Capgemini SE (CAP) AI Stock Analysis

• Market Cap: €17.14B
• Dividend Yield: 2.35%
• Average Volume (3M): 457.24K
• Price to Earnings (P/E): 15.0
• Beta (1Y): 1.06
• Revenue Growth: -0.76%
• EPS Growth: -6.99%
• Country: FR
• Employees: 341,118
• Sector: General
• Sector Strength: N/A
• Industry: Information Technology Services
• EPS (TTM): 6.98
• Shares Outstanding: 169,928,670
• 10 Day Avg. Volume: 403,860
• 30 Day Avg. Volume: 457,238
• PEG Ratio: -3.99
• Price to Book (P/B): 2.07
• Price to Sales (P/S): 1.07
• P/FCF Ratio: 11.05
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €148.86
• Price Target Upside: 47.24% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): 12.77
• Revenue Forecast (FY): €23.91B

• Rating: 64 Neutral
• Price Target: €114.00 ▲(12.76% Upside)
• Action: Downgraded Date: 02/28/26
• Date: Action: Downgraded 02/28/26

The score is driven primarily by healthy financial performance (notably strong cash generation) but is held back by 2025 margin compression and higher leverage. Technical indicators are decisively weak and reduce the score further, while a low P/E and attractive dividend yield provide meaningful valuation support.

Positive Factors

Cash generation consistency

Capgemini's operating cash flow and free cash flow have been consistently strong and stable over multiple years, with FCF typically covering ~88–90% of net income. This durable cash conversion supports dividends, reinvestment and resilience through business cycles without relying on volatile financing.

Multi-year revenue growth

Sustained revenue expansion to ~€22.5B reflects broad client demand for consulting, digital and cloud services. This multi-year top-line growth provides a sizeable, diversified revenue base that supports scale benefits, cross-selling and continued investment in high-growth service lines.

Scale & market position

Capgemini's global leadership and large employee base (341,118) underpin deep sector coverage and delivery capacity across financial services, manufacturing and public sector. Scale and established partnerships with major tech vendors strengthen competitive positioning and long-term client relationships.

Negative Factors

2025 margin compression

A drastic drop in gross and operating margins in 2025 signals either adverse cost mix, pricing pressure, or one-off items that materially weaken profitability. If structural, lower margins reduce free cash flow margins and return on capital, making investment and payout policies harder to sustain.

Rising leverage

Re-leveraging in 2025 meaningfully reduces financial flexibility versus prior years. Higher absolute debt and a ~0.89 debt/equity ratio increase interest exposure and constrain the company's ability to fund M&A, buybacks or absorb shocks without raising funding costs or cutting discretionary spending.

Uneven growth & execution risk

Revenue growth has been lumpy, including a slight 2024 decline, and fundamentals show negative EPS growth in recent metrics. This inconsistency raises execution risk for sustaining margins and predictable cash flow, complicating long-term planning and client delivery investments.

Capgemini SE Business Overview & Revenue Model

Company Description

Capgemini SE provides consulting, digital transformation, technology, and engineering services primarily in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific. The company offers strategy and transformation services, including strategy, technology, data science, and creative design to support various clients within the digital economy. It also provides applications and technology services that helps the clients to develop, modernize, extend, and secure their IT and digital environment using the latest technologies, as well as offers local technology services in cloud, cybersecurity, quality assurance, testing, and new technology fields. In addition, the company offers business process outsourcing and transactional services, as well as installation and maintenance services for its clients' IT infrastructures in data centers or in the cloud. It serves various industries, including consumer goods and retail; energy and utilities; banking, capital markets, and insurance; manufacturing and life sciences; public sector; telecommunications, media, and technology; and services. Capgemini SE has a strategic partnership with CONA Services LLC to develop digital solutions for the consumer products industry and retail customers. The company was founded in 1967 and is headquartered in Paris, France.

How the Company Makes Money

Capgemini generates revenue primarily through its consulting and technology services. The company operates on a project-based revenue model, where it charges clients for services rendered, often based on time-and-materials contracts or fixed-price agreements. Key revenue streams include IT services, consulting, and business process outsourcing. Additionally, Capgemini benefits from strategic partnerships with leading technology providers such as Microsoft, Salesforce, and SAP, which enhance its service offerings and attract more clients. The company's emphasis on digital transformation and cloud services has also contributed significantly to its earnings, as businesses increasingly seek expertise in these areas.

