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CGI
(TSX:GIB.A)
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Rating:75Outperform
Price Target:
C$116.00
▲(12.72% Upside)
Action:Reiterated
Date:08/02/26
The score is driven primarily by strong financial performance (durable profitability, strong ROE, and excellent free cash flow) and a constructive earnings-call setup (healthy bookings/backlog and expanding pipeline). Valuation is supportive with a moderate P/E, while technicals are mixed (above key shorter-term averages but still below the 200-day), limiting the upside to the overall score.
Positive Factors
Large backlog and recurring Managed Services demand
The substantial backlog provides multi-period revenue visibility, while strong Managed Services bookings support recurring, contract-based revenue. This mix can reduce dependence on short-cycle project demand and improve business resilience.
Negative Factors
Limited organic growth and acquisition dependence
Growth largely dependent on acquisitions can make expansion less self-sustaining and increase integration demands. If acquired businesses do not cross-sell effectively, CGI may face slower underlying growth and greater reliance on M&A execution.
Read all positive and negative factors
Positive Factors
Negative Factors
Large backlog and recurring Managed Services demand
The substantial backlog provides multi-period revenue visibility, while strong Managed Services bookings support recurring, contract-based revenue. This mix can reduce dependence on short-cycle project demand and improve business resilience.
Read all positive factors
CGI (GIB.A) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$19.49B
Dividend Yield0.71%
Average Volume (3M)536.42K
Price to Earnings (P/E)11.8
Beta (1Y)0.56
Revenue Growth5.67%
EPS Growth6.31%
CountryCA
Employees94,000
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)8.10
Shares Outstanding182,952,650
10 Day Avg. Volume448,029
30 Day Avg. Volume536,420
Financial Highlights & Ratios
PEG Ratio-17.88
Price to Book (P/B)2.72
Price to Sales (P/S)1.76
P/FCF Ratio13.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$113.43Price Target Upside10.22% Upside
Rating ConsensusHold
Number of Analyst Covering7
EPS Forecast (FY)8.98
Revenue Forecast (FY)C$16.56B
CGI Business Overview & Revenue Model
Company Description
Founded in Montreal, Canada, in 1976, CGI Inc. stands as a prominent global firm specializing in information technology (IT) and business process services. Its extensive geographic footprint covers Canada, the United States, the United Kingdom, va...
How the Company Makes Money
CGI makes money primarily by selling IT and business services to enterprises and government clients under contracted engagements. Its revenue model is largely B2B/B2G and is driven by (1) professional services (e.g., consulting, systems integratio...
CGI Earnings Call Summary
Earnings Call Date:Jul 29, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Nov 11, 2026
Earnings Call Sentiment Positive
The call conveyed a broadly positive operational and financial picture: revenue and adjusted EBIT grew modestly, EPS accreted materially, cash generation and balance sheet flexibility remain strong, and the opportunity pipeline (especially AI-embedded and Managed Services) expanded significantly. Headwinds are present but contained — limited organic growth beyond acquisition contribution in the quarter, a slight SI&C softness and some client caution around AI compute costs and timing. Management emphasized disciplined capital allocation, active M&A pipeline and strong hiring to staff expected ramps. On balance the positives (pipeline growth, cash, bookings, client wins and EPS accretion) significantly outweigh the contained challenges.Positive Updates
Quarterly Revenue Growth
Revenue of $4.2B in Q3, up 2.5% year-over-year (up 1.3% excluding foreign exchange). Growth was supported by acquisitions (approximately +2.5%) and strong organic performance in APAC (+9.7%) and Western & Southern Europe (+8.6%, including Apside). U.S. Federal delivered year-over-year organic growth of +2.5%.
Negative Updates
Modest Organic Growth and Acquisition Contribution
Reported revenue growth of 2.5% YoY was primarily driven by recent acquisitions (~2.5% contribution), implying limited organic growth in the quarter after adjusting for inorganic contribution and FX.
