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Gartner (IT) Up 4.2% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Gartner (IT - Free Report) . Shares have added about 4.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Gartner due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Gartner Surpasses Q4 Earnings & Revenue Estimates
Gartner, Inc. reported better-than-expected fourth-quarter 2023 results.
Adjusted earnings (excluding 40 cents from non-recurring items) per share of $3.04 beat the Zacks Consensus Estimate by 9.4% but decreased 18% from the year-ago reported figure. Revenues of $1.6 billion beat the consensus estimate by 0.6% and improved 5% year over year on a reported basis and 4% on a foreign-currency-neutral basis.
Total contract value was $4.8 billion, up 8% year over year on a foreign-currency-neutral basis.
Quarterly Numbers in Detail
Revenues in the Research segment increased 6% year over year on a reported basis and 5% on a foreign-currency-neutral basis and matched our estimated $1.24 billion. The gross contribution margin was 74%, which came to $921 million in the reported quarter.
Conferences’ revenues gained 14% year over year on a reported basis and 12% on a foreign-currency-neutral basis and matched our estimated $214 million. The gross contribution margin was 50% in the reported quarter, amounting to $108 million.
Revenues in the Consulting segment declined 7% year over year on both a reported basis and foreign-currency-neutral basis to $128 million, missing our estimated $133 million. The gross contribution margin was 27% in the reported quarter to $35 million.
Adjusted EBITDA of $386 million decreased 8.3% year over year on a reported basis and 9% on a foreign-currency-neutral basis.
Operating cash flow totaled $224 million while free cash flow was $196 million in the reported quarter. Capital expenditures totaled $28 million.
In the year 2023, Gartner returned $600 million by repurchasing 1.8 million shares.
2024 Outlook
Total revenues are expected to be $6.24 billion. Adjusted earnings per share (EPS) are now anticipated to be $10.55. Adjusted EBITDA is projected to be $1.44 billion. Free cash flow is anticipated to be $1.065 billion.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
At this time, Gartner has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, 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 F. 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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Gartner (IT) Up 4.2% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Gartner (IT - Free Report) . Shares have added about 4.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Gartner due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Gartner Surpasses Q4 Earnings & Revenue Estimates
Gartner, Inc. reported better-than-expected fourth-quarter 2023 results.
Adjusted earnings (excluding 40 cents from non-recurring items) per share of $3.04 beat the Zacks Consensus Estimate by 9.4% but decreased 18% from the year-ago reported figure. Revenues of $1.6 billion beat the consensus estimate by 0.6% and improved 5% year over year on a reported basis and 4% on a foreign-currency-neutral basis.
Total contract value was $4.8 billion, up 8% year over year on a foreign-currency-neutral basis.
Quarterly Numbers in Detail
Revenues in the Research segment increased 6% year over year on a reported basis and 5% on a foreign-currency-neutral basis and matched our estimated $1.24 billion. The gross contribution margin was 74%, which came to $921 million in the reported quarter.
Conferences’ revenues gained 14% year over year on a reported basis and 12% on a foreign-currency-neutral basis and matched our estimated $214 million. The gross contribution margin was 50% in the reported quarter, amounting to $108 million.
Revenues in the Consulting segment declined 7% year over year on both a reported basis and foreign-currency-neutral basis to $128 million, missing our estimated $133 million. The gross contribution margin was 27% in the reported quarter to $35 million.
Adjusted EBITDA of $386 million decreased 8.3% year over year on a reported basis and 9% on a foreign-currency-neutral basis.
Operating cash flow totaled $224 million while free cash flow was $196 million in the reported quarter. Capital expenditures totaled $28 million.
In the year 2023, Gartner returned $600 million by repurchasing 1.8 million shares.
2024 Outlook
Total revenues are expected to be $6.24 billion. Adjusted earnings per share (EPS) are now anticipated to be $10.55. Adjusted EBITDA is projected to be $1.44 billion. Free cash flow is anticipated to be $1.065 billion.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
At this time, Gartner has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, 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 F. 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.