CGI Group (GIB.A), one of the world’s largest IT and business consulting firms, posted a 30% rise in profit in its third quarter but failed to meet analysts’ expectations.
Revenue came in at C$3.02 billion in the three months ended June 30, a decline of 1% from C$3.05 billion in the prior-year quarter. Excluding currency effects, revenue increased 3.5% year-over-year.
Meanwhile, profit amounted to C$338.5 million (C$1.36 per share) in Q3 2021, up from C$260.9 million (C$1.00 per share) in Q3 2020.
On an adjusted basis, profit was C$339 million (C$1.36 per share), compared with a profit of C$308.4 million (C$1.18 per share) a year earlier.
CGI was expected to report C$340.1 million in adjusted profits on nearly C$3.07 billion in revenue.
CGI’s President and CEO George D. Schindler said, “In the quarter, we had constant currency revenue growth as demand for our services to meet clients’ digital agendas continues to accelerate. With robust bookings and cash from operations, we remain well positioned to continue driving profitable growth in the future.”
Bookings amounted to C$3.63 billion in the third quarter of fiscal 2021, up 28% year-over-year, and represented a book-to-bill ratio of 120%. (See CGI Group stock charts on TipRanks)
Last week, BMO Capital analyst Thanos Moschopoulos reiterated a Buy rating on GIB.A while raising his price target to C$128.00 (from C$121.00). This implies 11.8% upside potential.
Overall, consensus on the Street is that GIB.A is a Strong Buy based on 8 Buys and 1 Hold. The average CGI Group price target of C$122.66 implies an upside potential of about 7.2% to current levels.
TipRanks’ Smart Score
GIB.A scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock is likely to outperform the overall market.
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