Gartner, Inc. (IT - Free Report) reported better-than-expected third-quarter 2020 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.
Adjusted earnings per share of 91 cents beat the consensus mark by 78.4% and increased 30% year over year. Revenues of $995 million beat the consensus estimate by 6.4% but declined 0.6% year over year on a reported basis and 1% on a foreign currency-neutral basis.
Total contract value was $3.4 billion, up 5.3% year over year on a foreign currency-neutral basis.
So far this year, shares of Gartner have lost 18.9% against 1% growth of the industry it belongs to and 2.3% increase of the Zacks S&P 500 composite.
Quarterly Numbers in Detail
Revenues at the Research segment increased 6.2% year over year on a reported basis and 5.8% on a foreign currency-neutral basis to $893 million. Gross contribution margin was 72% in the reported quarter.
Revenues at the Conferences segment declined 80.8% year over year on a reported basis and 81.1% on a foreign currency-neutral basis to $13 million. Gross contribution margin was 16% in the reported quarter.
Revenues at the Consulting segment declined 4.4% year over year on a reported basis and 5.6% on a foreign currency-neutral basis to $89 million. Gross contribution margin was 31.6% in the reported quarter.
Adjusted EBITDA of $168 million improved 20% year over year on a reported basis and 19.4% on a foreign currency-neutral basis.
Operating cash flow totaled $244 million and free cash flow was $229 million in the reported quarter. Capital expenditures totaled $15 million.
2020 View
Gartner raised its full-year 2020 guidance. The company now expects total revenues to be $4.05 billion compared with the prior guidance of $3.88 billion. The current Zacks Consensus Estimate of $3.90 billion is below the updated guidance.
Adjusted EPS is anticipated to be $4.07 compared with the prior guidance of $3.08. The current Zacks Consensus Estimate of $3.19 is below the updated guidance.
Adjusted EBITDA is projected to be $740 million compared with the prior guidance of $635 million. Free cash flow is anticipated to be $625 million compared with the prior guidance of $425 million.
Currently, Gartner carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Business Services Companies
Equifax (EFX - Free Report) reported better-than-expected third-quarter 2020 results, with adjusted earnings of $1.87 per share beating the Zacks Consensus Estimate by 16.2% and improving 26.4% on a year-over-year basis. The reported figure exceeded the guided range of $1.30-$1.40.
The Interpublic Group of Companies (IPG - Free Report) reported better-than-expected third-quarter 2020 adjusted earnings of 53 cents per share, which beat the Zacks Consensus Estimate by 43.2% and improved 8.2% on a year-over-year basis.
IQVIA Holdings (IQV - Free Report) reported solid third-quarter 2020 adjusted earnings per share of $1.63, which beat the consensus mark by 8% and improved 1.9% on a year-over-year basis. The reported figure was above the guided range of $1.47-$1.55.
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Gartner, Inc. (IT - Free Report) reported better-than-expected third-quarter 2020 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.
Adjusted earnings per share of 91 cents beat the consensus mark by 78.4% and increased 30% year over year. Revenues of $995 million beat the consensus estimate by 6.4% but declined 0.6% year over year on a reported basis and 1% on a foreign currency-neutral basis.
Total contract value was $3.4 billion, up 5.3% year over year on a foreign currency-neutral basis.
So far this year, shares of Gartner have lost 18.9% against 1% growth of the industry it belongs to and 2.3% increase of the Zacks S&P 500 composite.
Quarterly Numbers in Detail
Revenues at the Research segment increased 6.2% year over year on a reported basis and 5.8% on a foreign currency-neutral basis to $893 million. Gross contribution margin was 72% in the reported quarter.
Revenues at the Conferences segment declined 80.8% year over year on a reported basis and 81.1% on a foreign currency-neutral basis to $13 million. Gross contribution margin was 16% in the reported quarter.
Revenues at the Consulting segment declined 4.4% year over year on a reported basis and 5.6% on a foreign currency-neutral basis to $89 million. Gross contribution margin was 31.6% in the reported quarter.
Adjusted EBITDA of $168 million improved 20% year over year on a reported basis and 19.4% on a foreign currency-neutral basis.
Operating cash flow totaled $244 million and free cash flow was $229 million in the reported quarter. Capital expenditures totaled $15 million.
2020 View
Gartner raised its full-year 2020 guidance. The company now expects total revenues to be $4.05 billion compared with the prior guidance of $3.88 billion. The current Zacks Consensus Estimate of $3.90 billion is below the updated guidance.
Adjusted EPS is anticipated to be $4.07 compared with the prior guidance of $3.08. The current Zacks Consensus Estimate of $3.19 is below the updated guidance.
Adjusted EBITDA is projected to be $740 million compared with the prior guidance of $635 million. Free cash flow is anticipated to be $625 million compared with the prior guidance of $425 million.
Currently, Gartner carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Business Services Companies
Equifax (EFX - Free Report) reported better-than-expected third-quarter 2020 results, with adjusted earnings of $1.87 per share beating the Zacks Consensus Estimate by 16.2% and improving 26.4% on a year-over-year basis. The reported figure exceeded the guided range of $1.30-$1.40.
The Interpublic Group of Companies (IPG - Free Report) reported better-than-expected third-quarter 2020 adjusted earnings of 53 cents per share, which beat the Zacks Consensus Estimate by 43.2% and improved 8.2% on a year-over-year basis.
IQVIA Holdings (IQV - Free Report) reported solid third-quarter 2020 adjusted earnings per share of $1.63, which beat the consensus mark by 8% and improved 1.9% on a year-over-year basis. The reported figure was above the guided range of $1.47-$1.55.
Legal Marijuana: An Investor’s Dream
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
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Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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