Sodexo SA (SDXAY) AI Stock Analysis

• Market Cap: $7.81B
• Dividend Yield: 4.27%
• Average Volume (3M): 2.18K
• Price to Earnings (P/E): 10.5
• Beta (1Y): 0.41
• Revenue Growth: 5.85%
• EPS Growth: 136.72%
• Country: US
• Employees: 317,177
• Sector: Industrials
• Sector Strength: 72
• Industry: Specialty Business Services
• EPS (TTM): 0.53
• Shares Outstanding: 737,274,960
• 10 Day Avg. Volume: 3,362
• 30 Day Avg. Volume: 2,179
• PEG Ratio: 0.03
• Price to Book (P/B): 1.69
• Price to Sales (P/S): 0.33
• P/FCF Ratio: 12.67
• Enterprise Value/Market Cap: 1.28
• Enterprise Value/Revenue: 0.42
• Enterprise Value/Gross Profit: 3.63
• Enterprise Value/Ebitda: 6.61
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 1.06
• Revenue Forecast (FY): $27.89B

• Rating: 69 Neutral
• Price Target: $12.00 ▲(9.29% Upside)
• Action: Downgraded Date: 12/19/25
• Date: Action: Downgraded 12/19/25

Sodexo SA's overall stock score reflects strong financial performance and attractive valuation, offset by technical challenges and transitional guidance. The high dividend yield and low P/E ratio are significant positives, while the bearish technical indicators and North American challenges present risks.

Positive Factors

Global diversified operations

Sodexo's presence across 70+ countries and multiple end markets (corporate, healthcare, education, remote sites) provides durable revenue diversification and scale. Long-term service contracts and cross-selling reduce exposure to single-market downturns and support steady organic growth.

Sustained revenue growth and margin recovery

A near-double-digit revenue rise and improvement in net margin signal structural revenue momentum and improving profitability from operations. For a services business, this reflects pricing power, contract retention and operational adjustments that support medium-term margin sustainability.

Healthy cash generation and conversion

Positive free cash flow growth and a 0.65 FCF-to-net-income ratio indicate reliable cash conversion from recurring services. Adequate operating cash versus net income supports dividends, reinvestment in digital/HR systems and gradual deleveraging, underpinning financial flexibility over multiple quarters.

Negative Factors

Elevated leverage

A debt-to-equity ratio around 1.44 remains relatively high for a services firm, constraining strategic flexibility. Elevated leverage increases interest and refinancing risk, reduces headroom for M&A or cyclical shocks, and makes sustained investment plans more sensitive to cash flow volatility.

North America commercial weakness

Loss of a major global account and softer U.S. Education performance indicate structural commercial execution risk in a key region. Lower retention and enrollment headwinds can reduce scale benefits and margins in North America, requiring sustained sales and contract recovery efforts to restore growth.

Transition investments pressuring margins

Planned foundational investments (HR, finance, supply, digital) will depress underlying operating margin in the medium term and create execution risk. While intended to boost future efficiency, these costs can compress near-term profitability and delay margin recovery if rollout is slower than anticipated.

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 shows strong financial performance with robust revenue growth and improved profitability. The balance sheet reflects high but manageable leverage, while cash flow generation remains solid. However, there is room for improvement in operational efficiency and leverage management.

Income Statement

Sodexo SA has demonstrated strong revenue growth with a 9.45% increase in the latest year, indicating a positive trajectory. The gross profit margin has slightly decreased over the years, but remains stable. The net profit margin has improved significantly from 0.71% in 2024 to 2.89% in 2025, showing enhanced profitability. However, the EBIT and EBITDA margins have slightly declined, suggesting room for operational efficiency improvements.

Balance Sheet

The company's debt-to-equity ratio has improved slightly from previous years, indicating better leverage management, but remains relatively high at 1.44. Return on equity has increased to 17.23%, reflecting improved profitability and efficient use of equity. The equity ratio is stable, suggesting a balanced capital structure, but the high leverage poses potential risks.

Cash Flow

Sodexo's free cash flow growth rate is positive at 3.96%, indicating healthy cash generation. The operating cash flow to net income ratio is 0.16, showing that operating cash flow covers net income adequately. The free cash flow to net income ratio is 0.65, suggesting that a significant portion of earnings is converted into free cash flow, although there is room for improvement.

Breakdown	Aug 2025	Aug 2024	Aug 2023	Aug 2022	Aug 2021
Income Statement
Total Revenue	22.60B	23.80B	22.64B	21.13B	17.43B
Gross Profit	2.63B	2.85B	2.72B	3.04B	2.42B
EBITDA	1.55B	1.65B	1.38B	1.30B	966.00M
Net Income	763.76M	168.00M	794.00M	695.00M	139.00M
Balance Sheet
Total Assets	17.38B	15.02B	20.79B	20.92B	18.99B
Cash, Cash Equivalents and Short-Term Investments	2.45B	2.14B	2.02B	3.23B	4.60B
Total Debt	6.37B	5.47B	6.38B	6.66B	7.03B
Total Liabilities	12.93B	11.23B	16.24B	16.50B	15.82B
Stockholders Equity	4.43B	3.78B	4.54B	4.42B	3.17B
Cash Flow
Free Cash Flow	592.32M	962.00M	1.04B	690.00M	686.00M
Operating Cash Flow	904.90M	1.32B	1.38B	1.03B	982.00M
Investing Cash Flow	-366.00M	-1.05B	-526.00M	-386.00M	-317.00M
Financing Cash Flow	-498.00M	-1.35B	-646.00M	-1.11B	803.00M

Sodexo SA Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 10.98
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SDXAY, the sentiment is Positive. The current price of 10.98 is above the 20-day moving average (MA) of 10.93, above the 50-day MA of 10.43, and below the 200-day MA of 11.28, indicating a neutral trend. The MACD of 0.21 indicates Positive momentum. The RSI at 56.19 is Neutral, neither overbought nor oversold. The STOCH value of 14.91 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SDXAY.

Sodexo SA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ABM	73 Outperform	$2.62B	17.18	9.10%	2.20%	4.62%	102.72%
SDXAY	69 Neutral	$7.81B	10.47	16.21%	4.27%	5.85%	136.72%
ARMK	68 Neutral	$11.00B	35.19	10.08%	1.14%	6.35%	24.07%
RTO	66 Neutral	$15.20B	47.32	5.86%	2.20%	1.56%	-32.50%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
PRSU	61 Neutral	$1.01B	43.14	-24.71%	―	-68.48%	2198.47%
CBZ	60 Neutral	$1.44B	16.27	7.44%	―	59.19%	-35.47%