CGI (GIB.A) AI Stock Analysis

• Market Cap: $30.51B
• Dividend Yield: 0.34%
• Average Volume (3M): 418.38K
• Price to Earnings (P/E): 18.0
• Beta (1Y): 0.59
• Revenue Growth: 7.13%
• EPS Growth: 5.02%
• Country: CA
• Employees: 94,000
• Sector: Technology
• Sector Strength: 95
• Industry: Information Technology Services
• EPS (TTM): 2.10
• Shares Outstanding: 200,268,840
• 10 Day Avg. Volume: 457,044
• 30 Day Avg. Volume: 418,379
• PEG Ratio: 27.51
• Price to Book (P/B): 3.07
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 15.51
• 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: $172.65
• Price Target Upside: 28.79% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9

• Rating: 66 Neutral
• Price Target: C$156.00 ▲(16.37%Upside)

The overall score is driven by a mix of financial and operational strengths and weaknesses. Strong revenue growth and financial stability are offset by operational inefficiencies and technical bearish indicators. Valuation and positive earnings sentiment support the stock's prospects, but challenges remain.

Positive Factors

Acquisitions

Recent acquisitions are expected to add approximately C$440M of incremental annualized revenues.

Earnings

CGI Group has reported a strong fourth quarter performance, setting a promising tone for the year ahead.

Growth Prospects

The company's promising outlook for 2025 suggests potential for continued success and growth.

Negative Factors

Client Demand

Policy uncertainty from Washington is negatively impacting client demand globally, especially for growth-oriented projects.

Demand Uncertainty

The impact of macro and geopolitical uncertainty is leading clients to slow their decision-making due to frustrations with planning.

Pricing Pressure

There is caution on pricing pressure, particularly in US Federal, due to ongoing headwinds and competitive pressures.

CGI Business Overview & Revenue Model

Company Description

CGI Inc., together with its subsidiaries, provides information technology (IT) and business process services in Canada; Western, Southern, Central, and Eastern Europe; Australia; Scandinavia; Finland, Poland, and Baltics; the United States; the United Kingdom; and the Asia Pacific. Its services include the management of IT and business outsourcing, systems integration and consulting, and software solutions selling activities. The company also offers application development, integration and maintenance, testing, portfolio management, and modernization services; business consulting; and a suite of business process services designed to address the needs of specific industries, as well as IT infrastructure services. It serves clients operating in government, banking and capital market, health, utility, communication and media, oil and gas, retail, consumer and services, space, manufacturing, insurance, life sciences, retail and consumer service, and transportation and logistics sectors. The company was formerly known as CGI Group Inc. and changed its name to CGI Inc. in January 2019. CGI Inc. was founded in 1976 and is headquartered in Montreal, Canada.

How the Company Makes Money

CGI Inc. generates revenue primarily through its extensive range of IT and business consulting services. The company's key revenue streams include systems integration, where it designs and implements custom IT solutions for clients; managed services, where it provides ongoing support and management of IT infrastructure and applications; and consulting services, offering strategic advice and solutions to address business challenges. Additionally, CGI benefits from long-term contracts and partnerships with governmental and private sector clients, ensuring a steady flow of income. The firm's global presence and expertise in digital transformation also contribute significantly to its earnings, enabling it to capitalize on the growing demand for innovative technology solutions.

CGI Financial Statement Overview

Summary

CGI presents a mixed financial picture. The company faces operational inefficiencies with negative gross and EBIT margins, yet maintains profitability due to effective cost controls and strong revenue growth. The balance sheet is robust, characterized by low leverage and high equity, and cash flows are stable, supporting ongoing operations and investments.

Income Statement

The TTM (Trailing-Twelve-Months) financials reveal a concerning trend with a negative gross profit, leading to substantial operating losses. Despite this, the company maintains a positive net income, indicating effective cost controls or non-operating income benefits. Revenue has shown consistent growth, improving by 3.2% year-over-year in the latest annual report. However, the negative EBIT margin in the TTM period is a significant drawback, highlighting operational inefficiencies.

Balance Sheet

CGI demonstrates a strong balance sheet with a debt-to-equity ratio of 0.43, indicating manageable leverage levels. The equity ratio stands at 54.33%, reflecting a stable capital structure. The return on equity is commendable at approximately 17.14%, showcasing effective use of shareholder funds to generate profits. These metrics suggest financial stability and a solid foundation despite operational challenges.

Cash Flow

The cash flow statements highlight robust free cash flow generation, with a healthy operating cash flow to net income ratio of 1.27. Free cash flow growth remains positive, although it has slightly decreased in the TTM period compared to previous years. This stability in cash flows supports the company's ongoing operations and strategic investments, providing a cushion against operational weaknesses.

Breakdown	TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	15.14B	14.68B	14.30B	12.87B	12.13B	12.16B
Gross Profit	-20.87B	2.42B	2.31B	2.82B	2.72B	2.74B
EBITDA	3.00B	2.89B	2.81B	2.53B	2.45B	2.42B
Net Income	1.74B	1.69B	1.63B	1.47B	1.37B	1.12B
Balance Sheet
Total Assets	18.72B	16.69B	15.80B	15.18B	15.02B	15.55B
Cash, Cash Equivalents and Short-Term Investments	1.10B	1.46B	1.67B	1.00B	1.72B	1.73B
Total Debt	4.37B	3.31B	3.74B	3.98B	4.18B	4.46B
Total Liabilities	8.55B	7.26B	7.49B	7.90B	8.03B	8.29B
Stockholders Equity	10.17B	9.43B	8.31B	7.27B	6.99B	7.26B
Cash Flow
Free Cash Flow	1.99B	2.10B	1.81B	1.57B	1.88B	1.70B
Operating Cash Flow	2.21B	2.20B	2.11B	1.86B	2.12B	1.94B
Investing Cash Flow	-2.31B	-775.38M	-561.86M	-911.95M	-397.55M	-572.45M
Financing Cash Flow	-190.19M	-1.61B	-1.19B	-1.59B	-1.65B	94.17M

CGI Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 134.05
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:GIB.A, the sentiment is Negative. The current price of 134.05 is below the 20-day moving average (MA) of 138.92, below the 50-day MA of 143.52, and below the 200-day MA of 151.64, indicating a bearish trend. The MACD of -2.01 indicates Positive momentum. The RSI at 28.91 is Positive, neither overbought nor oversold. The STOCH value of 25.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:GIB.A.

CGI Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GIB.A	66 Neutral	$30.51B	18.00	17.56%	0.34%	7.13%	5.02%
Sector *	62 Neutral	$34.85B	5.63	-12.19%	2.01%	5.91%	-17.91%
KNR	58 Neutral	C$104.58M	13.71	124.21%	―	-52.43%	941.71%
ALYAF	―	$181.90M	310.53	0.57%	―	―	―
PVT	51 Neutral	C$34.60M	―	-18.24%	―	-10.76%	-19.28%

CGI Corporate Events

CGI Achieves Strong Q2 Fiscal 2025 Results with Revenue Surpassing $4 Billion

CGI reported robust financial results for the second quarter of Fiscal 2025, with revenue surpassing $4 billion, marking a 7.6% increase year-over-year. The company’s strategic execution and financial resilience are evident in its strong bookings of $4.48 billion, reflecting sustained client trust and confidence in CGI’s expertise. Despite a challenging business environment, CGI’s performance underscores its solid market positioning and commitment to supporting clients’ business objectives.