TSX:GIB.A

Stock Analysis Report

Executive Summary

CGI Inc., together with its subsidiaries, provides information technology (IT) and business process services in Canada, Northern Europe, France, the United States, the United Kingdom, Europe, and the Asia Pacific.


Snowflake Analysis

Flawless balance sheet with proven track record.


Similar Companies

Share Price & News

How has CGI's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: GIB.A has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.9%

GIB.A

-1.0%

CA IT

0.7%

CA Market


1 Year Return

15.0%

GIB.A

13.9%

CA IT

5.4%

CA Market

Return vs Industry: GIB.A exceeded the Canadian IT industry which returned 13.9% over the past year.

Return vs Market: GIB.A exceeded the Canadian Market which returned 5.4% over the past year.


Shareholder returns

GIB.AIndustryMarket
7 Day-0.9%-1.0%0.7%
30 Day-10.1%-9.7%1.1%
90 Day-6.5%-6.1%4.4%
1 Year15.0%15.0%13.9%13.9%8.7%5.4%
3 Year60.6%60.6%57.8%57.6%16.8%6.2%
5 Year86.7%86.7%86.4%86.0%34.7%15.1%

Price Volatility Vs. Market

How volatile is CGI's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is CGI undervalued compared to its fair value and its price relative to the market?

21.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: GIB.A (CA$101.23) is trading below our estimate of fair value (CA$129.6)

Significantly Below Fair Value: GIB.A is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: GIB.A is good value based on its PE Ratio (22.1x) compared to the IT industry average (32.7x).

PE vs Market: GIB.A is poor value based on its PE Ratio (22.1x) compared to the Canadian market (15.9x).


Price to Earnings Growth Ratio

PEG Ratio: GIB.A is poor value based on its PEG Ratio (3.4x)


Price to Book Ratio

PB vs Industry: GIB.A is overvalued based on its PB Ratio (3.8x) compared to the CA IT industry average (3x).


Next Steps

Future Growth

How is CGI forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

6.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: GIB.A's forecast earnings growth (6.4% per year) is above the savings rate (1.4%).

Earnings vs Market: GIB.A's earnings (6.4% per year) are forecast to grow slower than the Canadian market (10.8% per year).

High Growth Earnings: GIB.A's earnings are forecast to grow, but not significantly.

Revenue vs Market: GIB.A's revenue (3.3% per year) is forecast to grow slower than the Canadian market (4.9% per year).

High Growth Revenue: GIB.A's revenue (3.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: GIB.A's Return on Equity is forecast to be low in 3 years time (15.9%).


Next Steps

Past Performance

How has CGI performed over the past 5 years?

5.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: GIB.A has high quality earnings.

Growing Profit Margin: GIB.A's current net profit margins (10.2%) are higher than last year (10%).


Past Earnings Growth Analysis

Earnings Trend: GIB.A's earnings have grown by 5.7% per year over the past 5 years.

Accelerating Growth: GIB.A's earnings growth over the past year (6.4%) exceeds its 5-year average (5.7% per year).

Earnings vs Industry: GIB.A earnings growth over the past year (6.4%) underperformed the IT industry 12%.


Return on Equity

High ROE: GIB.A's Return on Equity (17.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is CGI's financial position?


Financial Position Analysis

Short Term Liabilities: GIB.A's short term assets (CA$3.7B) exceed its short term liabilities (CA$3.5B).

Long Term Liabilities: GIB.A's short term assets (CA$3.7B) exceed its long term liabilities (CA$3.3B).


Debt to Equity History and Analysis

Debt Level: GIB.A's debt to equity ratio (30.2%) is considered satisfactory.

Reducing Debt: GIB.A's debt to equity ratio has reduced from 46.9% to 30.2% over the past 5 years.

Debt Coverage: GIB.A's debt is well covered by operating cash flow (79.7%).

Interest Coverage: GIB.A's interest payments on its debt are well covered by EBIT (29.1x coverage).


Balance Sheet

Inventory Level: GIB.A has a low level of unsold assets or inventory.

Debt Coverage by Assets: GIB.A's debt is covered by short term assets (assets are 1.7x debt).