Read all updates
Q3-2026 Updates
Positive
Negative
Quarterly Revenue Growth
Revenue of $4.2B in Q3, up 2.5% year-over-year (up 1.3% excluding foreign exchange). Growth was supported by acquisitions (approximately +2.5%) and strong organic performance in APAC (+9.7%) and Western & Southern Europe (+8.6%, including Apside). U.S. Federal delivered year-over-year organic growth of +2.5%.
Read all positive updates
Company Guidance
Management's forward-looking guidance emphasized continued momentum and specific financial and operational targets: an expected effective tax rate of about 26%–27% for future quarters, contracted backlog of $31.8 billion (1.9x revenue) with just over $12 billion to be realized in the next 12 months (backlog +5% vs Q2), Q3 bookings of $4.2 billion (book‑to‑bill 100%) and trailing‑12‑month bookings of $17.8 billion (trailing book‑to‑bill ~108%), with Managed Services book‑to‑bill at 115% (trailing 12‑month Managed Services wins $10.3 billion) and SI&C at 100%; the opportunity pipeline is up materially (Managed Services pipeline +20% YoY, SI&C opportunities +30%+, IP pipeline +30%+, total 12‑month pipeline +10% YoY and AI‑embedded opportunities near $10 billion), hiring is accelerating (+10% sequential, +50% YoY), and balance‑sheet/capital priorities remain strong (net debt leverage just over 1, ~$3.2 billion capital resources) with Q3 cash from operations $605 million (14.4% of revenue), TTM cash from operations $2.6 billion (15.8% of revenue) and Q3 capital deployment including ~$105M in investments, $50M in acquisitions, $413M of buybacks and $36M in dividends (Board approved $0.17/share quarterly dividend payable Sept. 18).CGI Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
74
Positive
Cash Flow
83
Very Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 16.43B | 15.91B | 14.68B | 14.30B | 12.87B | 12.13B |
| Gross Profit | 3.35B | 3.29B | 3.01B | 2.88B | 2.60B | 2.50B |
| EBITDA | 3.02B | 2.52B | 2.61B | 2.51B | 2.28B | 2.14B |
| Net Income | 1.73B | 1.66B | 1.69B | 1.63B | 1.47B | 1.37B |
Balance Sheet | ||||||
| Total Assets | 19.58B | 19.52B | 16.69B | 15.80B | 15.18B | 15.02B |
| Cash, Cash Equivalents and Short-Term Investments | 633.42M | 867.88M | 1.46B | 1.58B | 972.64M | 1.70B |
| Total Debt | 4.34B | 4.47B | 3.32B | 3.74B | 3.98B | 4.22B |
| Total Liabilities | 9.44B | 9.24B | 7.26B | 7.49B | 7.90B | 8.03B |
| Stockholders Equity | 10.15B | 10.28B | 9.43B | 8.31B | 7.27B | 6.99B |
Cash Flow | ||||||
| Free Cash Flow | 2.43B | 2.12B | 2.10B | 1.81B | 1.57B | 1.88B |
| Operating Cash Flow | 2.59B | 2.23B | 2.20B | 2.11B | 1.86B | 2.12B |
| Investing Cash Flow | -796.31M | -2.20B | -775.38M | -561.86M | -911.95M | -397.55M |
| Financing Cash Flow | -2.21B | -246.66M | -1.61B | -1.19B | -1.59B | -1.65B |
CGI Technical Analysis
Negative
102.91
Price Trends
99.10
Negative
95.84
Negative
104.15
Negative
Market Momentum
-0.54
Positive
38.59
Neutral
7.97
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:GIB.A, the sentiment is Negative. The current price of 102.91 is above the 20-day moving average (MA) of 101.65, above the 50-day MA of 99.10, and below the 200-day MA of 104.15, indicating a bearish trend. The MACD of -0.54 indicates Positive momentum. The RSI at 38.59 is Neutral, neither overbought nor oversold. The STOCH value of 7.97 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:GIB.A.
CGI Peers Comparison
UnderperformOutperform
Sector (61)
TSE:GIB.A
CGI
95.71
-33.77
-26.08%
TSE:ALYA
Alithya Group
1.15
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TSE:PVT
Pivotree
1.15
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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.