I have long found Gartner’s Magic Quadrants (MQs) – a visual representation of market leadership and innovation, both fascinating and useful. When I saw the company recently authorize a hefty $1 billion stock buyback, it raised a deeper question: in an era where AI and LLMs are redefining how we access insights, do Gartner’s legacy frameworks like the MQ still carry weight? I decided it was time to take a closer look at the research powerhouse behind the quadrants, its evolving relevance, and what this capital return move says about its future.
Gartner, Inc. (IT): $245.27
Market Cap: $19.42B
Enterprise Value: $20.09B
Key Insights
With operations in nearly 90 countries and a team of over 21,000+ employees (an increase of 4% from the prior year), Gartner has spent more than 45 years helping organizations with research and advisory services.
The company operates across three primary service lines:
As of December 2024, Gartner’s Insights segment generated roughly 82% of total revenue, with Conferences and Consulting contributing about 9% each. This mix highlights the company’s highly recurring, subscription-driven model, underpinned by long-term contracts, high renewal rates, and a broad, loyal client base. Approximately 75% of Gartner’s Contract Value (CV) comes from services provided to IT departments, with the remaining 25% spread across other business functions like HR, finance, marketing, and supply chain. Given this heavy IT focus, the company’s ticker symbol “IT” is quite fitting.
Source: Gartner (Investor Presentation)
As businesses face increasing complexity and rapid digital change, demand for reliable analytics and decision support is rising. Gartner provides research, advisory, and events that help organizations navigate these challenges.
Yet its recent performance tells a different story. After a decade of consistent outperformance and industry leadership, Gartner has stumbled in the past three years, with its stock down nearly 50% over the last year alone.
This sharp reversal may reflect the rise of AI and large language models (LLMs), which are increasingly viewed as potential disruptors to Gartner’s traditional research and advisory model, raising concerns about the long-term relevance of its services in an AI-driven world.
Practical Tools That Power Smarter Decisions
Gartner provides decision-support tools like Magic Quadrants, which rank over 1,000 vendors across 100+ updated reports. Gartner Score assesses maturity across 60+ functions, Hype Cycles track 2,000+ technologies, Ignition Guides offer 400+ execution playbooks, and the Digital IQ Index benchmarks digital marketing. Its new AskGartner tool uses internal data and AI to deliver fast, expert answers.
The company’s evolution has been strategic. While Gartner’s origins are in IT research, the 2017 acquisition of CEB expanded its relevance across enterprise functions such as HR, finance, and supply chain, broadening its total addressable market.
Management Team
Gartner’s leadership team consists of long-tenured executives with deep industry experience.
Eugene Hall has been Gartner’s CEO since 2004 and assumed the role of Chairman of the Board in 2024. Before joining Gartner, he was a senior executive at ADP, heading its Employer Services Major Accounts Division, and earlier spent 16 years at McKinsey & Company, where he rose to Director. Under his leadership, Gartner’s stock has surged more than 2,000%, climbing from low double digits to triple-digit levels.
Craig Safian, Gartner’s CFO, joined the company in 2002 and has held key roles, including VP of Corporate Development and Financial Planning. Earlier in his career, he held finance positions at Headstrong (now part of Genpact) and Bristol-Myers Squibb, and began as a CPA at Friedman LLP. He holds a degree from Rutgers and an MBA from Emory’s Goizueta Business School.
Gartner’s leadership team has guided the company through various market cycles with strong execution and financial discipline. However, with slowing growth and increasing macroeconomic pressures, they now face a key challenge in restoring the company’s momentum and returning to sustained double-digit growth.
Valuation
Gartner’s shares are trading well below their historical valuation levels, with a forward EV/EBITDA of 13.3 and a forward P/E of 24.27, marking the lowest valuation in over a decade, even beneath the levels seen during the COVID-19 downturn. This sharp discount, despite Gartner’s strong long-term fundamentals, likely played a role in management’s decision to authorize a $1 billion share repurchase, a move that appears both opportunistic and well-timed.
Although the current valuation may appear attractive, it likely reflects real concerns around near-term demand softness.
Share Repurchase Overview
Gartner prioritizes share buybacks over dividends. In 2024, it repurchased $735 million in shares, followed by $163 million in Q1 2025. Given the declining share price, the company strategically accelerated its buybacks in 2025, repurchasing $274 million in Q2 and an additional $282 million after the quarter, bringing year-to-date repurchases to $720 million.
Source: InsideArbitrage
To further support this, the Board authorized an additional $700 million in July and $1 billion more in September, with the latter representing approximately 6% of its market cap at announcement. The latest authorization supplements the company’s existing $6 billion repurchase program, which had approximately $450 million remaining as of August 31, 2025. Over the past four years, Gartner has consistently repurchased its shares, reducing its share count by roughly 11%.
