Sodexo SA (SW) AI Stock Analysis

• Market Cap: €6.68B
• Dividend Yield: 6.2%
• Average Volume (3M): 301.50K
• Price to Earnings (P/E): 9.7
• Beta (1Y): 0.40
• Revenue Growth: 1.16%
• EPS Growth: 314.94%
• Country: FR
• Employees: 317,177
• Sector: Industrials
• Sector Strength: 72
• Industry: Specialty Business Services
• EPS (TTM): 2.30
• Shares Outstanding: 147,454,880
• 10 Day Avg. Volume: 367,998
• 30 Day Avg. Volume: 301,501
• PEG Ratio: 0.03
• Price to Book (P/B): 2.00
• Price to Sales (P/S): 0.31
• P/FCF Ratio: 11.99
• 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: €48.53
• Price Target Upside: 6.29% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 10
• EPS Forecast (FY): 4.56
• Revenue Forecast (FY): €23.87B

• Rating: 61 Neutral
• Price Target: €46.00 ▲(0.74% Upside)
• Action: Downgraded Date: 12/25/25
• Date: Action: Downgraded 12/25/25

Overall score reflects moderate fundamentals and cash generation but constrained by a sharp recent revenue contraction and meaningful leverage. Valuation is a key positive (low P/E and high dividend yield), while technicals remain soft with negative momentum and price below longer-term moving averages.

Positive Factors

Cash Generation Ability

Consistent positive cash flow indicates strong operational efficiency and the ability to fund operations and investments, supporting long-term stability.

Business Model Strength

The reliance on multi-year contracts provides revenue visibility and stability, enhancing predictability and reducing volatility in earnings.

Operational Efficiency

Leveraging purchasing power and operational efficiency allows for cost savings and margin improvement, supporting long-term profitability.

Negative Factors

Revenue Decline

A significant revenue drop challenges growth prospects and may indicate underlying issues in market demand or contract renewals, impacting future performance.

Leverage Concerns

High leverage limits financial flexibility and increases risk, potentially affecting the company's ability to invest in growth or weather economic downturns.

Profitability Volatility

Volatile profitability can undermine investor confidence and complicate strategic planning, affecting long-term business sustainability.

Sodexo SA Business Overview & Revenue Model

Company Description

Sodexo S.A. develops, manages, and delivers on-site, benefits and rewards, and personal and home services worldwide. It provides various on-site services, including business and administration, which covers corporate, energy and resources, government and agencies, sports and leisure, and other customers; healthcare and seniors; and education services comprising schools and universities. The company also provides food services; benefits and rewards services, such as employee benefits, incentive and recognition programs, employee mobility, expense management, and public benefits; and personal and home services, including childcare, concierge, and in-home care services. In addition, it offers facility management services, including cleaning, front of house, security, ground maintenance, mailroom, document management, waste management, laundry, transportation, general repairs, technical maintenance, energy management, asset management, and project management services. The company was formerly known as Sodexho Alliance and changed its name to Sodexo S.A. in 2008. Sodexo S.A. was founded in 1966 and is headquartered in Issy-les-Moulineaux, France.

How the Company Makes Money

Sodexo generates revenue primarily through contracts with clients in multiple sectors, where it provides tailored services based on their specific needs. The company's revenue model is largely based on long-term service agreements, which can include fixed fees for managing food services and facilities. Key revenue streams include on-site food services, facilities management, and specialized services in areas such as healthcare and education. Additionally, Sodexo benefits from economies of scale due to its global presence, allowing it to negotiate better terms with suppliers and optimize operational efficiencies. The company also engages in strategic partnerships with various organizations to expand its service offerings and enhance client relationships, contributing to its overall earnings stability and growth.

Sodexo SA Financial Statement Overview

Summary

Moderate financial quality: positive EBIT and net income with consistently positive operating cash flow and free cash flow, but the latest annual period shows a sharp revenue decline (-40.5%) and profitability has been volatile. Elevated leverage relative to equity further limits financial flexibility.

