Gartner sinks about 13% even after a third-quarter beat and higher full-year targets

Gartner shares fell sharply on Tuesday even though the research and advisory company beat profit forecasts and raised its full-year targets, as investors focused on how slowly its core subscription business is growing.

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Adjusted earnings came in at $3.59 a share, up 30.1% from a year earlier and well ahead of the $2.84 analysts expected, according to Investing.com. Revenue was $1.505 billion, down 1.3% as reported, against forecasts of $1.49 billion. Contract value, the measure investors watch most closely, reached $5.3 billion, up 2.5% from a year earlier and 1.1% from the prior quarter, the company said.

Gartner raised its 2026 outlook and now expects revenue of at least $6.405 billion and adjusted earnings of at least $14.65 a share. On the earnings call, management said contract value growth should keep improving through year-end but stopped short of promising a 4% exit rate outside the U.S. federal business. The company also said its annual price increase was about 3%, near the low end of its usual range. Barron's reported the stock was the worst performer in the S&P 500 during the session.

The stock was trading at $204.67 as of 1:13 p.m. ET on the New York Stock Exchange, down $30.59, or 13.00%, from Monday's regular-session price of $235.26, according to Nasdaq.com quote data. Prices can keep moving through the session.