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CGI Inc. (TSE:GIB.A)
:GIB.A
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CGI
(NYSE:GIB.A)
Select Model
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Rating:79Outperform
Price Target:
C$147.00
▲(17.30% Upside)
CGI's strong financial performance and positive earnings call sentiment are the primary drivers of its high score. The company's strategic acquisitions and focus on AI integration are promising for future growth. While technical indicators suggest a bullish trend, caution is advised due to potential overbought conditions. Valuation metrics indicate a fair market price, with limited dividend yield.
Positive Factors
Revenue Growth
Strong revenue growth indicates effective market strategies and increased demand for CGI's services, supporting long-term expansion.
Robust Bookings and Backlog
High bookings and backlog ensure future revenue streams, reflecting strong client demand and operational efficiency.
AI Strategy and Development
AI integration enhances service offerings and operational efficiency, positioning CGI for competitive advantage and future growth.
Negative Factors
Federal Shutdown Impact
The shutdown poses risks to revenue and margins, highlighting vulnerability to external political factors affecting U.S. operations.
Increased DSO
Higher DSO indicates slower cash collection, potentially straining working capital and affecting liquidity management.
Restructuring and Acquisition Costs
Significant restructuring costs can pressure net earnings, impacting short-term financial performance and requiring careful cost management.
CGI (GIB.A) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$27.13B
Dividend Yield0.5%
Average Volume (3M)561.88K
Price to Earnings (P/E)16.8
Beta (1Y)0.53
Revenue Growth8.43%
EPS Growth0.25%
CountryCA
Employees94,000
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)2.13
Shares Outstanding195,029,300
10 Day Avg. Volume514,003
30 Day Avg. Volume561,884
Financial Highlights & Ratios
PEG Ratio0.00
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$146.49Price Target Upside16.89% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
CGI Business Overview & Revenue Model
Company DescriptionCGI 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 MoneyCGI generates revenue primarily through its consulting and IT services, which include project-based and recurring revenue models. The company earns money by providing tailored solutions to clients, often through multi-year contracts that ensure a steady income stream. Key revenue streams include systems integration projects, application management services, and outsourcing services. Additionally, CGI benefits from strategic partnerships with technology leaders that enhance its service offerings and market reach. The company also has a significant presence in the public sector, which provides a consistent source of revenue through government contracts. Overall, CGI's revenue model is supported by its diversified client base and the growing demand for digital transformation services across industries.
CGI Earnings Call Summary
Earnings Call Date:Nov 05, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Jan 28, 2026
Earnings Call Sentiment Neutral
CGI reported strong revenue growth and robust bookings, driven by strategic acquisitions and demand for managed services. However, challenges such as the impact of the U.S. federal shutdown, increased DSO, and significant restructuring costs were noted.Q4-2025 Updates
Positive Updates
Strong Revenue Growth
CGI delivered $4 billion of revenue in Q4, up 9.7% year-over-year, or 5.5% when excluding the impact of foreign exchange.
Robust Bookings and Backlog
Bookings in Q4 reached $4.8 billion with a book-to-bill ratio of 119%. The contracted backlog was $31.5 billion, equating to 2x revenue.
Managed Services Demand
Managed services showed strong demand with a 6% growth in constant currency, and a book-to-bill ratio of 120%.
Dividend Increase
CGI's Board approved a 13% increase in the quarterly cash dividend to $0.17 per share.
AI Strategy and Development
CGI emphasized its AI-driven strategy, incorporating AI into its consulting, systems integration, and managed services to drive efficiency and innovation.
Negative Updates
Federal Shutdown Impact
The U.S. federal government shutdown is expected to impact CGI's next quarter revenue by $60 million to $75 million and margin by $15 million to $22 million.
Increased DSO
Days Sales Outstanding (DSO) increased to 45 days compared to 41 days in the prior year, impacted by recent business acquisitions.
Restructuring and Acquisition Costs
Restructuring and acquisition-related costs amounted to $122 million, impacting net earnings.
