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Gartner (IT) Gains From Domain Expertise Amid Talent Cost

Gartner, Inc. IT is currently benefiting from a large and diverse addressable market with low customer concentration that mitigates operating risks.

The company recently reported better-than-expected fourth-quarter 2023 results.Adjusted earnings per share of $3.04 beat the Zacks Consensus Estimate by 9.4% but decreased 18% from the year-ago reported figure. Revenues of $1.6 billion beat the consensus estimate by 0.6% and improved 5% year over year.

How is Gartner Doing?

Over the years, Gartner research reports have become indispensable tools for diverse companies across different sectors, strengthening its leading position in the market. Using advanced technologies to collect and analyze troves of data, Gartner draws on unique data assets and deep domain expertise to provide key insights and decision-support solutions for an informed decision-making process. These insights are typically drawn from a critical fact base, collated from interactions with clients in around 15,000 distinct organizations worldwide.

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Gartner has a large and diverse addressable market with low customer concentration that mitigates operating risks. Operating in an industry with low barriers to entry, Gartner has an integrated research and consulting team designed to best serve client needs. This enables it to have a competitive advantage against its rivals. Leveraging the breadth and depth of its intellectual capital, Gartner creates and distributes proprietary research content as broadly as possible via published reports, interactive tools, facilitated peer networking, briefings, consulting and advisory services, and events. These facilitate a steadily improving revenue stream for the company.

Gartner's endeavor to reward its shareholders in the form of share repurchases is appreciable. In 2023, 2022 and 2021, Gartner repurchased 3.9 million, 3.8 million and 7.3 million shares for $600 million, $1 billion and $1.7 billion, respectively. Such moves indicate the company’s commitment to create value for shareholders and underline its confidence in business.

Higher talent costs due to a competitive talent market are hurting consulting services companies like Gartner. The industry is labor-intensive and heavily dependent on foreign talent. Moreover, while advancements in automation and AI offer massive opportunities to the industry, these technologies enable clients to comprehend and integrate new methods to improve performance, thereby creating uncertainty for consulting services firms.

Recent Performance of Other Consulting Firms

Gartner belongs to the Zacks Consulting Services industry. Here’s how a couple of stocks from the same space performed this earnings season:

Accenture plc ACN reported mixed second-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same.

Quarterly earnings of $2.8 per share surpassed the Zacks Consensus Estimate by 4.1% and improved 3% from the year-ago quarter. Total revenues of $15.8 billion missed the consensus estimate marginally and declined slightly from the year-ago quarter.

FTI Consulting, Inc. FCN reported better-than-expected fourth-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate.

Quarterly earnings per share of $2.28 surpassed the Zacks Consensus Estimate by 45.2% and increased 50% on a year-over-year basis. Total revenues of $924.7 million beat the consensus mark by 11.5% and increased 19.4% from the year-ago quarter.

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Accenture PLC (ACN) : Free Stock Analysis Report

FTI Consulting, Inc. (FCN) : Free Stock Analysis Report

Gartner, Inc. (IT) : Free Stock Analysis Report

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Zacks Investment Research