One-glance verdict
Undervalued
$187.88 our estimate vs market $73.65
Wall Street consensus: $83.54 (-55.5% lower than our fair-value estimate)
61% below our estimate, below the bear case
Fundamentals snapshot
CGI Inc.
GIB · NYQ · Technology · Information Technology Services
Current price
$73.65
52-week range
$59.63 - $97.11
Market cap
$15.25B
Balance sheet
Watch
21.94x Strong cushion
Net debt $2.77B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 8.4% last year.
- Reward Returns 17.0% on equity, ahead of 33% of its peers.
- Risk Net debt grew 16.4% over 3 years.
- Risk Operating margin compressed from 16.2% to 16.2% over 3 years.
What this company does
CGI Inc.
CGI is a global technology consulting company that helps other businesses and governments manage their computer systems and software. The company earns most of its money from long-term contracts to provide these essential services, which creates a steady stream of recurring revenue (predictable income from ongoing client agreements). This business model is important because it makes CGI's sales less dependent on one-time projects and more stable over time.
How the company got here
CGI started in 1976 in a basement in Quebec, Canada, with just two founders. Their growth strategy, which they call “Build and Buy,” involves winning new projects while also purchasing other companies to expand their reach and skills. A few key acquisitions were transformative: buying American Management Systems (AMS) in 2004 doubled their U.S. presence, and acquiring Stanley Inc. in 2010 deepened their work with the U.S. government. The biggest turning point was buying Logica, a large European competitor, in 2012, which more than doubled their workforce and made them one of the world's largest independent IT firms.
What it actually does
Think of CGI as a team of expert mechanics and advisors for the complex technology and business operations of huge organizations like governments, banks, and healthcare providers. They don't sell physical products you'd see in a store; instead, they provide services to help these large entities run more smoothly. This could mean anything from building a new online system for a government agency to managing a bank's entire computer network or providing advice on how to become more efficient. Their main goal is to handle the complicated tech and business processes so their clients can focus on their own core missions.
Managed IT and Business Services
This is CGI's largest line of business, making up more than half of its revenue. In this area, clients hire CGI to take over and run a part of their operations on a long-term basis, a practice known as outsourcing (hiring an outside firm to handle internal tasks). For example, a company might pay CGI to manage its cybersecurity, run its payroll systems, or handle its customer service centers. This provides CGI with a steady and predictable stream of income because these are often multi-year contracts.
Systems Integration and Consulting
This part of the business is focused on specific, project-based work rather than long-term management. Here, a client hires CGI to solve a particular problem or build something new, like creating a custom software application, upgrading an old computer system, or advising on a major business change. For instance, a city government might hire CGI to build a new public transportation app or a manufacturing company might ask for help making its supply chain (the network for producing and delivering products) more efficient. This work is less predictable than managed services but allows CGI to solve a wide variety of client challenges.
What management is betting on now
The company's core strategy continues to be what they call “Build and Buy.” The “Build” part focuses on deepening relationships with current clients and selling them more services, particularly in high-demand areas like artificial intelligence, cloud computing, and cybersecurity. The “Buy” part involves continuing to acquire smaller, specialized companies to quickly gain new technologies and expertise. Management is essentially betting that by combining steady growth from existing customers with strategic purchases, they can stay ahead in the rapidly changing technology landscape.
Price history
How the share price has moved
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Is it cheap or expensive?
Fair value $187.88 vs current price $73.65
Wall Street consensus is the average analyst price target: $83.54 (-55.5% lower than our fair-value estimate).
Our most-likely fair value is $187.88 a share — about 155.1% above today's price of $73.65, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Watch
Net debt $2.8B. Interest coverage 21.9x.
Net debt
$2.77B
Interest coverage
21.94x
CGI Inc.'s profit covers its interest bill about 21.9 times over. which is stronger than most peers shown here.
Watch
Worse cushion
Baseline
Better cushion
GIB
BASELINE
CGI Inc.
Total debt $3.23B Interest coverage 21.94x This is the baseline the peer rows are being compared against.
Total debt $8.39B Interest coverage 47.43x +116% vs GIB Carries about 2.2x more debt cushion than GIB.
Total debt $2.09B Interest coverage 89.92x +310% vs GIB Carries about 4.1x more debt cushion than GIB.
Total debt $6.58B Interest coverage 10.34x -53% vs GIB Carries about 2.1x less debt cushion than GIB.
Total debt $5.38B Interest coverage 4.27x -81% vs GIB Carries about 5.1x less debt cushion than GIB.
Total debt $923.00M Interest coverage 87.00x +296% vs GIB Carries about 4.0x more debt cushion than GIB.
What you should know
The case for and against GIB
3 Rewards
2 Risks
Rewards
-
Revenue grew 8.4% last year.
-
Returns 17.0% on equity, ahead of 33% of its peers.
-
Free cash flow was positive in 4/10 years.
Risks
-
Net debt grew 16.4% over 3 years.
-
Operating margin compressed from 16.2% to 16.2% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
12.68x
Forward P/E
10.43x
P/B
2.06x
P/S
0.93x
EV/EBITDA
6.47x
PEG ratio
1.04x
Profitability
How much profit each dollar creates
Gross margin
20.4%
Operating margin
16.2%
Net margin
10.5%
ROE
17.0%
ROA
8.7%
Health
Liquidity and balance-sheet strength
Debt / equity
0.44x
Current ratio
0.94x
Quick ratio
0.69x
Total debt
$3.23B
Total cash
$457.78M
Growth
How the business has been compounding
Revenue TTM
$11.88B
Revenue 5Y CAGR
7.3%
EPS TTM
5.81
EPS 5Y CAGR
6.8%
Cash flow
How much cash the business throws off
Operating CF TTM
$1.61B
Free CF TTM
$1.42B
FCF margin
11.9%
Dividend
Shareholder payout
Yield
0.7%
Payout ratio
8.2%
Last ex-div date
2026-08-14