Income Statement

Revenue has expanded steadily from 2022–2024, but the latest annual period shows a sharp revenue decline (2025 revenue growth rate of -40.5%), which materially weakens the near-term trajectory. Profitability is positive with EBIT of ~€1.1B and net income of ~€695M in 2025, but margins have been volatile over the cycle (including a net loss in 2020 and a large net income drop in 2024 vs. 2023). Overall, the business demonstrates earnings capacity, but recent top-line disruption and profit volatility cap the score.

Balance Sheet

Leverage is meaningful: total debt remains around €5.4–€6.7B while equity is ~€3.8B in 2024–2025, implying a consistently debt-heavy capital structure (debt-to-equity ~1.4–1.5 in 2022–2024, and higher in 2020–2021). Equity has also declined from 2022–2023 levels, reducing balance-sheet cushion. Assets are sizable (~€14.8–€20.9B historically), but the combination of elevated leverage and a thinner equity base keeps financial flexibility only moderate.

Cash Flow

Cash generation is solid: operating cash flow is consistently positive (€0.6–€1.4B historically; €964M in 2025) and free cash flow remains positive (€631M in 2025). However, free cash flow has softened recently (down in 2024 and meaningfully lower in 2025 vs. 2024), pointing to weaker conversion versus prior peaks. Still, the company shows resilience in producing cash through the cycle, which supports a better score than the balance sheet.

Breakdown	Aug 2025	Aug 2024	Aug 2023	Aug 2022	Aug 2021
Income Statement
Total Revenue	24.07B	23.80B	22.64B	21.13B	17.43B
Gross Profit	2.80B	2.85B	2.72B	3.04B	2.42B
EBITDA	1.58B	1.65B	1.38B	1.30B	966.00M
Net Income	695.00M	168.00M	794.00M	695.00M	139.00M
Balance Sheet
Total Assets	14.85B	15.02B	20.79B	20.92B	18.99B
Cash, Cash Equivalents and Short-Term Investments	2.09B	2.14B	2.02B	3.23B	4.60B
Total Debt	5.45B	5.47B	6.38B	6.66B	7.03B
Total Liabilities	11.05B	11.23B	16.24B	16.50B	15.82B
Stockholders Equity	3.79B	3.78B	4.54B	4.42B	3.17B
Cash Flow
Free Cash Flow	631.00M	962.00M	1.04B	690.00M	686.00M
Operating Cash Flow	964.00M	1.32B	1.38B	1.03B	982.00M
Investing Cash Flow	-390.00M	-1.05B	-526.00M	-386.00M	-317.00M
Financing Cash Flow	-530.00M	-1.35B	-646.00M	-1.11B	803.00M

Sodexo SA Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 45.66
• 50DMA: Positive
• 100DMA: Positive
• 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:SW, the sentiment is Neutral. The current price of 45.66 is below the 20-day moving average (MA) of 46.38, above the 50-day MA of 44.29, and below the 200-day MA of 47.71, indicating a neutral trend. The MACD of 0.87 indicates Positive momentum. The RSI at 55.47 is Neutral, neither overbought nor oversold. The STOCH value of 38.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for FR:SW.

Sodexo SA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ELIS	76 Outperform	$6.21B	17.23	10.25%	1.88%	4.83%	52.47%
ALCIS	69 Neutral	€104.91M	14.57	11.36%	1.30%	23.95%	173.40%
PLX	69 Neutral	€2.30B	8.36	―	2.91%	6.36%	48.97%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
TEP	62 Neutral	€3.06B	6.08	11.73%	6.86%	9.08%	-22.55%
SW	61 Neutral	€6.68B	9.75	18.37%	6.20%	1.16%	314.94%
IDL	56 Neutral	€2.59B	44.67	11.18%	―	18.03%	3.43%