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Sodexo SA
(OTC:SDXAY)
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Rating:70Outperform
Price Target:
$13.50
▲(22.95% Upside)
Action:Upgraded
Date:07/03/26
The score is driven primarily by solid financial performance (growth and improving net profitability) and supportive technical strength (price above major moving averages with positive MACD), plus favorable income/valuation (5.16% yield with a moderate P/E). These positives are tempered by the latest earnings call’s weaker guidance, margin pressure, and higher leverage, which increase near-term execution and balance-sheet risk.
Positive Factors
Recurring multi‑year contracts
Sodexo’s core model of multi‑year, on‑site service contracts creates predictable, recurring revenue and high client switching costs. That structural contract profile supports steady cash flows, easier forecasting, and cross‑sell opportunities (food + FM) that bolster revenue durability and client retention over quarters.
Negative Factors
Elevated leverage
Leverage running near ~2.7x net debt/EBITDA and above stated targets reduces balance‑sheet flexibility. Elevated debt increases vulnerability to refinancing or interest cost shocks, limits capacity for M&A or cushion for cyclical revenue swings, and lengthens the horizon for achieving target capital structure.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring multi‑year contracts
Sodexo’s core model of multi‑year, on‑site service contracts creates predictable, recurring revenue and high client switching costs. That structural contract profile supports steady cash flows, easier forecasting, and cross‑sell opportunities (food + FM) that bolster revenue durability and client retention over quarters.
Read all positive factors
Sodexo SA (SDXAY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.96B
Dividend Yield4.27%
Average Volume (3M)2.18K
Price to Earnings (P/E)17.4
Beta (1Y)0.41
Revenue Growth4.88%
EPS Growth-28.57%
CountryUS
Employees317,177
SectorIndustrials
Sector Strength72
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)0.70
Shares Outstanding737,274,960
10 Day Avg. Volume3,362
30 Day Avg. Volume2,179
Financial Highlights & Ratios
PEG Ratio0.03
Price to Book (P/B)1.69
Price to Sales (P/S)0.33
P/FCF Ratio12.67
Enterprise Value/Market Cap1.30
Enterprise Value/Revenue0.50
Enterprise Value/Gross Profit4.63
Enterprise Value/Ebitda8.90
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.78
Revenue Forecast (FY)$27.34B
Sodexo SA Business Overview & Revenue Model
Company Description
Sodexo S.A. operates as a global service provider, delivering a comprehensive range of on-site management, employee benefits and rewards, and personal and home care solutions around the world. The company's on-site operations cater to diverse clie...
How the Company Makes Money
Sodexo primarily makes money by contracting with institutions and enterprises to manage recurring, on-site services. Its main revenue stream is service-contract revenue from (1) food services—operating cafeterias, patient/resident dining, school/u...
Sodexo SA Earnings Call Summary
Earnings Call Date:Apr 10, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 23, 2026
Earnings Call Sentiment Negative
The call presented a mixed picture: management has enacted a decisive strategic and organizational reset with targeted investments and early signs of improved commercial intensity, but H1 financials reveal meaningful execution shortfalls (margin compression, negative net new business, North America weakness), sizeable one-off provisions/charges and a recalibration of FY26 guidance. Short-term financial headwinds and higher leverage outweigh the early operational positives, though the company emphasizes that actions underway are intended to restore sustainable performance.Positive Updates
Leadership Reset and Strategic Program
New CEO Thierry Delaporte initiated a rapid leadership reshuffle (about two-thirds of North America leadership changed), simplified global structure (removed zone layer), pushed decision-making closer to clients and launched the 'shift and grow' program to restore execution, commercial intensity and accountability.
Negative Updates
Underlying Operating Profit Margin Decline
H1 underlying operating profit margin was 3.7%, down ~140–150 basis points year-on-year; management attributes the decline to operations/mix/leverage (~-50 bps), accelerated investments (~-20 bps) and the contract/asset review (~-70 bps).
Read all updates
Q2-2026 Updates
Positive
Negative
Leadership Reset and Strategic Program
New CEO Thierry Delaporte initiated a rapid leadership reshuffle (about two-thirds of North America leadership changed), simplified global structure (removed zone layer), pushed decision-making closer to clients and launched the 'shift and grow' program to restore execution, commercial intensity and accountability.
