Core Insights - Gartner, Inc. reported a fourth quarter earnings release on February 3, 2026, highlighting an earnings-per-share (EPS) beat but simultaneously revealing a revenue shortfall against consensus expectations [1] - An investigation is underway regarding the presentation of financial metrics in Gartner's earnings communications and SEC filings, focusing on compliance with SEC Regulation G and Item 10(e) of Regulation S-K [1] - Following the earnings release, Gartner's shares dropped over 20%, reaching a new 52-week low below $160, with trading volume significantly increasing [1] Financial Metrics - The company had previously guided investors to expect adjusted EPS of at least $12.65 for 2025, based on 78 million shares and anticipated stock repurchases to offset dilution [1] - Gartner repurchased more than $1 billion of stock during Q3 2025, resulting in a 6% reduction in share count year-over-year [1] - The investigation will assess whether the EPS guidance and share-count assumptions were realistic in light of the company's revenue trends [1]

Core Viewpoint - Gartner, Inc. is currently facing significant challenges in sales and contract value growth, leading to multiple price target reductions by analysts while maintaining a long-term positive outlook for the company [1][2][5]. Group 1: Price Target Adjustments - Truist Securities has lowered its price target for Gartner from $300 to $170 while keeping a Buy rating, citing weaker-than-expected fourth-quarter contract value results and muted 2026 guidance [1]. - BMO Capital has also reduced its price target from $258 to $188, maintaining a Market Perform rating, as Gartner's shares have dropped 27.47% in the past week and 71.55% over the last year [3]. Group 2: Sales Challenges - Gartner's management is experiencing a difficult selling environment for its research and advisory services, with recent changes to its Insights product offering contributing to the reduced price targets [2]. - The company faces challenges in contract value growth due to federal government customer churn and a tough sales environment, despite achieving a margin-driven earnings beat supported by share buybacks [4]. Group 3: Future Outlook - Management has outlined a four-dimensional process to reinvigorate contract value growth, although it may take a couple of years to see full benefits [5]. - Gartner's 2026 guidance is described as "at least" in line but lighter than consensus expectations, with management anticipating an acceleration in contract value growth later in the year [5]. Group 4: Company Overview - Gartner, Inc. operates globally across the United States, Canada, Europe, the Middle East, Africa, and other international markets, conducting business through three segments: Research, Conferences, and Consulting [6].

Group 1 - Baron Partners Fund achieved a return of 19.07% in Q4 2025, significantly outperforming the Russell Midcap Growth Index, which returned -3.70%, and the Russell 3000 Index, which returned 2.40% [1] - For the calendar year 2025, the Fund returned 24.86%, compared to 8.66% for the Russell Midcap Growth Index and 17.15% for the Russell 3000 Index, indicating strong long-term performance [1] - The Fund focuses on long-term investments in a non-diversified portfolio of well-managed growth businesses at attractive prices across various market caps [1] Group 2 - Gartner, Inc. (NYSE:IT) experienced a one-month return of -33.08% and a 52-week decline of 68.88%, with a market capitalization of $12.109 billion as of February 10, 2026 [2] - The decline in Gartner's contract value (CV) growth is attributed to cost-cutting measures in the U.S. public sector, which constitutes about 5% of its revenue [3] - The reduction in contract renewals is viewed as unsustainable, with expectations that many contracts will be reinstated in the coming quarters and years [3]

Following my August 2025 coverage of Gartner Inc. ( IT ), which I downgraded to a hold rating due to my worries about the AI disruption narrative, slowing CV growth, and tariff headwinds, this post isI take a fundamentals-based approach to value investing.I disagree with the common misconception held by many investors that low multiple stocks must be cheap. I look for companies that offer the best long-term durability at the most affordable prices. Consequently, I have a propensity to be drawn to companies ...

Core Viewpoint - The article discusses the author's downgrade of Gartner Inc. to a hold rating due to concerns about AI disruption, slowing CV growth, and tariff headwinds, emphasizing a fundamentals-based approach to value investing [1]. Group 1: Investment Philosophy - The company adopts a fundamentals-based approach to value investing, focusing on long-term durability and affordability rather than merely low multiples [1]. - There is a common misconception among investors that low multiple stocks are inherently cheap, which the company disagrees with [1]. - The company seeks firms with steady long-term growth, no cyclicality, and a robust balance sheet, indicating a preference for stability in investments [1]. Group 2: Investment Risks - Investing in successful companies carries risks, particularly the risk of overpaying, highlighting the importance of valuation [1]. - Despite the risks, there are scenarios where the potential for growth is so significant that immediate price considerations become less critical [1].

