Gartner Shares Sink to 52-Week Low After Q4 Revenue and 2026 Outlook Misses [Accessibility Statement] Skip NavigationNYSE: ITNEW YORK, Feb. 18, 2026 /PRNewswire/ -- Levi & Korsinsky, LLP is investigating Gartner, Inc. (NYSE: IT) following the company's fourth quarter 2025 earnings release that sent shares to their lowest level in a year. [Investors who purchased Gartner stock and experienced losses may click here for more information.]According to data compiled from Yahoo Finance, Investing.com, GuruFocus, ...

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 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 Viewpoint - The stock market is expected to achieve another double-digit percentage gain in 2025, with the S&P 500 index showing a year-to-date gain of 16.81% as of December 5, despite significant declines in several individual stocks [1]. Group 1: Worst-Performing Stocks - Fiserv (FISV) has seen a decline of approximately 70%, attributed to a drastic cut in its full-year revenue forecast and slowing growth in its merchant-services segment [3]. - The Trade Desk (TTD) is down approximately 67%, facing decreased revenues due to competition from major players like Amazon, leading investors to view the stock as overvalued [4]. - Deckers Outdoor (DECK) has dropped around 57%, with slowing growth expectations and pressure on discretionary consumer spending impacting its well-known brands, UGG and Hoka [5]. - Gartner (IT) is down approximately 52%, with its valuation at $17 billion, facing cyclical pressure as companies reduce spending on advisory services during economic uncertainty [6].

Core Insights - The year 2026 is anticipated to be a balancing act between spending and cost-cutting, as indicated by a recent survey of CFOs [1][2] Group 1: Cost Optimization - 56% of CFOs identified "achieving enterprise-wide cost optimization targets" as a top priority for the next six months [2] - True cost optimization involves redeploying savings from cost cuts into growth initiatives rather than merely reducing expenses [4] - The emphasis on cost optimization carries risks, as unsustainable cuts can negatively affect stock prices, leading to skepticism from investors [5] Group 2: Growth Opportunities - 47% of CFOs ranked "allocating capital to new growth opportunities" among their top five urgent action items [2] - There is a tension between cost management and growth goals, with expectations for CFOs to maintain cost optimization efforts while pursuing growth [3] Group 3: Financial Forecasting - 51% of CFOs plan to focus on "improving financial forecast accuracy and quality" as a key action item in the coming months [5] Group 4: Artificial Intelligence - 39% of CFOs included "accelerating AI use in the finance function" in their top five action items, while 33% prioritized "driving enterprise AI investment impact" [6] - Confidence in achieving meaningful AI outcomes is low, with only 36% of CFOs feeling assured about the potential impact of AI initiatives [6]

Core Insights - Gartner, Inc. is a large-cap company with a market capitalization of approximately $16.7 billion, providing research, data, and advisory support across various industries [2] - The stock has faced significant challenges, trading about 60.3% below its February high of $584.01, with a 52-week decline of 55.6% and a year-to-date drop of 52.1% [3][4] Financial Performance - In Q3 fiscal 2025, Gartner reported revenue of $1.52 billion, a year-over-year increase of 2.7%, meeting analyst expectations [6] - Adjusted EPS rose by 10.4% to $2.76, surpassing forecasts of $2.43 [6] - The company announced a $1 billion stock repurchase, reducing the share count by 6% year-over-year [7] Future Guidance - Gartner raised its full-year guidance, projecting Insights revenue of at least $5.06 billion, Conferences revenue of $630 million, and Consulting revenue of $575 million [7] - Full-year EBITDA is now expected to be a minimum of $1.575 billion, an increase of $60 million from prior guidance, with margins lifted to 24.3% [8] - Adjusted EPS for 2025 is anticipated to reach $12.65, indicating confidence in sustainable growth and profitability [8] Market Position - Despite recent stock performance challenges, Gartner's stock saw a nearly 4.4% increase on November 5, following the positive earnings report [6] - Technical indicators show that the stock has been trading below its 50-day and 200-day moving averages, indicating a bearish trend [5]

Core Insights - Finance leaders are increasingly confident about the role of artificial intelligence (AI) in their work, despite a stable adoption rate over the past year [1][2]. AI Adoption in Finance - According to Gartner's 2025 AI in Finance Survey, 59% of CFOs and senior finance leaders report that their teams use AI, a slight increase from 58% in the previous year [2]. - The adoption rate of AI in finance organizations was 37% in 2023, which more than doubled to 58% in 2024, but has now plateaued [3]. Confidence in AI - Over two-thirds (67%) of finance leaders express greater optimism about AI in 2025 compared to 2024, with the highest optimism among organizations further along in their AI adoption journey [4]. - Among advanced adopters, 23% feel "much more optimistic" about AI this year, while only 7% of early-stage adopters share this sentiment [4]. Practical Challenges and Experience - The slowdown in AI adoption is attributed to finance leaders facing practical challenges related to implementation, integration, and scaling [3]. - As teams gain hands-on experience with AI, the benefits become clearer, leading to increased reliability and quicker gains once production use begins [5]. Transition from Experimentation to Operational Use - It is crucial for finance leaders to transition from experimentation to real operational use of AI to realize its full potential [6].

Core Points - Gartner, Inc. announced the pricing of its registered public offering of $800 million aggregate principal amount of senior notes [1] - The offering consists of $350 million principal amount of 4.950% Senior Notes due 2031 and $450 million principal amount of 5.600% Senior Notes due 2035 [1] - The 2031 Notes were priced at an issue price of 99.970% and the 2035 Notes were priced at an issue price not specified in the excerpt [1]

Q3 2025 Financial Performance - Global Contract Value (CV) increased by 30% to $50 billion[13] - Consolidated Revenues grew by 27% to $15 billion[13] Foreign Exchange (FX) neutral growth was 12%[13] Contribution Margin was 689%[13] - Insights Revenues increased by 51% to $13 billion[13] FX Neutral growth was 36%[13] Contribution Margin reached 767%[13] - Conference Revenues decreased by 16% to $75 million[13] FX Neutral decrease was 41%[13] Contribution Margin was 366%[13] - Consulting Revenues decreased by 32% to $124 million[13] FX Neutral decrease was 48%[13] Contribution Margin was 285%[13] - Adjusted EBITDA increased by 19% to $347 million[13] FX Neutral growth was -08%[13] Adjusted EBITDA Margin was 228%[13] - Adjusted EPS grew by 104% to $276[13] - Free Cash Flow was $269 million[13] Updated 2025 Guidance - Consolidated Revenues are projected to be at least $6475 billion[13] - Adjusted EBITDA is expected to be at least $1575 billion[13] - Adjusted EPS is projected to be at least $1265[13] - Free Cash Flow is expected to be at least $1145 billion[13] Capital Allocation - Share repurchases amounted to $11 billion[13] - Approximately $13 billion remains authorized for repurchase as of September 30, 2025[39]

Core Perspective - Gartner (IT) stock is expanding, generating cash, and is currently undervalued compared to its historical highs [1] Financial Performance - Gartner has a free cash flow yield of 7.6%, indicating strong cash generation capabilities [5] - The company experienced a revenue growth of 5.9% over the last 12 months, suggesting an increase in cash reserves [5] - The stock is trading at a significant valuation discount, currently 34% lower than its 3-month high, 52% below its 1-year high, and 52% below its 2-year high [5] Investment Strategy - The average forward returns for Gartner's stock are projected at 25.7% for 6 months and 57.9% for 12 months, with a win rate of over 70% for both periods [6]