Capgemini SE Financial Statement Overview

Summary

Strong multi-year revenue growth and consistently solid free cash flow support the business, but 2025 shows a sharp gross/operating margin compression and a notable rise in leverage (debt-to-equity up to ~0.89), increasing execution and balance-sheet risk.

Income Statement

Revenue expanded strongly from 2020 to 2025 (from ~€15.8B to ~€22.5B), helped by a step-up in 2025, but growth has been uneven (slight decline in 2024). Profitability is generally steady with net margins mostly in the mid–single digits (~6–8%) and operating profitability in the low-teens, supporting consistent earnings. A key weakness is the sharp 2025 gross and operating margin compression versus prior years (gross margin falling to ~13% from ~27%), which raises questions around cost mix or one-offs and tempers the otherwise solid multi-year trajectory.

Balance Sheet

The balance sheet shows decent shareholder returns (return on equity mostly ~14–16%), but leverage has become a more notable swing factor. Debt relative to equity improved meaningfully from 2020 to 2024, then rose sharply in 2025 (debt increasing to ~€10.3B and debt-to-equity moving back up to ~0.89). Overall assets have grown, but the re-leveraging in 2025 reduces financial flexibility versus the prior year and is the main balance-sheet risk to monitor.

Cash Flow

Cash generation is a consistent strength: operating cash flow has been stable around ~€2.4–€2.5B since 2021 and free cash flow has remained strong at ~€2.1–€2.3B, with free cash flow typically covering ~88–90% of net income. Growth in free cash flow is mixed year-to-year (including small declines in 2022 and 2024), but overall conversion remains robust and supports resilience. The main weakness is that operating cash flow relative to reported profitability is not particularly high (coverage ratios around ~0.30–0.38), suggesting limited cushion if working capital or profitability worsens.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	22.46B	22.10B	22.52B	22.00B	18.16B
Gross Profit	2.98B	6.05B	6.05B	5.70B	4.67B
EBITDA	2.98B	3.23B	3.19B	3.13B	2.51B
Net Income	1.60B	1.67B	1.66B	1.55B	1.16B
Balance Sheet
Total Assets	29.06B	25.66B	24.70B	25.48B	24.03B
Cash, Cash Equivalents and Short-Term Investments	3.03B	3.06B	3.70B	4.19B	3.51B
Total Debt	10.31B	6.08B	6.59B	7.55B	7.64B
Total Liabilities	17.39B	13.86B	14.23B	15.74B	15.55B
Stockholders Equity	11.65B	11.78B	10.45B	9.73B	8.47B
Cash Flow
Free Cash Flow	2.18B	2.21B	2.27B	2.16B	2.19B
Operating Cash Flow	2.47B	2.53B	2.52B	2.45B	2.46B
Investing Cash Flow	-4.02B	-1.34B	-383.00M	-659.00M	-678.00M
Financing Cash Flow	1.82B	-2.02B	-2.31B	-1.05B	-1.62B

Capgemini SE Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 101.10
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:CAP, the sentiment is Negative. The current price of 101.1 is below the 20-day moving average (MA) of 105.52, below the 50-day MA of 117.64, and below the 200-day MA of 129.12, indicating a bearish trend. The MACD of -3.02 indicates Negative momentum. The RSI at 34.64 is Neutral, neither overbought nor oversold. The STOCH value of 7.00 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FR:CAP.

Capgemini SE Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WAVE	76 Outperform	€1.15B	9.75	12.87%	0.84%	7.00%	20.56%
NRO	72 Outperform	€847.86M	20.10	14.08%	3.07%	7.39%	4.58%
SOP	67 Neutral	€2.51B	10.15	14.39%	3.03%	-4.12%	43.37%
CAP	64 Neutral	€17.14B	15.05	10.95%	2.35%	-0.76%	-6.99%
ATE	57 Neutral	€1.93B	23.95	6.98%	2.08%	-0.23%	-37.70%
Sector *	55 Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
ATO	41 Neutral	€780.12M	-0.69	319.82%	―	-14.60%	―