🧐 ProPicks AI October update is out now! See which stocks made the listPick Stocks with AI

Deutsche Bank starts Gartner stock with Hold, sees growth in under-penetrated market

EditorEmilio Ghigini
Published 16-04-2024, 02:30 pm
IT
-

On Tuesday, Deutsche Bank (ETR:DBKGn) initiated coverage on Gartner Inc (NYSE:IT) stock, a leading research and advisory company, with a Hold rating and a price target of $507.00. The firm highlighted Gartner's potential in an under-penetrated market, particularly emphasizing its strong brand within the Technology sector.

Gartner's addressable market is substantial, with a total addressable market (TAM) estimated at $200 billion, and $45 billion specific to Technology. The company's current revenues from technology-related services account for a mere 0.01% of the global IT spending, which stands at $5 trillion. Despite the small percentage, Deutsche Bank sees a medium-term growth target of over 12% in Contract Value (CV) for Gartner.

The company's growth in CV has recently underperformed its targets, but Deutsche Bank anticipates a re-acceleration in 2024. However, the timeline for Gartner to return to its growth target of over 12% remains uncertain amid tech sector budget recalibrations.

Deutsche Bank justifies Gartner's high valuation by pointing to its strong free cash flow (FCF) conversion and the fact that 75% of the company's revenues are generated from recurring subscription models. This financial stability is a key factor in the firm's Hold rating.

InvestingPro Insights

In light of Deutsche Bank's analysis, Gartner Inc's (NYSE:IT) financial metrics and market performance provide additional context for investors. The company's market capitalization stands at $36.15 billion, reflecting its significant presence in the industry. With a Price/Earnings (P/E) ratio of 41.53 and an adjusted P/E ratio for the last twelve months as of Q4 2023 at 45.5, Gartner trades at a high earnings multiple, indicating that investors may expect continued growth and profitability. However, this comes with a high Price/Book multiple of 53.12, suggesting the stock may be valued richly in terms of its net asset value.

InvestingPro Tips highlight that Gartner has been trading near its 52-week high, with the price at 96.98% of this peak. This could signal confidence among investors or, alternatively, a need for caution if the market adjusts. The company has also shown a solid revenue growth of 7.87% in the last twelve months as of Q4 2023, coupled with a gross profit margin of 67.78%, underpinning its strong market position and efficient operations.

For those looking for more in-depth analysis, there are additional InvestingPro Tips available for Gartner, which can be accessed by visiting https://www.investing.com/pro/IT. As an exclusive offer, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. This could be a valuable resource for understanding the nuances of Gartner's financial health and market potential.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.