CGI, Inc. (GIB.A) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

Comparison

Company

Score

Quality

Valuation

Financial

Technical

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TECSYS, Inc.

K-Bro Linen, Inc.

Brookfield Business Partners LP

Why is CGI, Inc. ?

High Management Efficiency with a high ROCE of 21.65%

Company's ability to service its debt is strong with a healthy EBIT to Interest (avg) ratio of 26.25

Poor long term growth as Net Sales has grown by an annual rate of 6.23% and Operating profit at 7.87% over the last 5 years

Flat results in Jun 26

INTEREST(9M) At CAD 101.33 MM has Grown at 18.69%
CASH AND EQV(HY) Lowest at CAD 1,349.46 MM
DEBT-EQUITY RATIO (HY) Highest at 36.5 %

With ROE of 19.37%, it has a very expensive valuation with a 1.87 Price to Book Value

The stock is trading at a premium compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of -21.64%, its profits have risen by 4.3% ; the PEG ratio of the company is 0.9

High Institutional Holdings at 71.57%

These investors have better capability and resources to analyse fundamentals of companies than most retail investors.
Their stake has increased by 4.11% over the previous quarter.

Consistent Underperformance against the benchmark over the last 3 years

Along with generating -21.64% returns in the last 1 year, the stock has also underperformed S&P/TSX 60 in each of the last 3 annual periods

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to CGI, Inc. should be less than 10%
Overall Portfolio exposure to Computers - Software & Consulting should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Computers - Software & Consulting)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is CGI, Inc. for you?

Medium Risk, Medium Return

Absolute

Risk Adjusted

Volatility

CGI, Inc.

-20.21%

1.02

32.05%

S&P/TSX 60

29.63%

2.33

12.07%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

6.23%

EBIT Growth (5y)

7.87%

EBIT to Interest (avg)

26.84

Debt to EBITDA (avg)

0.78

Net Debt to Equity (avg)

0.27

Sales to Capital Employed (avg)

1.19

Tax Ratio

26.63%

Dividend Payout Ratio

8.33%

Pledged Shares

Institutional Holding

67.46%

ROCE (avg)

21.54%

ROE (avg)

19.70%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

1.87

EV to EBIT

7.96

EV to EBITDA

6.46

EV to Capital Employed

1.67

EV to Sales

1.34

PEG Ratio

0.87

Dividend Yield

ROCE (Latest)

20.95%

ROE (Latest)

19.37%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Mildly Bullish

Bearish

RSI

No Signal

Bullish

Bollinger Bands

Mildly Bearish

Bearish

Moving Averages

Mildly Bearish (Daily)

KST

Bearish

Dow Theory

Mildly Bullish

OBV

No Trend

Mildly Bearish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

5What is working for the Company

OPERATING CASH FLOW(Y)

Highest at CAD 2,590.54 MM

RAW MATERIAL COST(Y)

Fallen by 1.38% (YoY

NET SALES(Q)

Highest at CAD 4,193.02 MM

EPS(Q)

Highest at CAD 2.23

-5What is not working for the Company

INTEREST(9M)

At CAD 101.33 MM has Grown at 18.69%

CASH AND EQV(HY)

Lowest at CAD 1,349.46 MM

DEBT-EQUITY RATIO (HY)

Highest at 36.5 %

Here's what is working for CGI, Inc.

Operating Cash Flow

Highest at CAD 2,590.54 MM

in the last three years

MOJO Watch

The company has generated higher cash revenues from business operations

Operating Cash Flows (CAD MM)

Net Sales

Highest at CAD 4,193.02 MM

in the last five periods

MOJO Watch

Near term sales trend is positive

Net Sales (CAD MM)

EPS

Highest at CAD 2.23

in the last five periods

MOJO Watch

Increasing profitability; company has created higher earnings for shareholders

EPS (CAD)

Raw Material Cost

Fallen by 1.38% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has improved; this may lead to a rise in profit margin

Raw Material Cost as a percentage of Sales

Here's what is not working for CGI, Inc.

Interest

At CAD 101.33 MM has Grown at 18.69%

over previous Semi-Annual period

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (CAD MM)

Cash and Eqv

Lowest at CAD 1,349.46 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is deteriorating

Cash and Cash Equivalents

Debt-Equity Ratio

Highest at 36.5 %

in the last five Semi-Annual periods

MOJO Watch

The company is borrowing more to fund its operations; it's liquidity situation may be stressed

Debt-Equity Ratio

Non Operating Income

Highest at CAD 0.02 MM

in the last five periods

MOJO Watch

Increased income from non business activities may not be sustainable

Non Operating income