Gartner, Inc. (IT): A Bear Case Theory 

We came across a bearish thesis on Gartner, Inc. on X.com by Fierce__beast. In this article, we will summarize the bulls’ thesis on IT. Gartner, Inc.’s share was trading at $262.87 as of September 30th. IT’s trailing and forward P/E were 16.28 and 21.46 respectively according to Yahoo Finance.

Gartner, Inc. ($IT) is facing mounting challenges as its subscription revenue growth slows and both earnings and revenue estimates have been revised downward. Q1-2025 Net Contract Value turned negative for the first time since COVID, declining by $63 million, signaling a red flag that contributed to the post-earnings sell-off despite an EPS beat. The Research segment remains the company’s profit engine, contributing roughly 90% of segment EBIT due to margins above 70%, though it represents only 42% of total revenue.

While still expanding, key leading indicators are weakening: new contract value added (NCVI) fell year-over-year for Global Technology Sales and was down 3% for Global Business Sales, with net growth increasingly reliant on price increases—a lever that has limited longevity. Emerging generative AI tools such as Deep Seek and Perplexity are beginning to commoditize the core value proposition of Gartner’s research by summarizing public domain data, performing vendor comparisons, and generating best-practice guidance, all tasks traditionally justifying the high cost of seat licenses.

As these AI capabilities advance, clients may reduce seat counts or resist annual price increases, pressuring the $10k-per-seat research pricing. This disruption, combined with decelerating contract growth, suggests that EPS forecasts of 9%–15% growth for 2026–2027 are likely overstated and will require significant downward revision. Overall, Gartner faces structural headwinds that threaten both top-line growth and pricing power, creating meaningful risk for investors despite the company’s historically strong margins and profitable research business.

Previously we covered a bullish thesis on Gartner, Inc. (IT) by Bulls On Parade in March 2025, which highlighted the company’s strong subscription revenue, high-margin Research segment, and disciplined capital allocation. The company’s stock price has depreciated approximately by 38.7% since our coverage. The thesis still stands as Gartner remains a market leader. Fierce__beast shares a contrarian view, emphasizing AI-driven pressures and slowing contract growth.

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Disclosure: None.