Sodexo SA (SDXAY) AI Stock Analysis

• Market Cap: $9.14B
• Dividend Yield: 3.76%
• Average Volume (3M): 2.30K
• Price to Earnings (P/E): 12.6
• Beta (1Y): 0.33
• Revenue Growth: 5.85%
• EPS Growth: 136.72%
• Country: US
• Employees: 317,177
• Sector: Industrials
• Sector Strength: 93
• Industry: Specialty Business Services
• EPS (TTM): 0.67
• Shares Outstanding: 737,274,960
• 10 Day Avg. Volume: 1,520
• 30 Day Avg. Volume: 2,299
• PEG Ratio: 0.04
• Price to Book (P/B): 1.86
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 11.17
• 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: $15.00
• Price Target Upside: 20.10% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 65 Neutral
• Price Target: $12.50 ▲(0.08%Upside)

Sodexo SA's overall stock score reflects solid financial fundamentals and attractive valuation metrics, tempered by bearish technical indicators and mixed guidance from the earnings call. While the company's financial health and high dividend yield are strong positives, the bearish momentum and revised growth outlook pose challenges that investors should consider.

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 three key streams: On-Site Services, Benefits & Rewards Services, and Personal & Home Services. The On-Site Services sector is the largest, encompassing food services, cleaning, maintenance, and other facility management services provided to clients in sectors like healthcare, education, and corporate offices. Benefits & Rewards Services include the provision of employee benefits solutions such as meal vouchers, gift cards, and incentive programs. Personal & Home Services cater to individual consumers, offering services like child care and home assistance. Additionally, strategic partnerships with businesses and governments, as well as contracts with educational institutions and healthcare facilities, play a significant role in driving revenue.

Sodexo SA Financial Statement Overview

Summary

Sodexo SA demonstrates solid financial health with growing revenues and improving profitability metrics. The balance sheet shows moderate leverage, which is manageable, but declining equity might pose a risk if not addressed. Strong cash flow generation supports the company's operations and investments. Overall, the company is on a positive trajectory, but careful attention to equity and cost management is advisable for sustained growth.

Income Statement

Sodexo SA's income statement shows solid revenue growth with a 5.14% increase from 2023 to 2024. Gross profit margin is healthy at 11.96%, and the net profit margin improved significantly from a loss in 2020 to 0.71% in 2024. The EBIT margin has increased to 4.64%, indicating improved operational efficiency. However, the net income is relatively low compared to revenue, suggesting room for improvement in cost management.

Balance Sheet

The balance sheet indicates a stable position with a debt-to-equity ratio of 1.45, reflecting a moderate level of leverage. The return on equity stands at 4.44%, suggesting efficient use of equity capital. The equity ratio is 25.16%, showing a balanced asset financing structure. However, the company's equity has decreased over the years, which could limit future financial flexibility.

Cash Flow

Sodexo SA's cash flow statement shows a strong free cash flow to net income ratio, highlighting effective cash conversion. Operating cash flow is robust at $1.32 billion, exceeding net income, which indicates strong cash generation from operations. However, there is a slight decline in free cash flow from 2023 to 2024, which needs monitoring.

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

Sodexo SA Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 12.49
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SDXAY, the sentiment is Neutral. The current price of 12.49 is above the 20-day moving average (MA) of 12.20, below the 50-day MA of 12.66, and below the 200-day MA of 14.49, indicating a neutral trend. The MACD of -0.06 indicates Negative momentum. The RSI at 55.44 is Neutral, neither overbought nor oversold. The STOCH value of 98.57 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SDXAY.

Sodexo SA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ABM	75 Outperform	$2.96B	38.04	4.30%	2.14%	3.52%	-67.27%
CBZ	74 Outperform	$4.16B	52.93	6.25%	―	32.27%	-40.50%
RTO	73 Outperform	$12.71B	32.57	7.44%	0.11%	3.96%	-17.48%
ARMK	71 Outperform	$11.37B	33.39	11.77%	0.93%	-3.47%	-45.03%
SDXAY	65 Neutral	$9.14B	12.63	16.21%	3.76%	5.85%	136.72%
UNF	61 Neutral	$3.11B	21.43	7.15%	0.80%	4.18%	18.93%
Sector *	58 Neutral	HK$14.94B	4.73	-2.78%	5.01%	3.80%	-54.55%