Gartner surges on earnings beat, expands buyback program
IT research giant exceeds Q4 expectations by wide margin as CEO forecasts contract value acceleration in 2026
Gartner shares jumped more than 5 percent on Tuesday after the IT research and advisory firm reported fourth-quarter earnings that handily surpassed analyst expectations, bolstered by an expanded share repurchase program and management's optimistic outlook for 2026.
The Stamford, Connecticut-based company delivered adjusted earnings per share of $3.94, crushing the consensus estimate of $2.43 by 62.3 percent, according to quarterly results released before market open. Revenue reached $1.75 billion for the quarter, exceeding the $1.52 billion forecast by 15.3 percent.
The earnings beat propelled Gartner's stock above its 5-day moving average, providing a rare bright spot for shares that had been trading near their 52-week low of $201.78 prior to the announcement. The stock closed the session up 5.04 percent, adding to what had been a challenging 12-month period that saw the company's market valuation decline from a peak above $500 per share in early 2025.
"Our fourth-quarter financial results were ahead of expectations," said Gene Hall, Gartner's chairman and chief executive officer, in a statement accompanying the results. "We expect Contract Value to accelerate throughout 2026."
Gartner's board authorized an additional $500 million for share repurchases, bringing total remaining capacity under the buyback program to approximately $1.25 billion. The company repurchased $2 billion worth of shares in 2025, reducing its outstanding share count by 8 percent—a significant reduction that should boost earnings per share going forward through the mechanics of a smaller denominator.
Contract Value, a key metric measuring Gartner's recurring revenue commitments from clients, reached $5.2 billion in the fourth quarter, growing 1 percent year-over-year on a currency-neutral basis. While modest, this growth represents a foundation for Hall's acceleration thesis heading into 2026.
The earnings beat comes at a pivotal moment for Gartner, which maintains a dominant 35-40 percent market share in syndicated technology research and decision-support subscriptions, according to competitive analysis. The company is actively integrating artificial intelligence capabilities into its services, including tools like 'AskGartner,' as it explores a transformation toward outcome-focused solutions.
Analysts remain cautiously optimistic despite the strong quarter. UBS maintained a "hold" rating but increased its price target to $270 from $256, as reported by Investing.com. The consensus analyst rating stands at "neutral," with an average 12-month price target of $284.18—representing potential upside of approximately 36 percent from current levels.
Gartner's competitive positioning against rivals such as Forrester Research and International Data Corporation (IDC) remains robust, though the company faces ongoing pressure to demonstrate growth in an increasingly digital marketplace. The integration of AI tools and shift toward outcome-based advisory services could help differentiate Gartner's offering and command higher pricing power.
From a valuation perspective, Gartner currently trades at 18.6 times trailing earnings and 15.8 times forward estimates, with a price-to-sales ratio of 2.46. The company's profit margin stands at 13.7 percent, and it has delivered $6.46 billion in revenue over the trailing twelve months.
The $2 billion in share repurchases executed during 2025 represents an aggressive capital return strategy, particularly notable given Gartner does not pay a dividend. By reducing the share count by 8 percent, management has effectively boosted future earnings per share through financial engineering even as revenue growth remains modest.
Investors will be watching closely for evidence of Hall's promised Contract Value acceleration in 2026, as recurring revenue growth remains the primary driver of Gartner's long-term value. The additional $500 million in buyback authorization provides management with continued flexibility to support the stock while the operational turnaround gains momentum.