A month has gone by since the last earnings report for Gartner (IT). Shares have lost about 9.4% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Gartner due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Gartner Surpasses Q4 Earnings and Revenue Estimates

Gartner has reported better-than-expected fourth-quarter 2024 results.

The company’s adjusted earnings per share of $5.5 beat the Zacks Consensus Estimate by 69.3% and increased 79.3% from the year-ago quarter. Revenues of $1.7 billion surpassed the consensus estimate by 1.8% and improved 8.1% year over year.

Gartner’s Revenues by Segments

Revenues in the Research segment were $1.3 billion, which grew 5.4% from the year-ago quarter on a reported basis and 5.7% on a foreign-currency-neutral basis. The gross contribution margin was 74.1%, which amounted to a gross contribution of $972 million in the fourth quarter of 2024.

Conferences’ revenues were $251 million, which increased 17.2% year over year on a reported basis and 17.1% on a foreign-currency-neutral basis. The gross contribution margin was 47.6%, which logged a gross contribution of $120 million.

Revenues in the Consulting segment amounted to $153 million, which increased 19.3% from the year-ago quarter on a reported basis and 19.2% on a foreign-currency-neutral basis. The gross contribution margin was 35.1% in the reported quarter, which amounted to a gross contribution of $54 million.

Gartner’s Operating Performance

Adjusted EBITDA of $417 million moved up 8% from the year-ago quarter on a reported basis and 8.9% on a foreign-currency-neutral basis.

Balance Sheet & Cash Flow of IT

Gartner had $1.9 billion in cash and cash equivalents at the end of the quarter compared with $1.8 billion at the end of the preceding quarter. The long-term debt was $2.5 billion, flat with the third quarter of 2024.

The operating cash flow totaled $335.4 million and the free cash flow utilized was $110.2 million in the reported quarter. Capital expenditure totaled $8.1 million.

Gartner’s 2025 Outlook

For 2025, the company has raised the guidance for total revenues and expects it to be at least $6.55 billion compared with the preceding quarter’s view of $6.23 billion.

IT has lowered the guidance for adjusted earnings per share to at least $11.45 from the $11.75 provided in the preceding quarter.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

The consensus estimate has shifted -8.36% due to these changes.

VGM Scores

At this time, Gartner has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Gartner has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

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This article originally published on Zacks Investment Research (zacks.com).

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