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Sodexo SA
(OTC:SDXAY)
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Rating:59Neutral
Price Target:
$14.00
â–²(4.63% Upside)
Action:Reiterated
Date:10/24/26
SDXAY scores in the upper-middle range primarily due to steady, positive cash flow generation, but is held back by earnings volatility and a moderately leveraged balance sheet. Technicals are constructive with price above major moving averages, though momentum signals are mixed. Valuation is balanced by a strong dividend yield but a higher P/E, while the latest earnings call supports a modest outlook with stable margins yet notable near-term execution and cost headwinds.
Positive Factors
Recurring contract model
Sodexo’s multi-year contracts create recurring revenue across food services and facilities management, supporting visibility beyond individual transactions. Client-site operations, service-level agreements, procurement scale, and renewal relationships can provide a durable base for cash generation and cross-selling.
Negative Factors
Below-peer client retention
Retention below competitors creates a durable commercial challenge because lost contracts reduce recurring revenue and require replacement sales effort. Improving retention may also require service changes, leadership attention, and investment, potentially limiting growth and margins while the issue persists.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring contract model
Sodexo’s multi-year contracts create recurring revenue across food services and facilities management, supporting visibility beyond individual transactions. Client-site operations, service-level agreements, procurement scale, and renewal relationships can provide a durable base for cash generation and cross-selling.
Read all positive factors
Sodexo SA (SDXAY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$9.84B
Dividend Yield4.7%
Average Volume (3M)1.74K
Price to Earnings (P/E)28.8
Beta (1Y)0.45
Revenue Growth5.38%
EPS Growth-53.21%
CountryUS
Employees443,000
SectorIndustrials
Sector Strength72
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)0.41
Shares Outstanding737,274,400
10 Day Avg. Volume0
30 Day Avg. Volume1,735
Financial Highlights & Ratios
PEG Ratio-0.46
Price to Book (P/B)2.23
Price to Sales (P/S)0.36
P/FCF Ratio15.69
Enterprise Value/Market Cap1.42
Enterprise Value/Revenue0.59
Enterprise Value/Gross Profit5.53
Enterprise Value/Ebitda10.86
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.76
Revenue Forecast (FY)$28.24B
Sodexo SA Business Overview & Revenue Model
Company Description
Sodexo S.A. operates as a global service provider, delivering a comprehensive range of on-site management, employee benefits and rewards, and personal and home care solutions around the world. The company's on-site operations cater to diverse clie...
How the Company Makes Money
Sodexo makes money mainly through multi-year business-to-business (and public sector) service contracts in which it operates client sites and delivers agreed service levels. Revenue is primarily generated from (1) Food Services: Sodexo manages caf...
Sodexo SA Earnings Call Summary
Earnings Call Date:Oct 23, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Apr 02, 2027
Earnings Call Sentiment Positive
The call had a cautiously positive tone. Fiscal 2026 finished above expectations on organic growth, cash flow, leverage, and fourth-quarter execution, while management reported tangible progress on the Shift & Grow transformation, pipeline development, and strategic initiatives such as Entegra, Meta, and data centers. However, the company continues to face below-competitor retention, negative North American growth, a 130-basis-point margin decline, restructuring and investment costs, higher financial expense, and a soft start expected for fiscal 2027. Highlights outweighed the lowlights, but management emphasized that the transformation remains demanding and that execution must improve quarter after quarter.Positive Updates
Revenue and Organic Growth Beat Latest Guidance
Fiscal 2026 revenue was close to EUR 24 billion, with organic growth of +2%, above the latest guidance due to a stronger-than-expected fourth quarter. Fourth-quarter organic growth was 2.6%.
Negative Updates
Underlying Operating Margin Declined 130 Basis Points
Underlying operating margin was 3.4%, down 130 basis points. The decline reflected approximately 50 basis points from the contract and asset review, around 30 basis points from higher operating expenses for commercial capabilities, supply chain, and technology, and around 50 basis points from operations.
Read all updates
Q4-2026 Updates
Positive
Negative
Revenue and Organic Growth Beat Latest Guidance
Fiscal 2026 revenue was close to EUR 24 billion, with organic growth of +2%, above the latest guidance due to a stronger-than-expected fourth quarter. Fourth-quarter organic growth was 2.6%.
