Capgemini (CGEMY) AI Stock Analysis

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Capgemini

(OTC:CGEMY)

Rating:62Neutral

Price Target:

$30.00

▲(3.59% Upside)

Capgemini's overall stock score reflects stable financial performance and reasonable valuation, but is tempered by bearish technical indicators and mixed earnings call results. The company's strong bookings and strategic wins are positive, but challenges in profitability and sector-specific weaknesses weigh on the score.

Capgemini (CGEMY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$24.37B

Dividend Yield2.62%

Average Volume (3M)38.62K

Price to Earnings (P/E)14.3

Beta (1Y)0.97

Revenue Growth-0.20%

EPS Growth-6.50%

CountryUS

Employees341,118

SectorTechnology

Sector Strength86

IndustryInformation Technology Services

Share Statistics

EPS (TTM)1.38

Shares Outstanding856,737,370

10 Day Avg. Volume42,335

30 Day Avg. Volume38,622

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

P/FCF RatioN/A

Enterprise Value/Market Cap1.41

Enterprise Value/Revenue1.56

Enterprise Value/Gross Profit5.68

Enterprise Value/Ebitda10.62

Forecast

1Y Price Target

$30.00

Price Target Upside3.59% Upside

Rating ConsensusHold

Number of Analyst Covering1

Capgemini Business Overview & Revenue Model

Company DescriptionCapgemini SE is a global leader in consulting, technology services, and digital transformation. The company operates across various sectors, including financial services, public sector, consumer goods, and manufacturing, providing a broad range of services such as consulting, IT services, managed services, and business process outsourcing. With its headquarters in Paris, France, Capgemini is known for helping businesses harness the power of technology and drive innovation to stay competitive in an ever-evolving market.

How the Company Makes MoneyCapgemini generates revenue through a diversified portfolio of services that cater to the digital transformation needs of its clients. The company earns money primarily from consulting services, where it provides strategic advice and guidance to businesses on technology adoption and transformation. IT services form another major revenue stream, where Capgemini offers system integration, application development, and maintenance services. Additionally, managed services contribute significantly to its earnings, involving the outsourcing of IT infrastructure and operations management. Business process outsourcing (BPO) also plays a crucial role, where the company manages various business functions for its clients. Key factors contributing to Capgemini's earnings include its global reach, strong industry expertise, and strategic partnerships with leading technology firms like Microsoft, IBM, and SAP, which enhance its service offerings and competitive positioning in the market.

Capgemini Earnings Call Summary

Earnings Call Date:Jul 30, 2025

(Q2-2025)

% Change Since: |

Next Earnings Date:Feb 13, 2026

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture with positive developments in revenue growth, bookings, and strategic wins in key sectors and regions. However, these were counterbalanced by declines in net profit, manufacturing sector weakness, and challenges in Europe, alongside increased restructuring costs and pricing pressure.

Q2-2025 Updates

Positive Updates

Positive Revenue Growth in Q2

Capgemini returned to positive constant currency growth in Q2 2025 at plus 0.7% year-on-year, with H1 revenue reaching EUR 1.107 billion, up 0.2% year-on-year.

Strong Bookings and Solid Commercial Momentum

Bookings totaled EUR 11.993 billion in H1 2025, representing a 2.1% year-on-year increase, with a book-to-bill ratio of 1.08.

Regional Growth Highlights

Growth rates in the U.K. and Ireland, North America, Asia Pacific, and Latin America accelerated, particularly driven by financial services and TMT sectors.

High-Value Service Offering and Strategic Wins

Capgemini secured significant contracts in cloud services, aerospace, and finance transformation, showcasing strong traction for their high-value service offering.

Strong Demand for Cloud, Data, and AI

Capgemini experienced strong demand for cloud, data, and AI services, with Gen AI and Agentic AI contributing to over 7% of Q2 bookings.

Negative Updates

Decline in Net Profit and Basic EPS

Net profit group share decreased to EUR 724 million compared with EUR 835 million in H1 last year, and basic EPS was down 13% year-on-year.

Decline in Manufacturing Sector

The manufacturing sector remained weak in Q2 at minus 4% year-on-year.

Revenue Decline in France and Rest of Europe

Revenues in France and the rest of Europe declined by minus 5% and minus 2.3%, respectively.

Headcount Fluctuations and Increased Restructuring Costs

Total headcount increased by 4% year-on-year, with restructuring costs higher in H1 2025 at EUR 136 million compared to EUR 53 million in H1 2024.

Challenging Pricing Environment

The competitive market and client expectations for cost savings are putting pressure on gross margins.

