Sodexo SA (SW) AI Stock Analysis

• Market Cap: €7.64B
• Dividend Yield: 17.08%
• Average Volume (3M): 148.36K
• Price to Earnings (P/E): 11.3
• Beta (1Y): 0.25
• Revenue Growth: 6.71%
• EPS Growth: 141.19%
• Country: FR
• Employees: 317,177
• Sector: Services
• Sector Strength: N/A
• Industry: Specialty Business Services
• EPS (TTM): 3.08
• Shares Outstanding: 147,454,880
• 10 Day Avg. Volume: 154,202
• 30 Day Avg. Volume: 148,356
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• 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: €62.13
• Price Target Upside: 18.46% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

• Rating: 68 Neutral
• Price Target: €57.00 ▲(8.67% Upside)

The overall stock score is primarily influenced by the strong valuation, with a low P/E ratio and high dividend yield suggesting the stock is undervalued and offers significant income potential. Financial performance is stable but highlights the need for improved profitability and cash flow efficiency. Technical analysis indicates a neutral to slightly bearish trend, which slightly offsets the positive valuation.

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

Sodexo SA exhibits growth in revenue and operational efficiency, with moderate leverage and stable equity levels. However, profitability margins and cash flow generation present areas for improvement. The company's financial health is stable but would benefit from increased profitability and cash flow efficiency to further strengthen its financial position.

Income Statement

Sodexo SA has shown positive revenue growth from 2023 to 2024, with a rate of approximately 5.1%. The gross profit margin stands at approximately 11.95%, indicating moderate profitability. However, the net profit margin is low at about 0.71%, reflecting challenges in converting revenue into profit. The EBIT and EBITDA margins are 4.64% and 6.93%, respectively, suggesting operational efficiency but constrained profitability.

Balance Sheet

The company's debt-to-equity ratio is 1.45, which reflects a moderate level of leverage. The return on equity (ROE) is approximately 4.44%, indicating limited return for shareholders. The equity ratio is 25.16%, suggesting a stable equity base relative to total assets, though improvement is needed to enhance financial stability.

Cash Flow

Sodexo's free cash flow declined by about 7.27% from 2023 to 2024, indicating challenges in cash generation. The operating cash flow to net income ratio is 7.86, suggesting strong cash generation relative to net income. The free cash flow to net income ratio is 5.73, highlighting robust free cash flow but also a need for improved efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	24.17B	23.80B	22.64B	21.13B	17.43B	19.32B
Gross Profit	2.88B	2.85B	2.72B	3.04B	2.42B	2.48B
EBITDA	1.55B	1.65B	1.38B	1.30B	966.00M	1.01B
Net Income	676.00M	168.00M	794.00M	695.00M	139.00M	-319.00M
Balance Sheet
Total Assets	15.34B	15.02B	20.79B	20.92B	18.99B	17.35B
Cash, Cash Equivalents and Short-Term Investments	1.42B	2.14B	2.02B	3.23B	4.60B	2.07B
Total Debt	5.61B	5.47B	6.38B	6.66B	7.03B	6.36B
Total Liabilities	11.32B	11.23B	16.24B	16.50B	15.82B	14.58B
Stockholders Equity	4.00B	3.78B	4.54B	4.42B	3.17B	2.76B
Cash Flow
Free Cash Flow	667.00M	962.00M	1.04B	690.00M	686.00M	234.00M
Operating Cash Flow	1.01B	1.32B	1.38B	1.03B	982.00M	632.00M
Investing Cash Flow	554.00M	-1.05B	-526.00M	-386.00M	-317.00M	-430.00M
Financing Cash Flow	-1.60B	-1.35B	-646.00M	-1.11B	803.00M	198.00M

Sodexo SA Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 52.45
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• 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 Negative. The current price of 52.45 is above the 20-day moving average (MA) of 52.42, above the 50-day MA of 52.14, and below the 200-day MA of 62.33, indicating a bearish trend. The MACD of -0.11 indicates Negative momentum. The RSI at 48.03 is Neutral, neither overbought nor oversold. The STOCH value of 62.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FR:SW.

Sodexo SA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SW	68 Neutral	€7.64B	11.30	16.07%	17.08%	6.71%	141.19%
Sector *	65 Neutral	$13.59B	17.69	27.35%	―	0.00%	0.00%
ELSSF	―	$6.76B	16.35	10.25%	1.79%	―	―
0QAG	―	€2.66B	45.86	11.18%	―	―	―
0J6X	―	€3.81B	7.83	11.73%	―	―	―
8WG	―	€81.03M	16.07	7.59%	―	―	―
PLX	71 Outperform	€3.34B	14.23		2.19%	―	―