Gartner Jumps 39.3% in Past Month. Can Its Strong Rally Keep Running?

Gartner, Inc. IT shares have jumped 39.3% in the past month, sharpening the question of whether improving operating trends can support further gains. The Zacks Consensus Estimate for current-fiscal-year earnings has moved 3.9% higher over the past four weeks.

Recent earnings strength, firmer contract-value growth and better profitability are encouraging. Still, uneven revenue performance, consulting weakness and liquidity concerns keep the setup from becoming one-sided.

Gartner’s Earnings Momentum Supports the Rally

Gartner reported second-quarter 2026 adjusted earnings of $4.37 per share, up 23.8% year over year.

                                                                  Image Source: Zacks Investment Research

The figure topped the Zacks Consensus Estimate of $3.77 by 15.9%, extending the company’s recent earnings momentum.

Gartner, Inc. Price, Consensus and EPS Surprise

Gartner, Inc. price-consensus-eps-surprise-chart | Gartner, Inc. Quote

Higher operating profit and a much lower share count supported the per-share improvement. Operating income rose 15.7% to $378.5 million, while diluted shares declined to 66.6 million from 77.4 million a year earlier.

IT’s Contract Value Shows Signs of Stabilization

Global contract value reached $5.28 billion, increasing 1.7% year over year and 0.3% sequentially on a foreign-currency-neutral basis. The year-over-year pace improved from 1% in the first quarter, pointing to a gradual stabilization in subscription demand.

Global wallet retention improved to 98.2% from 97.7% in the prior quarter. Contract value per enterprise rose to $414,000 from $376,000 a year earlier, helping offset a 4.5% decline in client enterprises to 12,775.

Gartner’s Profitability Is Improving Faster Than Sales

Adjusted EBITDA excluding the divested operation increased 6.4% year over year to $466 million. Its margin expanded 90 basis points to 27.8%, while adjusted revenues rose a more modest 2.8%.

Cash generation also strengthened. Free cash flow increased 8.9% to $378 million as capital expenditures declined to $20 million from $36 million, giving Gartner another source of support even as top-line growth remains restrained.

IT Still Faces Growth and Liquidity Questions

Consulting revenues declined 8.8% year over year to $142 million, making the segment a clear weak spot. Competition, higher talent costs and foreign-exchange exposure also remain risks, while Gartner’s current ratio of 0.88 trails the industry average of 1.15.

Huron Consulting Group Inc. HURN is one of the consulting-services peers tracked alongside Gartner, underscoring the competitive comparison investors face in the sector. Equifax Inc. EFX is another peer in that comparison set, reinforcing the need for Gartner to maintain differentiation across its research, advisory and consulting offerings.

Gartner’s Strong Signals Back a Constructive View

The 38.4% one-month advance has already reset expectations higher, so continued earnings delivery, contract-value stabilization and margin discipline will matter if the rally is to endure. Gartner’s stronger cash flow provides support, but consulting softness and liquidity constraints remain meaningful offsets.

The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

It holds a VGM Score of A and a Value Score of A. Its Growth Score of B and Momentum Score of B are also favorable. Zacks Style Scores are designed to complement the Zacks Rank, and A or B scores alongside a top Rank support a constructive near-term view without eliminating company-specific execution risks.

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This article originally published on Zacks Investment Research (zacks.com).

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