Core Viewpoint - Levi & Korsinsky has initiated an investigation into Gartner, Inc. regarding potential violations of federal securities laws following disappointing earnings results and guidance [1][3]. Financial Performance - Gartner's fourth quarter earnings release on February 3, 2026, highlighted an earnings-per-share (EPS) beat against analyst estimates, but revenue fell short of consensus expectations [3]. - The company provided a full-year 2026 outlook indicating a year-over-year revenue decline, raising concerns about the transparency of its financial communications [3]. Shareholder Impact - Following the earnings release, Gartner's shares dropped over 20%, reaching a new 52-week low below $160, with trading volume significantly exceeding normal levels [5]. - The investigation will assess the prominence given to adjusted EPS and revenue metrics in Gartner's communications, particularly in light of the company's prior guidance of at least $12.65 EPS for 2025 [4][3]. Stock Buyback and Assumptions - Gartner repurchased over $1 billion in stock during Q3 2025, reducing its share count by 6% year-over-year, which raises questions about the realism of its EPS guidance and share-count assumptions given the revenue trends [4].

Core Viewpoint - The Tech sector has emerged as a significant driver of aggregate earnings growth since Q2 2023, reversing a previous trend of decline that lasted for about six quarters starting in Q1 2022 [2][3] Group 1: Tech Sector Performance - The Tech sector has shown impressive earnings growth and a favorable estimates revision trend, contributing positively to stock market momentum [2][3] - Despite the overall positive outlook, certain segments, particularly software stocks, have faced challenges in the market [3][4] - Gartner's recent quarterly results highlight the struggles within the sector, as it reported better-than-expected EPS and revenue but provided disappointing guidance, leading to a 71% decline in its stock over the past year [4][5] Group 2: Earnings Trends and Estimates - The Q4 earnings season indicates a steadily improving earnings outlook, with total earnings for 236 S&P 500 members up 12.6% year-over-year, driven by an 8.2% increase in revenues [7] - For the Tech sector specifically, earnings are up 16.6% year-over-year, with 92.7% of companies beating EPS estimates and 90.2% beating revenue estimates, marking a notable improvement compared to previous periods [7][9] - The Tech sector is projected to contribute 36.7% of the S&P 500 index's total earnings over the next four quarters and currently represents 42.4% of the index's total market capitalization [16]

Core Insights - By 2026, companies will find themselves in a "strategic buffer zone" between the ideals and realities of AI, facing significant challenges in transformation, including rapid layoffs outpacing productivity gains and cultural misalignment [1][3] Group 1: AI and Workforce Dynamics - AI-driven layoffs are occurring faster than productivity improvements, with only 2% of AI investments yielding transformative value and 20% providing quantifiable returns [3][4] - Companies are making workforce decisions based on overly optimistic expectations of AI returns, leading to potential difficulties in re-hiring laid-off employees if productivity gains do not materialize [4] - The evolving employment relationship is being influenced by rapid technological advancements, economic fluctuations, and political uncertainties [3] Group 2: Cultural and Psychological Impacts - Cultural misalignment is hindering organizations from achieving performance goals, as employees perceive a disconnect between stated cultural values and their actual experiences [5] - The psychological health of employees is at risk due to the pervasive use of generative AI, with many organizations neglecting to assess the behavioral side effects of AI usage [6] - The phenomenon of "work garbage," or low-quality outputs generated by AI, is becoming a significant drain on productivity, with employees spending considerable time rectifying these issues [7] Group 3: Recruitment and Internal Risks - The recruitment process is increasingly automated, leading to a trust crisis among job seekers, with only half believing in the authenticity of job postings [9] - The rise of AI in recruitment has increased the risk of internal threats, particularly in the form of corporate espionage, with a significant rise in incidents involving deepfake technology [10][11] Group 4: Skills and Process Optimization - A shift towards retraining and apprenticeship programs is expected, helping digital workers transition to skilled trades that are less susceptible to automation [12] - Companies are advised to focus on hiring process architects who can creatively redesign business processes rather than solely seeking technical AI talent [13] Group 5: Digital Twins and Employee Rights - The emergence of digital twins and AI-generated representations of employees raises new questions about employee rights and compensation for the use of their digital likenesses [14] - Organizations are encouraged to establish governance frameworks to protect employee rights related to their digital identities and ensure compliance with evolving regulations [14]

Core Insights - Gartner, Inc. reported disappointing growth and guidance, resulting in a 21% drop in share price for the day [1] Company Performance - The company has shown a lack of growth in its recent quarter, which has raised concerns among investors [1] Investment Perspective - The analysis suggests a long-term investment horizon of 5-10 years, emphasizing a portfolio mix of growth, value, and dividend-paying stocks, with a focus on value [1]

Core Insights - Gartner, Inc. reported disappointing growth and guidance, resulting in a 21% drop in share price for the day [1] Company Performance - The company has shown a lack of growth in its recent quarter, prompting concerns among investors [1] Investment Perspective - The analysis suggests a long-term investment horizon of 5-10 years, emphasizing a portfolio mix of growth, value, and dividend-paying stocks, with a focus on value [1]