], yet Gartner's EV/EBITDA is roughly 57% of Thomson Reuters'. The market is paying up for Thomson Reuters' faster organic line and paying down Gartner's stall; the direction is defensible but the magnitude is wide.

Revenue growth from FY2025 10-K filings (cited above); EV/EBITDA from market data, mid-July 2026 (S&P Global derived). Clarivate omitted — EV/EBITDA not meaningful.

What Forrester says about the downside

Forrester is the closest downside comparison: the one indexed peer that runs Gartner's exact model — subscription research plus consulting and events — and whose contract value actually turned down. Revenue fell 8% in 2025, research declined 6%, consulting 13%, and events 29% [15]. It took two goodwill impairment charges — $83 million and $26 million — in the year [16]. Its market capitalization has collapsed to roughly $200 million, about 0.2x revenue and 4x EBITDA.

Forrester also exposes a trap in reading the P/E column. On depressed earnings Forrester trades near 13x forward — optically richer than Gartner's 9–10x — even as it trades at a fifth of a year's revenue. Where a research business is heading shows up in EV/sales and EV/EBITDA long before it shows up in P/E. On those asset-based lenses Forrester (0.2x sales, 4x EBITDA) is priced as a franchise in decline; Gartner (roughly 1.6x sales, 8x EBITDA) is priced halfway between Forrester and the premium pair — cheaper than its retention and cash generation suggest, dearer than a genuinely shrinking peer.

The relative-value read

Gartner's multiple has two natural anchors, and which one applies is the cyclical-versus-structural question in valuation form. If the contract-value stall is cyclical — the federal cliff anniversaries out and wallet retention re-crosses 100% — the relevant comparison is S&P Global and Thomson Reuters at ~22x, and the re-rating room from 9–10x is large. If the stall is structural — retention keeps sliding toward Forrester's experience — the relevant comparison is Forrester, today's multiple is roughly fair, and Forrester's 0.2x sales shows there is still room to fall. The market has priced Gartner in the distressed tier while its operations remain in the premium one; the same contract-value inflection the report flags elsewhere (What's Priced In) is what would move it from one anchor to the other.