Financials
Gartner maintains a highly profitable business model, with gross margins at 68% and net margins around 20%. Despite recent underperformance in its share price, the company continues to deliver year-over-year growth in both revenue and earnings. It has grown its revenue by about 9% over the last five years. The balance sheet remains solid with net debt of $665 million which it has been consistently reducing as seen from the image below. Its gross debt-to-EBITDA ratio is well below 2x, reflecting prudent financial management. As of the end of Q2, it held approximately $2.2 billion in cash.
Source: InsideArbitrage
Free cash flow also remains strong, often exceeding reported earnings. With $2.9 billion in total liquidity, including an available credit revolver, excess cash, and low leverage, Gartner is well-positioned to execute on its capital allocation priorities that include disciplined share buybacks and targeted tuck-in acquisitions, reinforcing both shareholder value and long-term strategic growth.
Source: Gartner (Investor Presentation)
Peers
Gartner operates across three core areas: research, consulting, and conferences, but its competitive landscape differs by segment. In the consulting and IT services space, it faces competition from larger players like Cognizant Technology Solutions (CTSH) and Booz Allen Hamilton (BAH). In the research and advisory domain, its closest direct peer is Forrester Research (FORR), albeit on a much smaller scale.
Over the past year, all these companies have faced significant share price declines, underperforming the broader market amid macro pressures, tightened enterprise IT budgets, and rising concerns over how AI could reshape traditional business models. Among them, Gartner stands apart in profitability, driven by its subscription-based Research segment, which contributes over 80% of revenue and delivers superior margins and strong free cash flow. While Cognizant leverages scale in large IT implementations and Booz Allen follows a government contract-driven model, Gartner’s focus on recurring, insight-led services offers a more resilient and high-margin approach. Yet, across the board, valuations remain depressed, as investors weigh the disruptive potential of AI on legacy consulting and research businesses.
AI: Catalyst or Competitor for Gartner’s Business Model?
AI is reshaping business and has become the top demand area across Gartner’s coverage. Organizations see huge potential but need guidance to use it effectively, an area where Gartner’s proprietary research and deep executive insights currently give it an edge.
The concern, however, is whether AI could eventually serve as a “good enough” substitute for some of Gartner’s offerings. Instead of purchasing a Magic Quadrant or subscribing to Gartner’s research, a company might use an advanced AI model to aggregate and synthesize public data from websites, press releases, and user reviews into a preliminary vendor list or market map. If that approach became sufficiently reliable, it could significantly hurt Gartner’s new business growth.
I have personally used a LLM to build something equivalent to the Magic Quadrant when looking at cybersecurity companies and conversations with industry professionals indicated that the ranking within the quadrants by the LLM was quite good.
For now, Gartner’s value lies in exclusive insights and strategic context that AI models can’t fully replicate. But as AI evolves rapidly, it presents both a competitive challenge and a strategic opportunity, making it one of the most important dynamics for Gartner to navigate in the years ahead.
Recent Headwinds and Gartner’s Response
Gartner faced its biggest challenge in Q2 2025 from the U.S. federal sector, where new cost-cutting directives under the Department of Government Efficiency (DOGE) significantly hindered contract renewals and new purchases. While federal business makes up only about 4–5% of Gartner’s total contract value, its research CV with federal clients fell 27%, dropping from $275 million in December 2024 to $200 million by June 2025. Less than half of the contracts up for renewal were retained, pointing to unusually high churn.
Source: Gartner (Investor Presentation)
At the same time, broader tariff concerns triggered widespread budget tightening, with purchase decisions escalating from department heads to CFOs and CEOs. A Gartner survey revealed that 78% of CEOs are actively cutting costs to maintain performance.
In response, Gartner is implementing a multi-pronged strategy:
Management expects these initiatives to contribute 100–200 basis points towards growth, supporting a path to high single-digit growth in 2026 and a return to double-digit growth by 2027 and beyond.
Q2 2025 Earnings Recap
Gartner reported solid headline results in Q2, with revenue up 5.7% YoY to $1.7 billion. However, growth has been gradually slowing. The newly renamed Business and Technology Insights segment grew 4.2%, while Conferences and Consulting posted stronger gains of 13.6% and 8.8%, respectively.
Source: Gartner (Investor Presentation)
Global Technology Sales (GTS) client retention held steady at 84% in 2025 vs. 83% in 2024, with wallet retention slipping to 99% from 101%. Global Business Sales (GBS) client retention remained 87%, while wallet retention eased to 104% from 106%, reflecting reduced spending by existing clients compared with 2024.
