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Is Gartner Inc (IT) Stock Trading Below Fair Value?

Friday, February 23, 2024 03:28 PM | InvestorsObserver Analysts

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Is Gartner Inc (IT) Stock Trading Below Fair Value?

Gartner Inc (IT) receives a weak valuation ranking of 14 from InvestorsObserver data analysis. The proprietary ranking system focuses on the underlying health of a company through analysis of its stock price, earnings, and growth rate. IT has a better value than 14% of stocks based on these valuation analytics. Investors primarily focused on buy-and-hold strategies will find the valuation ranking relevant to their goals when making investment decisions.

Valuation Rank - 14
IT gets a 14 Valuation Rank today. Find out what this means to you and get the rest of the rankings on IT!

Metrics Analysis

IT has a trailing twelve month Price to Earnings (PE) ratio of 39.06. The historical average of roughly 15 shows a poor value for IT stock as investors are paying higher share prices relative to the company's earnings. IT's high trailing PE ratio shows that the firm has been trading above its fair market value recently. Its trailing 12-month earnings per share (EPS) of 11.53 does not justify the stock's current price. However, trailing PE ratios do not factor in the company's projected growth rate, resulting in many newer firms having high PE ratios due to high growth potential enticing investors despite inadequate earnings.
IT has a 12 month forward PE to Growth (PEG) ratio of 4.06. Markets are overvaluing IT in relation to its projected growth as its PEG ratio is currently above the fair market value of 1. 11.53's PEG comes from its forward price to earnings ratio being divided by its growth rate. PEG ratios are one of the most used valuation metrics due to its incorporation of more company fundamentals metrics and a focus on the firm's future rather than its past.

Summary

IT' has a weak valuation at its current share price on account of a overvalued PEG ratio due to strong growth. IT's PE and PEG are worse than the market average leading to a below average valuation score. Click Here to get the full Report on Gartner Inc (IT) stock.

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