Is Gartner (NYSE:IT) gain justifiable given newest volatility?

12% of stocks are less risky than Gartner on the basis of their historical return distribution, and some 98% of all equities are expected to be superior in generating returns on investments over the next 60 days. As many adventurous traders are excited about technology space, it is only fair to review the risk of shorting Gartner based on its current volatility spike. We will evaluate if Gartner's current volatility will continue into March. Gartner's very low volatility may have no significant impact on the stock's value as we estimate Gartner as currently undervalued. The real value, based on our calculations, is getting close to 183.01 per share.
Published over a year ago
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Reviewed by Gabriel Shpitalnik

Gartner reports roughly 553.72 M in cash with 725.67 M of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 6.2.
Volatility is a rate at which the price of Gartner or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Gartner may increase or decrease. In other words, similar to Gartner's beta indicator, it measures the risk of Gartner and helps estimate the fluctuations that may happen in a short period of time. So if prices of Gartner fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility. Please read more on our technical analysis page.

How important is Gartner's Liquidity

Gartner financial leverage refers to using borrowed capital as a funding source to finance Gartner ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Gartner financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Gartner's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Gartner's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Gartner's total debt and its cash.

Gartner Gross Profit

Gartner Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Gartner previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Gartner Gross Profit growth over the last 10 years. Please check Gartner's gross profit and other fundamental indicators for more details.

Gartner Volatility Drivers

Gartner unsystematic risk is unique to Gartner and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in Gartner you can also buy Clarivate Plc. You can also mitigate this risk by investing in the information technology sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing Gartner important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in Gartner income statement and balance sheet. Here are more details about Gartner volatility.
0.931.00.990.130.950.31-0.430.940.930.640.20.240.3-0.15-0.09-0.010.76
0.930.930.960.120.930.32-0.170.790.770.42-0.050.360.06-0.45-0.36-0.250.85
1.00.930.980.130.930.34-0.440.950.950.690.260.210.3-0.12-0.070.00.77
0.990.960.980.140.970.3-0.370.90.890.570.130.250.24-0.26-0.2-0.110.78
0.130.120.130.140.07-0.01-0.330.10.140.220.28-0.030.61-0.2-0.32-0.3-0.2
0.950.930.930.970.070.26-0.340.850.830.470.030.350.21-0.25-0.19-0.040.78
0.310.320.340.3-0.010.260.060.270.30.420.21-0.07-0.14-0.130.0-0.150.31
-0.43-0.17-0.44-0.37-0.33-0.340.06-0.59-0.59-0.66-0.630.08-0.93-0.44-0.23-0.430.1
0.940.790.950.90.10.850.27-0.591.00.830.490.010.430.080.090.120.64
0.930.770.950.890.140.830.3-0.591.00.860.53-0.030.450.080.090.10.62
0.640.420.690.570.220.470.42-0.660.830.860.84-0.270.560.320.280.210.27
0.2-0.050.260.130.280.030.21-0.630.490.530.84-0.660.610.430.30.13-0.17
0.240.360.210.25-0.030.35-0.070.080.01-0.03-0.27-0.66-0.1-0.19-0.080.270.33
0.30.060.30.240.610.21-0.14-0.930.430.450.560.61-0.10.380.150.32-0.24
-0.15-0.45-0.12-0.26-0.2-0.25-0.13-0.440.080.080.320.43-0.190.380.950.88-0.31
-0.09-0.36-0.07-0.2-0.32-0.190.0-0.230.090.090.280.3-0.080.150.950.86-0.14
-0.01-0.250.0-0.11-0.3-0.04-0.15-0.430.120.10.210.130.270.320.880.86-0.13
0.760.850.770.78-0.20.780.310.10.640.620.27-0.170.33-0.24-0.31-0.14-0.13
Click cells to compare fundamentals

Detailed Perspective On Gartner

This firm generated the yearly revenue of 4.19 B. Reported Net Income was 214.84 M with gross profit of 2.69 B.
 2018 2019 2020 2021 (projected)
Consolidated Income122.46 M233.29 M268.28 M227.69 M
Direct Expenses1.47 B1.55 B1.4 B1.13 B

Our perspective of the newest Gartner gain

The sortino ratio is down to 0.12 as of today. As of the 9th of February, Gartner retains the Risk Adjusted Performance of 0.1429, market risk adjusted performance of 4.94, and Downside Deviation of 1.46. Gartner technical analysis makes it possible for you to employ historical prices and volume momentum with the intention to determine a pattern that calculates the direction of the firm's future prices. Simply put, you can use this information to find out if the firm will indeed mirror its model of historical price patterns, or the prices will eventually revert. We were able to interpolate nineteen technical drivers for Gartner, which can be compared to its competitors. Please check out Gartner variance, value at risk, as well as the relationship between the Value At Risk and skewness to decide if Gartner is priced fairly, providing market reflects its last-minute price of 168.11 per share. Given that Gartner has jensen alpha of 0.2663, we strongly advise you to confirm Gartner's regular market performance to make sure the company can sustain itself at a future point.

Our Takeaway on Gartner Investment

Whereas many of the other players under the information technology services industry are still a bit expensive, Gartner may offer a potential longer-term growth to private investors. To sum up, as of the 9th of February 2021, our research shows that Gartner is a rather very steady investment opportunity with a low probability of distress in the next two years. From a slightly different view, the entity currently appears to be undervalued. Our actual 30 days recommendation on the firm is Strong Buy.

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Editorial Staff

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