Capgemini SE (CAP) AI Stock Analysis

• Market Cap: €22.92B
• Dividend Yield: 2.54%
• Average Volume (3M): 457.63K
• Price to Earnings (P/E): 13.7
• Beta (1Y): 1.29
• Revenue Growth: -1.89%
• EPS Growth: 1.15%
• Country: FR
• Employees: 341,118
• Sector: Technology
• Sector Strength: 92
• Industry: Information Technology Services
• EPS (TTM): 6.18
• Shares Outstanding: 171,347,470
• 10 Day Avg. Volume: 505,361
• 30 Day Avg. Volume: 457,632
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• P/FCF Ratio: N/A
• 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: €172.83
• Price Target Upside: 28.02% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 70 Outperform
• Price Target: €154.00 ▲(14.07%Upside)

Capgemini SE's overall stock score reflects strong financial performance and reasonable valuation, though technical indicators reveal a bearish trend. The company's modest revenue growth and high debt levels in a potentially rising interest rate environment are important considerations for investors.

Positive Factors

Acquisition

The acquisition of WNS is being positioned as a play on AI.

Financial Performance

Margins are expected to show an annual improvement, reflecting a positive trend in financial performance.

Negative Factors

Investor Perception

There is doubt that the acquisition of WNS will materially change investor perception.

Market Conditions

Capgemini is operating in a challenging end market.

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 makes money primarily through its diversified portfolio of services that cater to the needs of various industry verticals. The company's revenue model is centered around the provision of consulting services, technology services, and outsourcing services. Consulting services involve advising clients on business strategy, digital transformation, and operational efficiency. Technology services include the development, integration, and management of IT systems and solutions. Outsourcing services entail the management of client operations and processes to improve efficiency and reduce costs. Key revenue streams include long-term contracts with large enterprises and government bodies, project-based consulting engagements, and managed services agreements. Capgemini also forms strategic partnerships with leading technology providers such as IBM, Microsoft, and SAP, which enhance its service offerings and drive additional revenue.

Capgemini SE Financial Statement Overview

Summary

Capgemini SE demonstrates strong profitability with stable margins and efficient cash generation. The balance sheet is solid but carries a notable level of debt, which could be a risk in a rising interest rate environment. Revenue growth has been modest, suggesting potential market saturation.

Income Statement

Capgemini SE demonstrates strong profitability with a consistent gross profit margin and stable EBIT margin. However, revenue growth has been modest in recent years, which might indicate market saturation or increased competition. The company has maintained a solid net profit margin, reflecting effective cost management.

Balance Sheet

The company maintains a healthy equity ratio, indicating a solid foundation of stockholders' equity relative to total assets. However, the debt-to-equity ratio is relatively high, which could pose risks in a rising interest rate environment. Return on equity is favorable, suggesting effective utilization of shareholder funds.

Cash Flow

Capgemini SE's cash flow generation is robust, with a strong free cash flow to net income ratio indicating effective conversion of earnings into cash. The operating cash flow to net income ratio is stable, showcasing efficient operational cash management. Free cash flow growth has been positive, supporting strategic investments and potential debt reduction.

Breakdown
Income Statement
Total Revenue
Gross Profit
EBITDA
Net Income
Balance Sheet
Total Assets
Cash, Cash Equivalents and Short-Term Investments
Total Debt
Total Liabilities
Stockholders Equity
Cash Flow
Free Cash Flow
Operating Cash Flow
Investing Cash Flow
Financing Cash Flow

Capgemini SE Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 135.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 135 is below the 20-day moving average (MA) of 139.60, below the 50-day MA of 144.45, and below the 200-day MA of 150.38, indicating a bearish trend. The MACD of -2.74 indicates Positive momentum. The RSI at 38.40 is Neutral, neither overbought nor oversold. The STOCH value of 24.39 is Neutral, 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
CAP	70 Outperform	€22.92B	13.65	15.03%	2.54%	-1.89%	1.15%
Sector *	50 Neutral	C$3.13B	2.46	-63.57%	2.58%	4.49%	-6.00%
0O1S	―	€2.61B	13.99	8.78%	1.24%	―	―
0DNH	―	€546.32M	0.01	58.08%	―	―	―
0GX2	―	€1.06B	20.37	14.35%	2.95%	―	―
0NJQ	―	€3.86B	13.78	14.39%	2.44%	―	―
0G1T	―	€1.50B	12.07	12.58%	0.77%	―	―