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Sodexo SA (SDXAY)
OTHER OTC:SDXAY
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Sodexo SA
(OTC:SDXAY)
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Rating:73Outperform
Price Target:
$14.00
▲(28.21% Upside)
Sodexo SA's overall stock score reflects solid financial performance and attractive valuation, which are the most significant positive factors. However, technical indicators suggest mixed momentum, and the earnings call revealed challenges that could impact future growth, particularly in North America and Europe.
Positive Factors
Strong Business Development
Securing significant new contracts demonstrates Sodexo's ability to expand its client base and leverage cross-sell opportunities, which supports long-term revenue growth and market position.
Improved Operating Profit
The increase in operating profit and margin improvement indicates enhanced operational efficiency, which can lead to sustainable profitability and better resource allocation.
Resilient Financial Position
A resilient financial position with reduced financial expenses and strong cash flow enhances Sodexo's ability to invest in growth opportunities and manage economic downturns effectively.
Negative Factors
Downward Revision of Guidance
The downward revision in growth guidance suggests potential challenges in meeting revenue targets, which could impact investor confidence and long-term strategic planning.
Challenges in North America
Persistent challenges in North America, especially in healthcare, could hinder Sodexo's growth in a key market, affecting overall performance and strategic initiatives.
Impact of Macro Conditions in Europe
Macroeconomic challenges in Europe impacting facilities management services may lead to reduced profitability and require strategic adjustments to maintain competitiveness.
Sodexo SA (SDXAY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.97B
Dividend Yield72.39%
Average Volume (3M)2.18K
Price to Earnings (P/E)10.4
Beta (1Y)0.42
Revenue Growth5.85%
EPS Growth136.72%
CountryUS
Employees317,177
SectorIndustrials
Sector Strength72
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)0.53
Shares Outstanding737,274,960
10 Day Avg. Volume3,362
30 Day Avg. Volume2,179
Financial Highlights & Ratios
PEG Ratio-0.89
Price to Book (P/B)3.10
Price to Sales (P/S)0.49
P/FCF Ratio12.20
Enterprise Value/Market Cap1.98
Enterprise Value/Revenue0.65
Enterprise Value/Gross Profit5.48
Enterprise Value/Ebitda9.78
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusModerate Buy
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Sodexo SA Business Overview & Revenue Model
Company DescriptionSodexo 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 MoneySodexo 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 Earnings Call Summary
Earnings Call Date:Oct 23, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 10, 2026
Earnings Call Sentiment Neutral
Sodexo's fiscal year 2025 results call highlights significant progress in strategic refocusing and sustainability, but it also underscores notable challenges, especially in North America and Education. The company is focusing on addressing these issues with targeted plans and investments, viewing fiscal year 2026 as a transitional period.Q4-2025 Updates
Positive Updates
Refocus on Core Activities
Sodexo has successfully refocused on core activities, with food now covering more than 2/3 of the portfolio, up from 62% in fiscal year '22. Modernization efforts have led to digital engagement surging to almost 6 million active consumers, up from just over 1 million.
Sustainability and Safety Achievements
Sodexo hit targets on workplace safety, carbon emissions, and food waste, with a 34% reduction in carbon emissions and significant advancements in sustainability metrics.
Strong Performance in Healthcare
U.S. Healthcare delivered retention above 97% and a net development above 2%, with a strong focus on processes and client relationships driving success.
Negative Updates
Commercial Challenges in North America
Fiscal year '25 presented commercial challenges, particularly in North America, with retention at 94% due to the loss of a global account and softer performance in Education.
Organic Growth and Margin Pressure
Organic growth came in at 3.3%, with an underlying operating margin of 4.7%, slightly up by 10 basis points at constant currencies but facing FX headwinds. Fiscal year '26 is expected to see organic growth between 1.5% and 2.5%, with margins slightly lower due to mix, timing of growth, and accelerated investment.
Enrollment Challenges in U.S. Higher Education
Preliminary data shows a 0.7% decline in comparable enrollment in U.S. Higher Education, with additional challenges from international student enrollment due to visa issues.
Company Guidance
During the Sodexo Fiscal Year 2025 Results Call, guidance was provided for the upcoming fiscal year 2026, marking it as a year of transition due to leadership changes and significant investments in foundational systems. Organic growth is projected between 1.5% and 2.5%, with a minimum 2% contribution from pricing, although the growth will be affected by the reclassification of a major contract in North America, reducing reported growth by 70 basis points. The underlying operating margin is expected to be slightly lower than the 4.7% achieved in fiscal year 2025, primarily due to investments and challenges in North America. The company plans to enhance its foundations by investing in HR, finance, supply systems, and digital platforms, impacting short-term margins but positioning for long-term efficiency. Despite facing commercial challenges, particularly in the U.S. Education sector, Sodexo has set focused priorities, including expanding its U.S. sales team by 50% and renegotiating meal plans, to restore growth momentum by fiscal year 2027.Sodexo SA Financial Statement Overview
Summary
Sodexo SA shows solid financial health with growing revenues and improving profitability metrics. The balance sheet indicates moderate leverage, which is manageable, but declining equity could pose a risk. Strong cash flow generation supports operations and investments, though attention to equity and cost management is advisable.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.78
Positive
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.72
Positive
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.80
Positive
| 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 | 1.61B | 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
Negative
10.92
Price Trends
11.26
Negative
11.77
Negative
12.43
Negative
Market Momentum
-0.16
Negative
49.10
Neutral
98.46
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SDXAY, the sentiment is Negative. The current price of 10.92 is above the 20-day moving average (MA) of 10.60, below the 50-day MA of 11.26, and below the 200-day MA of 12.43, indicating a neutral trend. The MACD of -0.16 indicates Negative momentum. The RSI at 49.10 is Neutral, neither overbought nor oversold. The STOCH value of 98.46 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SDXAY.
Sodexo SA Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $7.97B | 10.44 | 16.21% | 72.39% | 5.85% | 136.72% | |
68 Neutral | $9.93B | 30.92 | 10.55% | 1.15% | 6.35% | 24.07% | |
66 Neutral | $14.56B | 43.66 | 5.86% | 2.27% | 1.56% | -32.50% | |
66 Neutral | $2.95B | 18.63 | 6.32% | 2.20% | 4.62% | 102.72% | |
66 Neutral | $2.86B | 34.44 | 7.44% | ― | 59.19% | -35.47% | |
64 Neutral | $1.03B | 2.86 | -24.71% | ― | -68.48% | 2198.47% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
SDXAY
Sodexo SA
10.92
-4.60
-29.64%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.