Company Guidance
During the fourth quarter of fiscal 2025, CGI reported strong financial performance with a revenue of $4 billion, reflecting a 9.7% year-over-year increase, or 5.5% excluding foreign exchange impacts. Growth was significantly driven by the acquisition of BJSS, which boosted the U.K. operations by 28%, and continued demand for APAC delivery centers, which grew by 6.4%. The U.S. segments saw a combined growth of 5.7%, mainly due to mergers with Aeyon and Daugherty. The bookings for the quarter reached nearly $4.8 billion, leading to a book-to-bill ratio of 119%, with notable contributions from the U.S. Federal segment at 185%. The company's contracted backlog stood at $31.5 billion, approximately twice the revenue. CGI's adjusted EBIT was $667 million, marking an 11.2% year-over-year increase and yielding a margin of 16.6%. Adjusted net earnings rose to $472 million, resulting in a diluted EPS of $2.13, up by 11%. The company also generated $663 million from operations, representing 16.5% of total revenue, and allocated significant capital across various areas, including $81 million in business investments and $491 million in stock buybacks.CGI Financial Statement Overview
Summary
CGI exhibits strong financial health with consistent revenue growth and solid profitability metrics. The balance sheet reflects prudent financial management with moderate leverage. Cash flows are robust, supporting ongoing operations and potential investments. Minor areas for improvement include enhancing gross margins and equity ratios.Income Statement
CGI has demonstrated consistent revenue growth, with a TTM growth rate of 2.27%. The company maintains strong profitability with a net profit margin of 11.01% and an EBIT margin of 16.39%. However, there is a slight decline in gross profit margin over the years, indicating potential cost pressures.85
Very Positive
Balance Sheet
The balance sheet is robust, with a manageable debt-to-equity ratio of 0.43, indicating prudent financial leverage. The return on equity is solid at 17.27%, reflecting efficient use of equity. However, the equity ratio is moderate, suggesting room for strengthening the equity base.78
Positive
Cash Flow
Cash flow generation is strong, with a free cash flow growth rate of 1.50% TTM. The operating cash flow to net income ratio is healthy at 0.53, indicating good cash conversion. The free cash flow to net income ratio of 0.89 suggests efficient cash management, though slightly lower than previous years.82
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 15.91B | ― | 15.91B | 14.68B | 14.30B | 12.87B |
| Gross Profit | 3.29B | ― | 3.29B | 3.01B | 2.88B | 2.60B |
| EBITDA | 2.97B | ― | 2.52B | 2.61B | 2.51B | 2.28B |
| Net Income | 1.66B | ― | 1.66B | 1.69B | 1.63B | 1.47B |
Balance Sheet | ||||||
| Total Assets | 19.52B | ― | 19.52B | 16.69B | 15.80B | 15.18B |
| Cash, Cash Equivalents and Short-Term Investments | 867.88M | ― | 867.88M | 1.46B | 1.58B | 972.64M |
| Total Debt | 4.47B | ― | 4.47B | 3.32B | 3.74B | 3.98B |
| Total Liabilities | 9.24B | ― | 9.24B | 7.26B | 7.49B | 7.90B |
| Stockholders Equity | 10.28B | ― | 10.28B | 9.43B | 8.31B | 7.27B |
Cash Flow | ||||||
| Free Cash Flow | 2.00B | ― | 2.12B | 2.10B | 1.81B | 1.57B |
| Operating Cash Flow | 2.23B | ― | 2.23B | 2.20B | 2.11B | 1.86B |
| Investing Cash Flow | -2.20B | ― | -2.20B | -775.38M | -561.86M | -911.95M |
| Financing Cash Flow | -246.66M | ― | -246.66M | -1.61B | -1.19B | -1.59B |
CGI Technical Analysis
Neutral
125.32
Price Trends
123.35
Positive
126.92
Negative
135.75
Negative
Market Momentum
0.60
Negative
54.07
Neutral
34.14
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:GIB.A, the sentiment is Neutral. The current price of 125.32 is above the 20-day moving average (MA) of 124.34, above the 50-day MA of 123.35, and below the 200-day MA of 135.75, indicating a neutral trend. The MACD of 0.60 indicates Negative momentum. The RSI at 54.07 is Neutral, neither overbought nor oversold. The STOCH value of 34.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:GIB.A.
CGI Peers Comparison
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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.