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Gartner, Inc. (IT) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Gartner, Inc. (IT)

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Intrinsic Value (DCF)

Current$230.38
→
Intrinsic$611.64
+165%
$412.49$611.64$989.47
Market implies 1% growth for 5 years
DCF analysis suggests IT could have 165% upside at 25% growth — verify assumptions match your view.
At $230, the market prices in only 1% growth — below historical 25%, suggesting low expectations.
Range: Bear $412 → Bull $989. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →21%23%25%27%
8%$755$817$883$953
10%$525$567$612$659
12%$397$428$462$497
14%$316$341$367$395

Bull Case

  • Bull case ($989) offers 329% upside at 30% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (1%) ≤ historical CAGR (25%)

Bear Case

  • Bear case ($412) with 20% growth, 12% discount rate
  • Using 25% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$1.73B
Year 2$2.16B
Year 3$2.70B
Year 4$3.38B
Year 5$4.22B
Terminal$62.11B

📐 Model Inputs

Growth Rate25.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$1.38BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is IT stock undervalued or overvalued?
🟢 UNDERVALUED

IT trades at $230.38 vs. our DCF-derived intrinsic value of $504.55, implying +106% upside. At a 10.0% WACC and 25.0% projected FCF growth, the market appears to be underpricing the present value of IT's future cash flows. The bear case ($326.69) still suggests upside, providing margin of safety.

What is IT's intrinsic value?

Using a 5-year DCF model: Base FCF of $1.38B, projected at 25.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $967M net debt and dividing by 0.08B shares: Bear $326.69 | Base $504.55 | Bull $766.48. Current price $230.38 implies +106% to base case.

How is IT's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 25.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($40.49B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.