Diamond Hill Capital Management, LLC on Gartner, Inc.
Thesis
Diamond Hill initiated Gartner after slowing growth and worries about AI disruption reduced the stock’s valuation. The manager believes clients continue to derive significant value from a Gartner license even as AI changes how information is obtained and used. It considers the market too pessimistic about the company’s intermediate-term growth potential. The investment is explicitly based on the balance of competitive risks and opportunities at an attractive entry valuation.
“the market is underestimating the value of a Gartner license and the company’s intermediate-term growth trajectory.”
Key risks
- Revenue growth has been slowing
- AI may disrupt the value of Gartner research and advisory products
- The expected intermediate-term growth recovery may fail to emerge