Gartner

“It is very, very infrequent, think less than one percent of the time, that there’s someone that would be called competitive in that deal”. This comment came from the management team of Gartner, the global research and advisory firm, at an analyst day last year in response to a question from an analyst who was trying to get their arms around the competitive environment in the business of providing reports, advice and tools to Heads of Departments across the C-suite. Now, there are very few businesses that have no competition in the deal pitch, but Gartner appears to be one. What is likely to raise the eyebrows even higher, is that it serves a market that management describes as large and underpenetrated. The reason being the market for detailed independent insight, advice and tools to shape key business decisions spans the globe. Across all industries, both private and public. Across pretty much all enterprises, from ten-man bands to Exxon. The market is basically anyone and everyone in business. To put some numbers on it, the total market opportunity – as per the company’s recent deck – is a few contracts shy of $200bn. Of which Gartner currently snaffles about $3bn. This for a company with, essentially, no competition. It’s no wonder analysts talk of a long runway of growth. What investors also like is the revenue. It’s sticky, and recurring. Over 70% is on subscription. Valuation, you mutter. Indeed, valuation is always likely to come in a little full-on-the-plate for a business like this, which is why you need a blip.  A short term wobble. Enter Covid. About 10% of the revenue mix is conferences, must-attend affairs offering crisp insight and oodles of peer networking over butter-glazed vol au vents. 2020’s roster, like many others in the space, has been cancelled. The offer has pivoted to the virtual, but revenues have been smacked. There have also been problems in a new division, but management appeared to have moved quickly to iron out the creases in the linen. These short-term issues offer a side door into a stock that allows customers to focus on what matters, via access to Gartner’s trusted analysts, strategic advice and practical tools. In times of disruption, like a global pandemic, such services are likely to be in thick demand.