The key concern lies in the deceleration of Contract Value (CV). Total CV growth slowed to 4.9%, down from 6.7% in Q1, with softness across both major segments: GTS CV growth dropped to 3.6% and GBS slowed to 9.2%.
As a result, management lowered FY25 revenue guidance by ~$80 million, cutting Insights segment expectations from $5.335 billion to $5.255 billion. CV growth is now projected to end the year in the low-to-mid single digits.
Bottom Line
Investor’s perception of Gartner has shifted from a high growth and high margin business to that of a melting ice cube business. This shift in perception translates into multiple contraction as seen the big drop in the stock over the last year. Management’s recently announced $1 billion share repurchase could provide some support to the stock by signaling confidence and enhancing EPS, but buybacks alone are unlikely to offset the drag from soft demand and structural uncertainty.
Moreover, it is worth noting that nine analysts have revised their earnings expectations downwards for the upcoming period, indicating potential concerns about future profitability.
While the company projects a return to high single-digit CV growth in 2026 and double-digit growth by 2027, the lack of near-term catalysts and rising structural questions around AI suggest the stock may remain range-bound for now. Until demand stabilizes and Gartner proves its value proposition is resilient in an AI-driven world, it is best to avoid picking bottoms with this stock. Eventually, the company will become too cheap to ignore, especially if the management team continues to execute as it has in the past. I don’t think we are there yet and will add the company to my watchlist.
Welcome to edition 106 of Buyback Wednesdays, a monthly series that tracks the top stock buyback announcements during the prior month. The companies in the list below are the ones that announced the most significant buybacks as a percentage of their market caps. They are not the largest buybacks in absolute dollar terms. A word of caution. Some of these companies could be low-volume small-cap or micro-cap stocks with a market cap below $2 billion.
With the winding up of the earnings season, there has been a significant decline in the number of companies announcing share buybacks, dropping to 80 this month from 105 in the prior month.
Top 5 Stock Buyback Announcements
1. CEA Industries Inc. (BNC): $10.2
On September 19, 2025, the Board of Directors of this engineering, design, and technology solutions provider and crypto treasury company announced that it had approved a new $250 million stock repurchase agreement, equal to around 61% of its market cap at announcement.
| Market Cap: $404.98M | Avg. Daily Volume (30 days): 789,589 | Revenue (TTM): $4.03M |
| Net Income Margin (TTM):-264.34% | ROE (TTM): -38.23% | Net Debt: $4.48M |
| P/E: N/A | Forward P/E: N/A | EV/EBITDA (TTM): N/A |
2. TON Strategy Co. (TONX): $6.38
On September 3, 2025, the Board of Directors of this crypto treasury company announced that it had approved a new $250 million share repurchase program, equal to around 34% of its market cap at announcement.
| Market Cap: $426.27M | Avg. Daily Volume (30 days): 1,025,839 | Revenue (TTM): $4.28M |
| Net Income Margin (TTM):-235.87% | ROE (TTM): -59.19% | Net Cash: $9.19M |
| P/E: N/A | Forward P/E: N/A | EV/EBITDA (TTM): N/A |
3. DeFi Development Corp. (DFDV): $15.25
On September 24, 2025, the Board of Directors of this data and software subscriptions provider and crypto treasury company announced that it had approved an additional $99 million share repurchase agreement. This represents around 30% of its market cap at announcement.
| Market Cap: $411.75M | Avg. Daily Volume (30 days): 2,732,251 | Revenue (TTM): $3.52M |
| Net Income Margin (TTM): 389.02% | ROE (TTM): 32.66% | Net Debt: $18.62M |
| P/E: 13.47 | Forward P/E: N/A | EV/EBITDA (TTM): 27.53 |
4. BTCS Inc. (BTCS): $5.8
On September 8, 2025, the Board of Directors of this crypto treasury company authorized a new $50 million share repurchase program, equal to around 25% of its market cap at announcement.
| Market Cap: $280.15M | Avg. Daily Volume (30 days): 8,995,003 | Revenue (TTM):$7.52M |
| Net Income Margin (TTM): N/A | ROE (TTM): -72.86% | Net Debt: $8.16M |
| P/E: N/A | Forward P/E: N/A | EV/EBITDA (TTM): N/A |
5. Dropbox, Inc. (DBX): $29.11
On September 9, 2025, the Board of Directors of this content collaboration platform authorized a new $1.5 billion share repurchase program, equal to around 18% of its market cap at announcement.
| Market Cap: $7.92B | Avg. Daily Volume (30 days): 3,412,181 | Revenue (TTM): $2.53B |
| Net Income Margin (TTM):19.16% | ROE (TTM): -52.77% | Net Debt: $2.09B |
| P/E: 18.75 | Forward P/E: 17.01 | EV/EBITDA (TTM): 12.96 |
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