Gartner, Inc. IT stock has rallied 41% over the past three months, significantly outperforming the industry’s 16.8% growth and the Zacks S&P 500 Composite's 5.2% return.
IT Three-Month Share Price Performance
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Let us delve deeper into the factors that have contributed to the company’s outperformance.
Rising Demand for AI-Related Advisory
Gartner is benefiting from rising demand for AI-related guidance across chief information officers, human resources, sales, marketing and other enterprise functions. Insights revenues increased 2.1% year over year, or 1% on a foreign-currency-neutral basis, to $1.29 billion, while contribution rose 4% to $999 million. The contribution margin expanded 150 basis points to 77.5%, highlighting the scalability of its subscription-based research model.
Conference revenues grew 15.5%, or 14.2% on a foreign-currency-neutral basis, to $244 million, with contributions up 19.6% to $145 million and margin expanding 210 basis points to 59.5%. As enterprises shift spending toward AI strategy, cybersecurity, implementation and return on investment, Gartner should benefit from deeper client engagement and higher demand for its research and advisory services. This backdrop remains supportive of revenue growth and further operating leverage.
Contract Value Growth & Retention Support Expansion
IT’s total contract value (CV) grew 2% year over year in the second quarter of 2026, accelerating 70 basis points sequentially, while ex-U.S. federal CV increased 3.3%. Global CV reached $5.28 billion, up 1.7% year over year and 0.3% sequentially on a foreign-currency-neutral basis, pointing to gradually stabilizing subscription demand. Global Business Sales CV rose 3.3% year over year and 1.2% sequentially to $1.28 billion. Global wallet retention improved to 98.2% from 97.7% in the prior quarter, while client retention increased to 85.2% from 85% sequentially and 84.6% a year earlier. Contract value per enterprise advanced to $414,000 from $376,000. Improving retention and higher spend per client should create more opportunities for account expansion, license growth and new business, supporting further contract value acceleration over time.
Profitability & Cash Flow Support Financial Flexibility
Gartner’s adjusted EBITDA, excluding the divested operation, increased 6.4% year over year or 4.4% on a foreign-currency-neutral basis, to $466 million in the second quarter of 2026. The adjusted EBITDA margin expanded 90 basis points to 27.8%. GAAP operating income rose 15.7% to $378.5 million, with the operating margin improving to 22.6% from 19.4%, aided by lower service, product development and administrative expenses. Net income increased 14.4% to $275.5 million, while EPS climbed 33.1% to $4.14, supported by a lower share count. Operating cash flow grew 3.8% to $398 million and free cash flow advanced 8.9% to $378 million. Margin expansion, earnings growth and healthy cash generation collectively strengthen Gartner’s financial flexibility and support continued shareholder returns.
IT’s Zacks Rank & Stocks to Consider
Gartner currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A couple of better-ranked stocks in the broader Business Services sector are CBIZ, Inc. CBZ and TrueBlue, Inc. TBI.
CBIZ holds a Zacks Rank of 2 (Buy) at present. It has a long-term earnings growth expectation of 10%.
CBZ beat earnings estimates in three of the last four quarters and missed once, with an average earnings surprise of 8.9%.
TrueBlue carries a Zacks Rank #2 at present. It has a long-term earnings growth expectation of 14%.
TBI beat earnings estimates in three of the last four reported quarters and missed once, with an average earnings surprise of 22.4%.
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Gartner, Inc. (IT): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).