In a year marked by economic uncertainty and fluctuating demand for enterprise services, Gartner (NYSE: IT) has emerged as a standout performer. The company’s Q2 2023 results, released in a volatile market environment, underscore its ability to maintain disciplined growth, healthy margins, and robust cash flow—key attributes for long-term investors. As we approach the end of 2025, Gartner’s strategic positioning and undervalued stock make it an attractive opportunity for those seeking resilience and upside in the enterprise research and advisory sector.
Q2 2023 Performance: A Blueprint for Resilience
Gartner’s Q2 2023 results demonstrated its ability to navigate macroeconomic headwinds while outperforming peers. The company reported $1.503 billion in revenue, a 9.2% year-over-year increase (10.0% FX-neutral), driven by strong performance across all segments. Notably, the Conferences segment surged by 48.8%, reflecting pent-up demand for in-person collaboration post-pandemic, while the Research segment grew by 5.7%, highlighting the enduring value of Gartner’s data-driven insights.
Despite a slight decline in GAAP net income (down 3.4% to $198 million) and diluted EPS (down 2.0% to $2.48), non-GAAP metrics told a different story. Adjusted EBITDA of $384 million (down 1.2% YoY) and free cash flow of $410 million (up 4.0% YoY) showcased Gartner’s operational efficiency and disciplined cost management. These figures outperformed peers like Kyndryl, which reported a net loss of $281 million for the same period, and even outpaced Amdocs’ 6.8% revenue growth in constant currency, albeit in a different market niche.
Consistent Cash Flow and Strategic Shareholder Returns
One of Gartner’s most compelling strengths is its consistent free cash flow generation, which reached $410 million in Q2 2023. This allowed the company to fund a $132 million share repurchase program and maintain a healthy balance sheet with no debt. For context, Kyndryl’s free cash flow for the first half of 2023 was only $184 million, and Amdocs, while profitable, allocated a smaller portion of its cash flow to shareholder returns.
Gartner’s commitment to returning value is evident in its $132 million in share repurchases during Q2 and a $0.435 per share quarterly dividend (announced in Q2 2023, paid in July 2023). These actions reinforce investor confidence, particularly in a market where many peers are cutting dividends or delaying capital returns.
Strategic Positioning in the Enterprise Research Sector
Gartner’s dominance in the enterprise research and advisory sector is underpinned by its $4.6 billion total contract value (TCV) in Q2 2023, up 8.9% YoY. This includes $3.5 billion in Global Technology Sales Contract Value (GTS CV) and $1.0 billion in Global Business Sales Contract Value (GBS CV), both growing at double-digit rates. These metrics signal strong demand for Gartner’s services, particularly in areas like digital transformation, cloud strategy, and AI-driven analytics—sectors expected to expand significantly in 2025.
The company’s strategic focus on recurring revenue streams and high-margin consulting services further insulates it from market volatility. For instance, the Research segment (59% of revenue in 2023 for Amdocs, a key peer) and Consulting segment (4.8% growth in Q2 2023 for Gartner) reflect a diversified revenue model that balances long-term contracts with advisory work. This contrasts with Kyndryl’s reliance on large-scale infrastructure contracts, which exposed it to currency and cost pressures in 2023.
Undervaluation and Long-Term Potential
Despite its strong performance, Gartner remains undervalued relative to its peers and fundamentals. As of August 2025, the stock trades at a P/E ratio of 22, below the S&P 500 average of 25 and well under Amdocs’ P/E of 28. This discount is unjustified, given Gartner’s 9.2% revenue growth, 17.8% non-GAAP operating margin, and $410 million in free cash flow—all of which outperform industry benchmarks.
Moreover, Gartner’s raised 2023 guidance for adjusted EBITDA, free cash flow, and EPS signals confidence in its ability to capitalize on emerging trends. The company is well-positioned to benefit from accelerated digital transformation and AI adoption in 2025, areas where its research and advisory services are in high demand.
Investment Thesis: A Strategic Buy for 2025
For long-term investors, Gartner offers a compelling combination of resilient cash flow, healthy margins, and strategic relevance in a high-growth sector. Its ability to outperform peers like Kyndryl and Amdocs in volatile markets, coupled with a disciplined approach to capital allocation, makes it a defensive yet growth-oriented play.
Key catalysts for upside in 2025 include:
1. Continued growth in Gartner’s Conferences and Consulting segments, driven by hybrid work trends and AI adoption.
2. Expansion of its AI and analytics offerings, which are expected to capture a larger share of the $400 billion global enterprise research market.
3. Shareholder-friendly initiatives, including share repurchases and dividend increases, which will enhance returns as the company’s stock remains undervalued.
In a market where many tech stocks are overvalued and vulnerable to macroeconomic shifts, Gartner’s balanced approach to growth and capital discipline positions it as a strategic buy for 2025. Investors seeking exposure to the enterprise research sector would be wise to consider adding Gartner to their portfolios—before its next phase of growth is fully priced in.
