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Here's Why Gartner (IT) Deserves a Spot in Your Portfolio

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Gartner (IT - Free Report) has had an impressive run over the past year-to-date period, gaining 36.1% compared with its industry’s 27.8% growth.

Reasons Why IT is an Attractive Pick Now

Solid Rank:

IT currently sports a Zacks Rank #1 (Strong Buy). Our research shows that stocks with a Zacks Rank #1 or 2 (Buy) offer the best investment opportunities. Thus, the company appears to be a compelling investment proposition at the moment.

Positive Earnings Trend Revision:

The Zacks Consensus Estimate of Gartner’s fourth-quarter earnings is pegged at $2.77 per share. The estimate for IT's full year 2023 earnings is pegged at $11.06 per share. This has been revised 9.1% and 8.2% upward, respectively, in the past 60 days. The favorable estimate revision reflects the confidence of brokers in the stock.

Positive Earnings Surprise History: 

IT has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in all the trailing four quarters, delivering an earnings surprise of 34.4%, on average.

Bullish Industry Rank:

The industry, to which Gartner belongs, currently has a Zacks Industry Rank of 64 (of 251 groups). Such a solid rank places the industry in the top 25% of the Zacks industries. Studies show that 50% of a stock price movement is directly tied to the performance of the industry group that it hails from.

A mediocre stock in a healthy group is likely to outperform a robust stock in a poor industry. Therefore, taking the industry’s performance into account becomes necessary.

Growth Factors:

Gartner provides valuable and unbiased analysis, aiding organizations in significant cost savings through thorough research. The evolving technology landscape and IoT expansion have blurred physical and digital distinctions, thus making IT crucial for productivity, performance and cybersecurity. Businesses and government agencies rely on Gartner's insights to navigate this dynamic industry, maximizing returns on IT investments.

The company's commitment to shareholder value is evident in its substantial share repurchases, with 3.8 million, 7.3 million and 1.2 million shares bought back in 2022, 2021 and 2020, respectively, totaling $1 billion, $1.7 billion and $176.3 million. These actions reflect confidence in the business and contribute to investor trust and enhanced earnings per share.

Other Stocks to Consider

The following top-ranked stocks from the broader Business Services sector are also worth consideration:

Broadridge Financial Solutions (BR - Free Report) : The Zacks Consensus Estimate for Broadridge’s 2023 revenues indicates 7.7% growth from the year-ago figure while earnings are expected to grow 10.1%. The company beat the consensus estimate in three of the past four quarters and matched on one instance, the average surprise being 5.4%.

BR currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

FTI Consulting (FCN - Free Report) : The Zacks Consensus Estimate for FCN’s 2023 revenues indicates 12.1% growth from the year-ago figure while earnings are expected to grow 3.4%. The company beat the consensus estimate in three of the trailing four quarters and missed on one instance, the average surprise being 8.5%.

FCN carries a Zacks Rank of 2 at present.


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