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Gartner (IT) Down 3.9% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Gartner (IT - Free Report) . Shares have lost about 3.9% 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 its most recent earnings report in order to get a better handle on the important drivers.
Gartner Surpasses Q2 Earnings and Revenue Estimates
Gartner, Inc. has reported better-than-expected second-quarter 2024 results.
The company’s adjusted earnings (excluding 28 cents from non-recurring items) per share of $3.22 beat the Zacks Consensus Estimate by 6.3% and increased 13% from the year-ago quarter. Revenues of $1.6 billion beat the consensus estimate marginally and improved 6.1% year over year.
Revenues by Segments
Revenues in the Research segment were $1.3 billion, which increased 4.8% from the year-ago quarter on a reported basis and 5.5% on a foreign-currency-neutral basis. The gross contribution margin was 73.7%, which amounted to a gross contribution of $933 million in the reported quarter.
Conferences’ revenues were $186 million, up 10.2% year over year on a reported basis and 10.8% on a foreign-currency-neutral basis. The gross contribution margin was 58.1%, which logged a gross contribution of $108 million.
Revenues in the Consulting segment amounted to $143 million, which increased 13.1% from the year-ago quarter’s actual on a reported basis and 14.9% on a foreign-currency-neutral basis. The gross contribution margin was 37.6% in the reported quarter, which amounted to a gross contribution of $54 million.
Operating Performance
Adjusted EBITDA of $416 million increased 8.2% from the year-ago quarter on a reported basis and 9.8% on a foreign-currency-neutral basis.
Balance Sheet & Cash Flow
Gartner had $1.2 billion in cash and cash equivalents at the end of the quarter, flat with the end of the preceding quarter. The long-term debt was $2.5 billion, flat with the first quarter of 2024.
The operating cash flow totaled $188.8 million and the free cash flow utilized was $69.6 million in the reported quarter. Capital expenditure totaled $6.7 million. The company returned $340 million by repurchasing 800,000 shares.
2024 Outlook
For 2024, total revenues are expected to be at least $6.2 billion. The company raised the guidance for adjusted earnings per share, which is anticipated to be atleast $11.05 compared with the $10.90 mentioned previously. The adjusted EBITDA guidance is raised to be atleast $1.46 billion from the $1.455 billion mentioned previously. The free cash flow is anticipated to be atleast $1.080 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, Gartner has a nice Growth Score of B, a grade with the same score on the momentum front. However, 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. Notably, Gartner has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Gartner belongs to the Zacks Consulting Services industry. Another stock from the same industry, FTI Consulting (FCN - Free Report) , has gained 2.8% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
FTI Consulting reported revenues of $949.16 million in the last reported quarter, representing a year-over-year change of +9.8%. EPS of $2.34 for the same period compares with $1.75 a year ago.
For the current quarter, FTI Consulting is expected to post earnings of $2.06 per share, indicating a change of -12% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
FTI Consulting has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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Gartner (IT) Down 3.9% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Gartner (IT - Free Report) . Shares have lost about 3.9% 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 its most recent earnings report in order to get a better handle on the important drivers.
Gartner Surpasses Q2 Earnings and Revenue Estimates
Gartner, Inc. has reported better-than-expected second-quarter 2024 results.
The company’s adjusted earnings (excluding 28 cents from non-recurring items) per share of $3.22 beat the Zacks Consensus Estimate by 6.3% and increased 13% from the year-ago quarter. Revenues of $1.6 billion beat the consensus estimate marginally and improved 6.1% year over year.
Revenues by Segments
Revenues in the Research segment were $1.3 billion, which increased 4.8% from the year-ago quarter on a reported basis and 5.5% on a foreign-currency-neutral basis. The gross contribution margin was 73.7%, which amounted to a gross contribution of $933 million in the reported quarter.
Conferences’ revenues were $186 million, up 10.2% year over year on a reported basis and 10.8% on a foreign-currency-neutral basis. The gross contribution margin was 58.1%, which logged a gross contribution of $108 million.
Revenues in the Consulting segment amounted to $143 million, which increased 13.1% from the year-ago quarter’s actual on a reported basis and 14.9% on a foreign-currency-neutral basis. The gross contribution margin was 37.6% in the reported quarter, which amounted to a gross contribution of $54 million.
Operating Performance
Adjusted EBITDA of $416 million increased 8.2% from the year-ago quarter on a reported basis and 9.8% on a foreign-currency-neutral basis.
Balance Sheet & Cash Flow
Gartner had $1.2 billion in cash and cash equivalents at the end of the quarter, flat with the end of the preceding quarter. The long-term debt was $2.5 billion, flat with the first quarter of 2024.
The operating cash flow totaled $188.8 million and the free cash flow utilized was $69.6 million in the reported quarter. Capital expenditure totaled $6.7 million. The company returned $340 million by repurchasing 800,000 shares.
2024 Outlook
For 2024, total revenues are expected to be at least $6.2 billion. The company raised the guidance for adjusted earnings per share, which is anticipated to be atleast $11.05 compared with the $10.90 mentioned previously. The adjusted EBITDA guidance is raised to be atleast $1.46 billion from the $1.455 billion mentioned previously. The free cash flow is anticipated to be atleast $1.080 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, Gartner has a nice Growth Score of B, a grade with the same score on the momentum front. However, 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. Notably, Gartner has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Gartner belongs to the Zacks Consulting Services industry. Another stock from the same industry, FTI Consulting (FCN - Free Report) , has gained 2.8% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
FTI Consulting reported revenues of $949.16 million in the last reported quarter, representing a year-over-year change of +9.8%. EPS of $2.34 for the same period compares with $1.75 a year ago.
For the current quarter, FTI Consulting is expected to post earnings of $2.06 per share, indicating a change of -12% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
FTI Consulting has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.