Next Steps

Dividend

What is CGI's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate GIB.A's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate GIB.A's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if GIB.A's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if GIB.A's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of GIB.A's dividend in 3 years as they are not forecast to pay a notable one for the Canadian market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.1yrs

Average management tenure


CEO

George Schindler (56yo)

3.3yrs

Tenure

CA$10,352,766

Compensation

Mr. George D. Schindler has been the Chief Executive Officer, President and Director at CGI Group Inc. since October 1, 2016. Mr. Schindler served as the Chief Operating Officer at CGI Group Inc. since May ...


CEO Compensation Analysis

Compensation vs Market: George's total compensation ($USD7.83M) is about average for companies of similar size in the Canadian market ($USD6.78M).

Compensation vs Earnings: George's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Serge Godin
Founder & Executive Chairman of the Board0.08yrsCA$14.11mno data
Julie Godin
Co-Chair of the Board and Executive VP of Strategic Planning & Corporate Development0.08yrsno data0.0027% CA$745.8k
George Schindler
President3.3yrsCA$10.35m0.011% CA$3.0m
André Imbeau
Co-Founder & Director44.1yrsno data1.28% CA$350.5m
François Boulanger
Executive VP & CFO5.3yrsCA$3.41m0.0070% CA$1.9m
David Henderson
President of United States Operations - Private Sector & Local Government2.3yrsCA$2.22m0.0035% CA$962.4k
Jean-Michel Baticle
President of Western & Southern Europe Operations0yrsCA$2.36mno data
Anne-Marie Poupart
Senior VP & Chief Information Officer1.1yrsno datano data
Lorne Gorber
Executive Vice-President of Investor & Public Relations5.1yrsno data0.0029% CA$803.4k
Benoit Dubé
Executive VP of Legal & Economic Affairs and Corporate Secretary9.7yrsno data0.0029% CA$806.1k

5.1yrs

Average Tenure

62.5yo

Average Age

Experienced Management: GIB.A's management team is seasoned and experienced (5.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Serge Godin
Founder & Executive Chairman of the Board0.08yrsCA$14.11mno data
Julie Godin
Co-Chair of the Board and Executive VP of Strategic Planning & Corporate Development0.08yrsno data0.0027% CA$745.8k
George Schindler
President3.3yrsCA$10.35m0.011% CA$3.0m
André Imbeau
Co-Founder & Director44.1yrsno data1.28% CA$350.5m
Michael Roach
Director13.7yrsCA$210.00k0.35% CA$97.2m
Paule Doré
Independent Director25.1yrsCA$230.00k0.020% CA$5.5m
Richard Evans
Independent Director10.4yrsCA$310.10k0.0037% CA$1.0m
Timothy Hearn
Lead Director1.1yrsCA$260.00k0.010% CA$2.9m
Joakim Westh
Independent Director6.8yrsCA$454.97k0.0033% CA$893.8k
Gilles Labbé
Independent Director10.1yrsCA$230.00k0.0056% CA$1.5m

8.4yrs

Average Tenure

67.5yo

Average Age

Experienced Board: GIB.A's board of directors are considered experienced (8.4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: GIB.A insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

CGI Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: CGI Inc.
  • Ticker: GIB.A
  • Exchange: TSX
  • Founded: 1976
  • Industry: IT Consulting and Other Services
  • Sector: Software
  • Market Cap: CA$27.418b
  • Shares outstanding: 268.33m
  • Website: https://www.cgi.com

Number of Employees


Location

  • CGI Inc.
  • 1350 René-Lévesque Boulevard West
  • 15th Floor
  • Montreal
  • Quebec
  • H3G 1T4
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
GIBNYSE (New York Stock Exchange)YesClass A SharesUSUSDAug 1988
GIB.ATSX (The Toronto Stock Exchange)YesClass A SharesCACADAug 1988
CJ5ADB (Deutsche Boerse AG)YesClass A SharesDEEURAug 1988
0A18LSE (London Stock Exchange)YesClass A SharesGBCADAug 1988

Biography

CGI Inc., together with its subsidiaries, provides information technology (IT) and business process services in Canada, Northern Europe, France, the United States, the United Kingdom, Europe, 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, management, 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, financial services, health, utility, communication, oil and gas, manufacturing, retail and consumer service, transportation, and post 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. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/20 00:05
End of Day Share Price2020/02/19 00:00
Earnings2019/12/31
Annual Earnings2019/09/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.