Read all positive updates
Company Guidance
For fiscal 2027, Sodexo expects organic growth of between +2% and +3%, with a minimum price increase of 2%, a net new contribution between 0.5% and 1%, like-for-like volume neutral to maybe slightly positive, and the North American contract reclassification impacting growth by around 30-35 basis points for the year and 100 basis points for Q1; organic growth is expected to start below the full year range and build progressively through the year, while the underlying operating margin is expected to be broadly in line with the 3.4% achieved in fiscal 2026, with H1 margin potentially slightly softer and H2 margin potentially slightly stronger. Other operating income and expenses are expected to represent a net expense of around EUR 240 million, including approximately EUR 190 million of restructuring cost; net financial expense is expected to be around EUR 190 million, leverage between 2.6x and 2.8x, and most of the remaining restructuring cash impact is expected in fiscal 2027, with a residual amount in fiscal 2028. Across the cycle, capital expenditure is expected to be between 2.5% and 3% of revenue, working capital is expected to be broadly neutral, and EUR 500 million-EUR 600 million is planned for technology and data as a cumulative investment through fiscal 2030; fiscal 2030 ambitions remain organic growth above 5%, net new business above 3%, and underlying operating margin above 5%.Sodexo SA Financial Statement Overview
Summary
Income Statement
58
Neutral
Balance Sheet
52
Neutral
Cash Flow
63
Positive
| Breakdown | Aug 2026 | Aug 2025 | Aug 2024 | Aug 2023 | Aug 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 23.66B | 22.60B | 23.80B | 22.64B | 21.13B |
| Gross Profit | 2.51B | 2.63B | 2.85B | 2.72B | 3.04B |
| EBITDA | 1.31B | 1.55B | 1.65B | 1.38B | 1.30B |
| Net Income | 300.13M | 763.76M | 168.00M | 794.00M | 695.00M |
Balance Sheet | |||||
| Total Assets | 14.53B | 17.38B | 15.02B | 20.79B | 20.92B |
| Cash, Cash Equivalents and Short-Term Investments | 1.13B | 2.45B | 2.14B | 2.02B | 3.23B |
| Total Debt | 4.66B | 6.37B | 5.47B | 6.38B | 6.66B |
| Total Liabilities | 10.75B | 12.93B | 11.23B | 16.24B | 16.50B |
| Stockholders Equity | 3.77B | 4.43B | 3.78B | 4.54B | 4.42B |
Cash Flow | |||||
| Free Cash Flow | 536.08M | 592.32M | 962.00M | 1.04B | 690.00M |
| Operating Cash Flow | 895.44M | 904.90M | 1.32B | 1.38B | 1.03B |
| Investing Cash Flow | -426.49M | -366.00M | -1.05B | -526.00M | -386.00M |
| Financing Cash Flow | -1.44B | -498.00M | -1.35B | -646.00M | -1.11B |
Sodexo SA Technical Analysis
Positive
13.38
Price Trends
12.94
Positive
12.59
Positive
11.47
Positive
Market Momentum
0.07
Negative
65.36
Neutral
85.15
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SDXAY, the sentiment is Positive. The current price of 13.38 is above the 20-day moving average (MA) of 12.52, above the 50-day MA of 12.94, and above the 200-day MA of 11.47, indicating a bullish trend. The MACD of 0.07 indicates Negative momentum. The RSI at 65.36 is Neutral, neither overbought nor oversold. The STOCH value of 85.15 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SDXAY.
Sodexo SA Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $88.98B | 43.68 | 42.08% | 0.83% | 9.51% | 12.19% | |
69 Neutral | $3.15B | 19.31 | 9.44% | 2.16% | 6.00% | 50.32% | |
65 Neutral | $4.89B | 44.65 | 4.99% | 0.52% | 3.75% | -24.28% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | $13.86B | 36.00 | 11.75% | 0.91% | 11.02% | 6.21% | |
59 Neutral | $9.84B | 28.82 | 8.26% | 4.70% | 5.38% | -53.21% | |
57 Neutral | $11.41B | 24.03 | 5.82% | 2.79% | 2.92% | 43.13% |
* Industrials Sector Average
SDXAY
Sodexo SA
13.43
2.07
18.20%
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22.14%
CTAS
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225.93
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20.95%
UNF
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279.64
122.84
78.35%
ARMK
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54.39
14.70
37.04%
RTO
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22.61
-6.19
-21.49%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.