Sodexo SA (SW) AI Stock Analysis

• Market Cap: €8.33B
• Dividend Yield: 4.65%
• Average Volume (3M): 258.33K
• Price to Earnings (P/E): 12.3
• Beta (1Y): 0.19
• Revenue Growth: 6.71%
• EPS Growth: 141.19%
• Country: FR
• Employees: 317,177
• Sector: Consumer Defensive
• Sector Strength: 61
• Industry: Specialty Business Services
• EPS (TTM): 4.63
• Shares Outstanding: 147,454,880
• 10 Day Avg. Volume: 259,926
• 30 Day Avg. Volume: 258,330
• PEG Ratio: 0.04
• Price to Book (P/B): 2.01
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 12.09
• 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: €72.17
• Price Target Upside: 27.06% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

• Rating: 65 Neutral
• Price Target: ―

Sodexo SA's overall stock score reflects a stable financial performance with areas for improvement in profitability and cash flow efficiency. While the stock appears undervalued with an attractive dividend yield, the technical indicators suggest a bearish trend. Investors should weigh the potential for income and valuation upside against the current negative technical signals.

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 SA generates revenue primarily through its diverse service offerings, structured around two main segments: On-Site Services and Benefits & Rewards Services. The On-Site Services segment, which makes up the majority of the company's income, involves providing food services and facilities management solutions to clients in sectors like corporate, healthcare, education, and government. This includes managing cafeterias, janitorial services, and maintenance operations. The Benefits & Rewards Services segment offers employee benefit and incentive programs, such as meal vouchers and gift cards, which companies use to reward and motivate their employees. Sodexo's revenue model is further bolstered by strategic partnerships and contracts with institutions and businesses globally, ensuring a steady stream of income through long-term agreements.

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	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 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
	EBIT
1.12B	1.10B	847.00M	1.05B	568.00M	141.00M
	EBITDA
1.55B	1.65B	1.38B	1.30B	966.00M	1.01B
	Net Income Common Stockholders
676.00M	168.00M	794.00M	695.00M	139.00M	-319.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.42B	2.14B	2.02B	3.23B	4.60B	2.07B
	Total Assets
15.34B	15.02B	20.79B	20.92B	18.99B	17.35B
	Total Debt
5.61B	5.47B	6.38B	6.66B	7.03B	6.36B
	Net Debt
4.18B	3.33B	4.36B	3.44B	2.72B	4.33B
	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: 56.80
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 56.8 is below the 20-day moving average (MA) of 58.72, below the 50-day MA of 57.16, and below the 200-day MA of 70.25, indicating a bearish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 39.43 is Neutral, neither overbought nor oversold. The STOCH value of 4.73 is Positive, 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
Sector *	65 Neutral	$8.88B	15.05	4.75%	203.76%	3.54%	-2.50%
SW	65 Neutral	€8.33B	12.31	16.07%	4.65%	6.71%	141.19%
ELSSF		$6.34B	15.60	9.66%	2.02%	―	―
0QAG		€2.75B	50.57	10.24%	―	―	―
0J6X		€5.46B	10.41	11.90%	4.61%	―	―
8WG		€73.44M	14.93	7.59%	1.73%	―	―
PLX	72 Outperform	€4.20B	17.65		1.65%	―	―