One-glance verdict
Undervalued
$28.29 our estimate vs market $12.87
55% below our estimate, below the bear case
Fundamentals snapshot
Sodexo S.A.
SDXAY · PNK · Industrials · Specialty Business Services
Current price
$12.87
52-week range
$9.08 - $13.69
Market cap
$9.38B
Balance sheet
Stretched
3.59x Stretched
Net debt $3.93B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 0.7% last year.
- Reward Free cash flow was positive in 4/10 years.
- Reward Trades at 26.8x P/E vs peer median 34.5x (22.4% cheaper).
- Risk Insider ownership is only 0.0% (peer median: 0.9%).
What this company does
Sodexo S.A.
Sodexo provides essential services like food and facility management to businesses and organizations globally, making them a big player in making everyday operations run smoothly. Their income mostly comes from long-term contracts for these services, which helps create steady revenue. This type of business is important because it underpins how many other companies function day-to-day.
How the company got here
Sodexo S.A. started in 1966 as a small catering company in Marseille, France, founded by Pierre Bellon. The company's initial focus was on providing food services to businesses and institutions. Over the decades, Sodexo expanded its offerings beyond just food, incorporating facilities management services like cleaning and maintenance. This diversification allowed Sodexo to grow into a global giant, serving clients across various sectors and continents. The company was formerly known as Sodexho Alliance before rebranding to Sodexo S.A. in 2008.
What it actually does
Sodexo provides essential services that help other organizations run smoothly, focusing on two main areas: food and facilities management. Think of them as the company that handles the cafeteria in your office, cleans the hospital, or manages the grounds of a university. They ensure that employees have meals, that buildings are well-maintained, and that workplaces are comfortable and efficient for the people who use them. Sodexo's services are often behind-the-scenes, but they are crucial for the daily operations of many businesses and public institutions.
Food Services
This part of Sodexo is all about providing meals and food-related services. It includes everything from running cafeterias and restaurants in corporate offices, hospitals, and schools, to offering meal delivery and even digital food ordering. They also provide meal vouchers, which are like pre-paid cards employees can use to buy food. This segment is a significant portion of Sodexo's business, ensuring people are fed in places where they might not have other convenient options.
Facilities Management
This segment covers a wide range of services that keep a client's physical environment running efficiently and safely. It includes tasks like maintaining buildings, managing energy consumption, ensuring security through access control, and performing regular cleaning. Sodexo also handles grounds maintenance, waste management, and even technical services like HVAC (heating, ventilation, and air conditioning) system upkeep. Essentially, they take care of the operational upkeep of a client's property so the client can focus on their core business.
Benefits & Experiences
Beyond core food and facilities services, Sodexo offers solutions aimed at improving the employee experience and well-being. This includes services like savings and purchasing programs, where employees can get discounts on various goods and services. They also provide advisory services and digital tools to help companies manage their operations and employee benefits more effectively. This segment focuses on making workplaces more attractive and supportive for employees.
What management is betting on now
Sodexo's current strategy focuses on strengthening its core offerings in food and facilities management while also emphasizing sustainability and digital innovation. Management is prioritizing growth in key markets and sectors, particularly in healthcare and education, where their services are in high demand. They are also investing in technology to improve service delivery and efficiency, aiming to provide more data-driven insights to clients. A significant part of their bet is on enhancing the employee experience for their clients' workforces, making workplaces more appealing and productive.
Price history
How the share price has moved
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Is it cheap or expensive?
Fair value $28.29 vs current price $12.87
Our most-likely fair value is $28.29 a share — about 119.8% above today's price of $12.87, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Stretched
Net debt $3.9B. Interest coverage 3.6x.
Net debt
$3.93B
Interest coverage
3.59x
Sodexo S.A.'s profit covers its interest bill about 3.6 times over.
Stretched
Worse cushion
Baseline
Better cushion
SDXAY
BASELINE
Sodexo S.A.
Total debt $5.20B Interest coverage 3.59x This is the baseline the peer rows are being compared against.
Total debt $9.13B Interest coverage 8.72x +142% vs SDXAY Carries about 2.4x more debt cushion than SDXAY.
Total debt $1.88B Interest coverage 3.37x -6% vs SDXAY Has roughly the same debt cushion as SDXAY.
Total debt $2.71B Interest coverage 24.67x +586% vs SDXAY Carries about 6.9x more debt cushion than SDXAY.
Total debt $13.77B Interest coverage 9.45x +163% vs SDXAY Carries about 2.6x more debt cushion than SDXAY.
What you should know
The case for and against SDXAY
3 Rewards
1 Risk
Rewards
-
Revenue grew 0.7% last year.
-
Free cash flow was positive in 4/10 years.
-
Trades at 26.8x P/E vs peer median 34.5x (22.4% cheaper).
Risks
-
Insider ownership is only 0.0% (peer median: 0.9%).
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)
26.81x
Forward P/E
1.79x
P/B
2.22x
P/S
0.39x
EV/EBITDA
12.89x
PEG ratio
3.39x
Profitability
How much profit each dollar creates
Gross margin
10.6%
Operating margin
2.9%
Net margin
1.3%
ROE
8.0%
ROA
3.1%
Health
Liquidity and balance-sheet strength
Debt / equity
1.23x
Current ratio
0.89x
Quick ratio
0.83x
Total debt
$5.20B
Total cash
$1.26B
Growth
How the business has been compounding
Revenue TTM
$26.76B
Revenue 5Y CAGR
5.7%
EPS TTM
0.48
EPS 5Y CAGR
-23.9%
Cash flow
How much cash the business throws off
Operating CF TTM
$1.01B
Free CF TTM
$606.37M
FCF margin
2.3%
Dividend
Shareholder payout
Yield
4.8%
Payout ratio
136.1%
Last ex-div date
2025-12-22