Gartner (IT): A Bull Case Theory

We came across a bullish thesis on Gartner on Seeking Winners’ Substack. As of 1^st July, Gartner’s share was trading at $406.07. IT’s trailing and forward P/E were 25.39 and 30.83 respectively according to Yahoo Finance.

Gartner is considered the preeminent authority in technology research, functioning as the ‘ratings agency of tech’. Its market dominance, with revenue of $6.2 billion, significantly exceeds competitors like Forrester’s $432.5 million. Gartner’s business model provides exceptional revenue visibility through its subscription structure, featuring multi-year contracts and upfront annual payments. This structure, coupled with  pricing power of 3-7%, strengthens its financial performance and drives strong operating leverage and free cash flow conversion.

Gartner operates within a vast and under-penetrated market, targeting 150,000 global enterprises with annual revenues exceeding $100 million and technology budgets of $10-50 million, representing a $200 billion total addressable market. The company’s current client spending demonstrates substantial room for expansion, providing a compelling runway for sustained revenue growth. Gartner’s sales-centric business model drives its sustained growth, and management is deliberately managing margin expectations conservatively, leading to a significant underestimation of the company’s operating leverage.

The predictable and robust cash flow generated by Gartner’s business model enables a consistent and increasing share buyback program, driving significant shareholder value through sustained share count reduction. The company’s resilience during past economic downturns and its evolving business mix position it for continued stability and defensiveness, making it an ideal investment for long-term, predictable growth. With a potential for margin expansion and a significant underestimation of the company’s operating leverage, Gartner presents a compelling investment opportunity with a potential for $39 2029E FCF/Share.

Previously, we covered a bullish thesis on Gartner by Bulls On Parade published on March 25, 2025, highlighting the company’s dominant position in technology research and advisory services, strong capital allocation strategy, and resilience in volatile markets. The company’s stock price has depreciated by 5.95% since our coverage. The previous thesis emphasized Gartner’s growth potential, with a base-case scenario suggesting a stock price of $525 and a bull case implying 40%+ upside. Seeking Winners shares a similar view, citing Gartner’s market dominance, subscription-based revenue, and potential for sustained revenue growth, but emphasizes the company’s predictable cash flow and significant underestimation of operating leverage.

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Disclosure: None. This article was originally published at Insider Monkey.