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Today we're going to take a look at the well-established Gartner, Inc. (NYSE:IT). The company's stock received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$548 at one point, and dropping to the lows of US$378. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Gartner's current trading price of US$406 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Gartner’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Is Gartner Still Cheap?
According to our valuation model, Gartner seems to be fairly priced at around 16.07% above our intrinsic value, which means if you buy Gartner today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $350.21, then there isn’t really any room for the share price grow beyond what it’s currently trading. Is there another opportunity to buy low in the future? Since Gartner’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Check out our latest analysis for Gartner
Can we expect growth from Gartner?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of Gartner, it is expected to deliver a negative earnings growth of -13%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What This Means For You
Are you a shareholder? Currently, IT appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.