Read all positive updates
Company Guidance
Sodexo recalibrated FY‑26 guidance to organic growth of +0.5%–+1.0% and an underlying operating profit margin of 3.2%–3.4%; H1 metrics were organic growth +1.7% (pricing ≈+2.4%, like‑for‑like volumes ≈+0.2%), net new business ≈‑0.6%, retention 93.4% and development 5.3%, with H1 underlying OPM at 3.7% (down ~140–150 bps YoY driven roughly by operations/mix/leverage ≈‑50 bps, accelerated investments ≈‑20 bps and the contract/asset review ≈‑70 bps). Management expects a full‑year FX headwind of ~‑3% on reported revenue (H1 FX was ‑5.3%), a ~+0.5% revenue lift from M&A (Mediterránea), an annualized contract reclassification impact of ~‑100 bps (weighing more in H2), other operating income/expenses around ‑€300m (≈half restructuring), net financial expense ~‑€140m, an effective tax rate ~26%, and continues to expect seasonally stronger cash generation in H2 after H1 free cash flow of ‑€243m, operating cash flow €616m and net debt €3.6bn (net debt/EBITDA 2.7x, likely to finish the year above the 1–2x target).Sodexo SA Financial Statement Overview
Summary
Income Statement
75
Positive
Balance Sheet
68
Positive
Cash Flow
70
Positive
| Breakdown | TTM | Aug 2025 | Aug 2024 | Aug 2023 | Aug 2022 | Aug 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 23.18B | 22.60B | 23.80B | 22.64B | 21.13B | 17.43B |
| Gross Profit | 2.52B | 2.63B | 2.85B | 2.72B | 3.04B | 2.42B |
| EBITDA | 1.31B | 1.55B | 1.65B | 1.38B | 1.30B | 966.00M |
| Net Income | 439.81M | 763.76M | 168.00M | 794.00M | 695.00M | 139.00M |
Balance Sheet | ||||||
| Total Assets | 14.83B | 17.38B | 15.02B | 20.79B | 20.92B | 18.99B |
| Cash, Cash Equivalents and Short-Term Investments | 1.18B | 2.45B | 2.14B | 2.02B | 3.23B | 4.60B |
| Total Debt | 5.42B | 6.37B | 5.47B | 6.38B | 6.66B | 7.03B |
| Total Liabilities | 11.21B | 12.93B | 11.23B | 16.24B | 16.50B | 15.82B |
| Stockholders Equity | 3.61B | 4.43B | 3.78B | 4.54B | 4.42B | 3.17B |
Cash Flow | ||||||
| Free Cash Flow | 593.00M | 592.32M | 962.00M | 1.04B | 690.00M | 686.00M |
| Operating Cash Flow | 939.69M | 904.90M | 1.32B | 1.38B | 1.03B | 982.00M |
| Investing Cash Flow | -595.96M | -366.00M | -1.05B | -526.00M | -386.00M | -317.00M |
| Financing Cash Flow | -512.24M | -498.00M | -1.35B | -646.00M | -1.11B | 803.00M |
Sodexo SA Technical Analysis
Positive
10.98
Price Trends
10.93
Positive
10.65
Positive
10.70
Positive
Market Momentum
0.22
Positive
67.27
Neutral
46.15
Neutral
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 below the 20-day moving average (MA) of 11.58, above the 50-day MA of 10.93, and above the 200-day MA of 10.70, indicating a bullish trend. The MACD of 0.22 indicates Positive momentum. The RSI at 67.27 is Neutral, neither overbought nor oversold. The STOCH value of 46.15 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
70 Outperform | $8.96B | 17.37 | 12.16% | 4.27% | 4.88% | -28.57% | |
67 Neutral | $2.59B | 16.96 | 8.94% | 2.20% | 6.53% | 107.41% | |
67 Neutral | $1.88B | 13.83 | 8.32% | ― | 28.34% | 67.93% | |
65 Neutral | $1.51B | 50.36 | 5.44% | ― | -49.16% | -91.38% | |
65 Neutral | $14.80B | 41.39 | 11.23% | 1.14% | 10.15% | 3.07% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
60 Neutral | $14.94B | 38.60 | 6.51% | 2.20% | -0.33% | 20.26% |
* Industrials Sector Average
SDXAY
Sodexo SA
12.24
0.37
3.08%
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PRSU
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ARMK
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56.29
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RTO
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29.99
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26.57%
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.