Will CGI's (TSX:GIB.A) HMRC Win and US ERP Milestones Redefine Its Public Sector Ambitions?

• CGI recently announced new project milestones in Florida, where government organizations have upgraded to the CGI Advantage unified ERP platform, and also secured a contract with His Majesty's Revenue and Customs in the UK worth up to £250 million over five years to support integration and digital transformation.
• These developments underscore CGI's accelerating traction in the public sector, as it strengthens its role in digital modernization for large-scale government clients on both sides of the Atlantic.
• We'll explore how winning the UK HMRC contract could reinforce CGI's investment narrative focused on expanding digital government solutions.

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CGI Investment Narrative Recap

To hold CGI shares, investors need to believe in the company's ability to win and retain large-scale digital transformation contracts, especially with public sector agencies, as a driver for recurring, higher-margin revenue. The recent HMRC contract in the UK signals expanding traction in digital government, but it does not completely resolve the most significant near-term risk: pressure on organic revenue growth from slow enterprise decision cycles, particularly in Europe.

Among recent announcements, the significant milestones achieved with Florida government organizations using the CGI Advantage platform stand out. These highlight operational gains from automation and cloud migration in the public sector, underscoring CGI’s pursuit of secure, higher-value managed services that back the company’s key growth catalyst in digital modernization. However, even with these wins, it’s important to keep in mind that…

Read the full narrative on CGI (it's free!)

CGI's narrative projects CA$17.9 billion revenue and CA$2.3 billion earnings by 2028. This requires 4.8% yearly revenue growth and a CA$0.6 billion earnings increase from CA$1.7 billion currently.

Uncover how CGI's forecasts yield a CA$155.08 fair value, a 26% upside to its current price.

Exploring Other Perspectives

The Simply Wall St Community generated seven fair value estimates for CGI, ranging widely from CA$136.69 to CA$1,382.16 per share. While many see upside opportunity, pressure on organic growth and client spending cycles remains a key issue to watch for future performance.

Explore 7 other fair value estimates on CGI - why the stock might be a potential multi-bagger!

Build Your Own CGI Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your CGI research is our analysis highlighting 4 key rewards that could impact your investment decision.
• Our free CGI research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate CGI's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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