Gartner Inc (IT, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $341.77, Gartner Inc has witnessed a surge of 0.63% over a period, marked against a three-month change of 3.73%. A thorough analysis, underlined by the GuruFocus Score Rating, suggests that Gartner Inc is well-positioned for substantial growth in the near future.
Decoding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
Here is a breakdown of Gartner Inc's GF Score:
- 1. Financial strength rank: 6/10
- 2. Profitability rank: 9/10
- 3. Growth rank: 9/10
- 4. GF Value rank: 6/10
- 5. Momentum rank: 9/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With high ranks in profitability, growth, and momentum, and decent ranks in financial strength and GF value, GuruFocus assigned Gartner Inc the GF Score of 93 out of 100, which signals the highest outperformance potential.
Understanding Gartner Inc's Business
Based in Stamford, Conn., Gartner Inc provides independent research and analysis on information technology and other related technology industries. Its research is delivered to clients' desktops in the form of reports, briefings, and updates. Typical clients are chief information officers and other business executives who help plan companies' IT budgets. Gartner also provides consulting services and hosted nearly 80 IT conferences across the globe in 2007. With a market cap of $26.94 billion and sales of $5.75 billion, Gartner Inc has an operating margin of 19.99%.
Financial Strength Breakdown
According to the Financial Strength rating, Gartner Inc's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. The Interest Coverage ratio for Gartner Inc stands impressively at 9.82, underscoring its strong capability to cover its interest obligations. This robust financial position resonates with the wisdom of legendary investor Benjamin Graham, who favored companies with an interest coverage ratio of at least 5. With a favorable Debt-to-Revenue ratio of 0.53, Gartner Inc's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows Gartner Inc's impressive standing among its peers in generating profit. Gartner Inc's Operating Margin has increased (119.47%) over the past five years, as shown by the following data: 2018: 9.23; 2019: 8.94; 2020: 12.11; 2021: 19.47; 2022: 20.26. Furthermore, Gartner Inc's Gross Margin has seen a consistent rise over the past five years, as evidenced by the data: 2018: 63.05; 2019: 63.48; 2020: 67.19; 2021: 69.50; 2022: 69.07. This trend underscores the company's growing proficiency in transforming revenue into profit. The Piotroski F-Score confirms Gartner Inc's solid financial situation based on Joseph Piotroski's nine-point scale, which measures a company's profitability, funding and operating efficiency.
Growth Rank Breakdown
Ranked highly in Growth, Gartner Inc demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 13.1%, which outperforms better than 61.73% of 2391 companies in the Software industry. Moreover, Gartner Inc has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 36.8, and the rate over the past five years is 40.7. This trend accentuates the company's continued capability to drive growth.
Conclusion
Given Gartner Inc's strong financial strength, profitability, and growth metrics, the GuruFocus Score Rating highlights the firm's unparalleled position for potential outperformance. This analysis underscores the importance of considering a company's financial health, profitability, and growth potential when making investment decisions. Gartner Inc's robust financial stance and growth potential make it a compelling investment case for value investors.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
