Capgemini (ENXTPA:CAP) Valuation in Focus as Investors Reassess Prospects

Capgemini (ENXTPA:CAP) shares have moved modestly, with little in the way of major headlines to spark a dramatic shift. Still, recent investor interest hints at ongoing curiosity about valuations as the company continues to navigate current market conditions.

See our latest analysis for Capgemini.

After a tough stretch earlier this year, Capgemini’s 1-day and 7-day share price returns of 0.8% and 3.9% hint at a bit of renewed momentum. Still, with total shareholder return down 25.8% over the past year, many investors are weighing if recent gains reflect early signs of optimism or simply market volatility.

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With shares still trading at a notable discount to analyst targets and annual profit growth outpacing revenue, the real question is whether Capgemini’s recent momentum signals a true buying opportunity or if the market is already factoring in future gains.

Most Popular Narrative: 24% Undervalued

Capgemini’s widely-followed narrative fair value points to significant upside from the last close, suggesting the market has not fully embraced its long-term profit outlook. As shares change hands below the projected price, investor attention is focused on the fundamental drivers and their durability over time.

Capgemini's expanding leadership and strong deal wins in advanced cloud, data, and artificial intelligence (including Gen AI and Agentic AI) are positioning the company to benefit from the accelerating client demand for digital transformation. This supports a pipeline for higher-value, higher-margin contracts that should drive long-term revenue and margin expansion.

Read the complete narrative.

Are analysts reaching for the stars with their ambitious growth blueprint? The model incorporates relentless expansion in key verticals, persistent operating leverage, and a profit trajectory designed for a digital future. Curious about the specific financial forecasts and the forward PE ratio powering this bold valuation? Click through to discover what is fueling the optimism beneath the headline number.

Result: Fair Value of €169.57 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent revenue softness across Europe and rising restructuring costs could challenge Capgemini’s forecasted growth and potentially alter the optimistic outlook.

Find out about the key risks to this Capgemini narrative.

Another View: What Do Market Ratios Say?

Looking at Capgemini’s current price-to-earnings ratio of 14x, it appears expensive compared to the peer average of 11.6x. However, when measured against the broader European IT industry average of 19.3x and a fair ratio of 27x, the stock seems attractively priced. These gaps highlight both potential risks and opportunities. Are market perceptions missing something, or is caution still warranted?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Capgemini Narrative

If the current narrative does not fit your perspective or you enjoy diving into the numbers yourself, you can quickly shape your own in just a few minutes, and Do it your way.

A great starting point for your Capgemini research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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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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