Company Guidance

During the H1 2025 results call, Capgemini's CEO Aiman Ezzat highlighted several key metrics that reflect the company's performance and outlook. Capgemini reported a slight year-on-year revenue growth of 0.2% for H1 2025, reaching EUR 11.107 billion, and returned to positive constant currency growth in Q2 at 0.7% year-on-year. Bookings for the period totaled EUR 11.993 billion, representing a 2.1% increase year-on-year, with a solid book-to-bill ratio of 1.08. The operating margin remained stable at 12.4% of revenues, equivalent to EUR 1.377 billion. Despite a challenging economic environment, Capgemini maintained a normalized EPS of EUR 6, up 2% year-on-year, and generated an organic free cash flow of EUR 60 million. The company expects constant currency revenue growth for the full year to range between minus 1% and plus 1%, with M&A contributing around 1 point to growth. The operating margin target is set at 13.3% to 13.5%, and the organic free cash flow objective remains at approximately EUR 1.9 billion.

Capgemini Financial Statement Overview

Summary

Capgemini demonstrates stable profitability with consistent revenue and profit margins. The company has strengthened its equity position while maintaining balanced leverage. Cash flow generation remains strong, though growth in free cash flow is limited.

Income Statement

Positive

Capgemini demonstrates stable profitability with a consistent gross profit margin of around 27% and a net profit margin of approximately 7.5% over the years. The revenue growth has been steady, with a notable increase from 2020 to 2021 by 14.6%, although the growth rate has slowed in recent years. The EBIT and EBITDA margins are strong, reflecting efficient operations.

Balance Sheet

Positive

The company maintains a reasonable debt-to-equity ratio, improving from 1.48 in 2020 to 0.52 in 2024, indicating a stronger equity position. The return on equity has been robust, reaching 14.2% in 2024, showing effective management of shareholder funds. The equity ratio has improved, reflecting a healthy balance sheet despite the industry’s capital intensity.

Cash Flow

Positive

Capgemini's cash flow statements reveal consistent free cash flow generation, with a free cash flow to net income ratio exceeding 100% over the years, indicating strong cash profitability. Operating cash flow to net income ratio also supports efficient cash generation from operations, although free cash flow growth has been minimal, suggesting limited expansion in cash generation.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	22.10B	22.52B	22.00B	18.16B	15.85B
Gross Profit	6.05B	6.05B	5.83B	4.79B	4.14B
EBITDA	3.23B	3.19B	3.14B	2.53B	2.18B
Net Income	1.67B	1.66B	1.55B	1.16B	957.00M
Balance Sheet
Total Assets	25.66B	24.70B	25.48B	24.03B	21.95B
Cash, Cash Equivalents and Short-Term Investments	3.06B	3.70B	4.19B	3.51B	3.17B
Total Debt	6.08B	6.59B	7.55B	7.64B	9.05B
Total Liabilities	13.86B	14.23B	15.74B	15.55B	15.84B
Stockholders Equity	11.78B	10.45B	9.73B	8.47B	6.10B
Cash Flow
Free Cash Flow	2.21B	2.27B	2.23B	2.31B	1.46B
Operating Cash Flow	2.53B	2.52B	2.52B	2.58B	1.66B
Investing Cash Flow	-1.34B	-383.00M	-659.00M	-678.00M	-1.71B
Financing Cash Flow	-2.02B	-2.31B	-1.12B	-1.75B	562.00M

Capgemini Technical Analysis

Technical Analysis Sentiment

Negative

Last Price28.96

Price Trends

50DMA

31.10

Negative

100DMA

31.51

Negative

200DMA

32.09

Negative

Market Momentum

MACD

-0.57

Negative

RSI

44.05

Neutral

STOCH

21.75

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CGEMY, the sentiment is Negative. The current price of 28.96 is above the 20-day moving average (MA) of 28.86, below the 50-day MA of 31.10, and below the 200-day MA of 32.09, indicating a neutral trend. The MACD of -0.57 indicates Negative momentum. The RSI at 44.05 is Neutral, neither overbought nor oversold. The STOCH value of 21.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CGEMY.

Capgemini Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EPAM	78 Outperform	$9.48B	24.75	11.36%	―	9.73%	-0.29%
INFY	75 Outperform	$72.49B	22.27	30.46%	2.99%	4.52%	-0.22%
CTSH	74 Outperform	$35.01B	14.56	16.69%	1.72%	6.34%	12.16%
WIT	73 Outperform	$30.11B	20.93	16.50%	2.95%	-1.95%	62.75%
ACN	70 Outperform	$159.09B	20.33	27.27%	2.31%	6.21%	14.87%
CGEMY	62 Neutral	$24.37B	14.30	13.84%	2.62%	-0.20%	-6.50%
Sector *	61 Neutral	$36.05B	6.66	-10.10%	1.86%	8.68%	-8.81%

* Technology Sector Average

Performance Comparison

CGEMY

Capgemini

28.96

-11.94

-29.19%

ACN

Accenture

256.17

-79.60

-23.71%

CTSH

Cognizant

71.72

-4.85

-6.33%

EPAM

Epam Systems

174.18

-26.58

-13.24%

INFY

Infosys

17.00

-5.78

-25.37%

WIT

Wipro

2.80

-0.30

-9.68%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 19, 2025