Gartner, Inc. (IT) has outperformed its peers in the industry due to its large customer base. The customers rely on the company’s comprehensive, objective and independent research reports that provide actionable insights. Gartner reported better-than-expected earnings in the last four quarters, driven by its tailwinds. In Q1 2023, Gartner reported earnings per share of $2.88 (excluding 49 cents from non-recurring items), beating the Zacks Consensus Estimate by 41.2% and marking a 23.6% YoY increase. Moreover, its revenues of $1.41 billion beat the consensus estimate by 1.3% and improved 11.6% YoY on a reported basis and 14.3% on a foreign-currency-neutral basis.
Despite its dominance, Gartner continues to face liquidity issues; its current ratio at the end of Q1 2023 fell to 0.84 from 0.70 at the end of Q1 2022. This signifies its inability to meet short-term debt obligations. Another significant risk for the business is being exposed to fluctuations resulting from foreign currency transactions. Appreciation or depreciation of the U.S. dollar against foreign currencies adversely impacts the company’s results.
Current Situation of Gartner
Gartner’s acquisition of CEB reinforced its market position. The combination with the analyst-driven, syndicated research and advisory services of CEB’s delivers a differentiated service portfolio across the globe. Gartner’s operating risks are reduced by its lower customer concentration. In the last three years, Gartner repurchased shares worth $1.9 billion, highlighting the company’s commitment toward creating value for shareholders.
Zacks Rank and Stocks to Consider
IT currently holds a Zacks Rank #3 (Hold). Investors interested in the Business Services sector may consider the following stocks:
- Green Dot (GDOT)
- Maximus (MMS)
- Booz Allen (BAH)
GDOT has a VGM score of A and presently carries a Zacks Rank #1 (Strong Buy).
MMS has a VGM score of A and a Zacks Rank #2 (Buy).
BAH carries a Zacks Rank of 2.
Zacks Investment Research has released its list of “7 Best Stocks for the Next 30 Days,” which comprises seven elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. The list has beaten the market by over two times, with an average gain of +24.3% per year since 1988.
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We must note that the views and opinions expressed herein are solely those of the author and do not necessarily reflect those of Nasdaq, Inc.
