Why Gartner Stock Fell 31% This Morning

Financial Performance - Gartner's Q4 2025 revenue increased by 2% year over year, reaching $1.75 billion, aligning with analyst expectations [2] - Adjusted earnings for Q4 2025 fell by 28% to $3.94 per diluted share, surpassing the Street's forecast of $3.51 per share [2] Future Projections - Management anticipates 2026 sales of at least $6.46 billion, which is 0.6% lower than the full-year 2025 results [3] - Adjusted earnings are projected at $12.30 per share for 2026, representing a 6.6% decline from the $13.17 per share earned in 2025 [3] - Analyst consensus estimates for full-year 2026 earnings are approximately $13.48 per share on revenues near $6.7 billion [3] Stock Performance and Valuation - Gartner's stock has decreased by 71% over the past 52 weeks, trading at low valuation ratios of 13.8 times trailing earnings and 9.3 times free cash flow [5] - The percentage of Gartner shares on loan to short-sellers is increasing, indicating a rising trend among short-sellers despite the stock's decline [5] Market Conditions - The demand for business advice is challenging in the current economic climate, with clients having access to artificial intelligence tools [6] - Gartner needs to demonstrate its value through enhanced services amidst macroeconomic challenges, which may require time to adjust its marketing strategy [6]