IT

Gartner, Inc.

TMT


Presented:06/05/2020
Price:$135.00
Cap:$12.04B
Current Price:$530.04
Cap:$40.84B

Presented

Date06/05/2020
Price$135.00
Market Cap$12.04B
Ent Value$11.81B
P/E Ratio42.58x
Book Value$9.97
Div Yield0%
Shares O/S89.18M
Ave Daily Vol871,286
Short Int1.82%

Current

Price$530.04
Market Cap$40.84B
Gartner, Inc. is a research and advisory company, which delivers technology-related insights to its clients to make right decisions. It operates through the following segments: Research, Consulting and Conferences. The Research segment gives advices on the mission-critical priorities of leaders. The Consulting segment offers customized solutions to unique client needs through on-site, day-to-day support, and proprietary tools for measuring and improving IT performance. The Conferences segment involves in the business professionals across the organization. The company was founded by Gideon I. Gartner and Dave L. R. Stein in 1979 and is headquartered in Stamford, CT.

Publicly traded companies mentioned herein: Amazon.com Inc (AMZN), Gartner Inc (IT), Microsoft Corp (MSFT)

Highlights

The presenter is currently long shares of Gartner (IT) after capitalizing on the short side from late February through March 2020. His bearish stance was based on COVID-19 negatively impacting the company’s Conferences business (~11% of 2019 revenue), but management lowered 2020 guidance on May 7th, and numbers now appear to be overly conservative (i.e., beatable). With the stock at ~$135 per share, he feels that the risk/reward favors bulls. Revenue should grow by DD% over the long run, and incremental margins on the research business are high. IT’s retention rate is generally 80%+, and with just 10% penetration of the IT professionals market, there should be plenty of runway for growth. The presenter is projecting 40% upside by the end of 2021 based on a DCF model that assumes a return to DD% topline growth after this year and a 25x P/E multiple five years out (equates to ~18x FCF).

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