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1. Company Snapshot

1.a. Company Description

CGI Inc., together with its subsidiaries, provides information technology (IT) and business process services in Canada; Western, Southern, Central, and Eastern Europe; Australia; Scandinavia; Finland, Poland, and Baltics; the United States; the United Kingdom; and the Asia Pacific.Its services include the management of IT and business outsourcing, systems integration and consulting, and software solutions selling activities.The company also offers application development, integration and maintenance, testing, portfolio management, and modernization services; business consulting; and a suite of business process services designed to address the needs of specific industries, as well as IT infrastructure services.


It serves clients operating in government, banking and capital market, health, utility, communication and media, oil and gas, retail, consumer and services, space, manufacturing, insurance, life sciences, retail and consumer service, and transportation and logistics sectors.The company was formerly known as CGI Group Inc.and changed its name to CGI Inc.


in January 2019.CGI Inc.was founded in 1976 and is headquartered in Montreal, Canada.

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1.b. Last Insights on GIB

CGI Inc.'s recent performance was negatively impacted by growth headwinds, particularly from U.S. federal government exposure. The company's Q3 earnings release revealed a 7.1% year-over-year decline in earnings before income taxes. A recent sell rating from an analyst cited weak bookings, U.S. government IT project cuts, and restructuring challenges in Europe as limiting near-term topline growth. Additionally, the company's acquisition of Apside may pose integration risks. Despite a strong balance sheet, CGI's growth prospects are uncertain. (Source: July 24, 2025, CGI Q3 Preview: U.S. Federal Exposure Is A Huge Risk)

1.c. Company Highlights

2. CGI's Strong Fiscal 2025 Performance and Promising Outlook

CGI reported a robust fourth quarter fiscal 2025, with revenue reaching $4 billion, up 9.7% year-over-year, and adjusted EBIT of $667 million, up 11.2%. The company's earnings per share (EPS) came in at $1.55, beating analyst estimates of $1.53. For the full fiscal year, revenue increased 4.6% on a constant currency basis, with managed services growing 6% and EPS expanding 8.9% on an adjusted basis. The company's book-to-bill ratio was 119%, with bookings of $4.8 billion, and contracted backlog reached $31.5 billion.

Publication Date: Nov -12

📋 Highlights
  • Revenue & Profit Growth:: FY2025 revenue rose 4.6% ($17.6B total) with adjusted EBIT at $667M (+11.2% YoY), driven by managed services (+6%) and 8.9% EPS growth.
  • AI Investment Impact:: AI-native platforms like PulseAI enabled 30% productivity gains, while AI-related bookings grew significantly, with a $5B increase in AI-integrated opportunities.
  • Strong Bookings Momentum:: FY2025 bookings hit $17.6B (+$1.5B YoY), with a 119% book-to-bill ratio and $31.5B contracted backlog, reflecting robust client demand.
  • Strategic M&A Focus:: Aggressive M&A pipeline (valuations at 1–1.5x revenue) targets AI expertise and underrepresented regions, with $11B growth in managed services opportunities.
  • Capital Allocation & Guidance:: $2.2B cash from operations funds AI investments, acquisitions, and shareholder returns, despite $60–75M near-term federal shutdown revenue impact.

Strategic Focus on AI-Driven Transformation

CGI's strategy is centered around leading the next phase of digital transformation, particularly for large enterprises, commercial, and government organizations. The company is leveraging AI to simplify and orchestrate digital complexity, with a focus on embedding AI into end-to-end services, leading with AI-integrated platforms, uniting talent and AI technologies, and accelerating internal AI adoption. CGI has made significant investments in AI, including the development of AI-native platforms such as PulseAI, and has seen productivity gains of up to 30% in certain areas.

Valuation and Growth Prospects

With a P/E Ratio of 15.73 and an EV/EBITDA of 9.97, CGI's valuation appears reasonable considering its growth prospects. Analysts estimate revenue growth of 7.8% for the next year, driven by the company's strong pipeline of opportunities that integrate AI in its offerings, which has increased by nearly $5 billion compared to the previous year. The company's ROIC of 15.08% and ROE of 17.27% also indicate a strong return on investment.

Challenges and Opportunities Ahead

Despite the positive outlook, CGI faces some challenges, including market uncertainty and cautious client spending. However, the company is well-positioned to navigate these challenges, with a strong presence in managed services and a growing pipeline of AI-related opportunities. The US federal government procurement cycles are expected to impact revenue in the next quarter, but CGI is optimistic about its federal business once the government reopens.

M&A Strategy and Integration

CGI's M&A pipeline is strong, with valuations down to 1-1.5x revenue, making it a favorable environment for acquisitions. The company is evaluating AI readiness and risks in M&A targets, focusing on buying client relationships and expertise, particularly in underrepresented regions like the US. Recent M&A integrations are tracking to expectations, with opportunities for synergies and new client relationships.

3. NewsRoom

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State of Nevada launches modernized HR and payroll systems with CGI Advantage ERP solution

Dec -04

Source: prnewswire.com

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CGI expands its Winnipeg presence and Canadian footprint with the acquisition of Online Business Systems

Dec -03

Source: prnewswire.com

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Highmark Inc. extends partnership with CGI to enhance and strengthen claim payment programs and drive innovation

Dec -02

Source: prnewswire.com

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CGI achieves AWS Premier Tier and SAP Competency Partner status, expanding its global AI-integrated cloud and data solutions to accelerate client transformation

Dec -02

Source: prnewswire.com

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CGI Inc (TSE:GIB.A) Receives Average Rating of “Buy” from Analysts

Nov -27

Source: defenseworld.net

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CGI partners with government organizations across Florida to drive modernization with CGI Advantage®

Nov -18

Source: prnewswire.com

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MAYFAIR PROVIDES FENN-GIB PROJECT UPDATE

Nov -10

Source: prnewswire.com

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CGI awarded £250-million Enterprise Integration Services contract with His Majesty's Revenue and Customs in the UK

Nov -10

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.96%)

6. Segments

Managed Information Technology and Process Services

Expected Growth: 3.5%

CGI Inc.'s Managed Information Technology and Process Services segment growth of 3.5% is driven by increasing demand for digital transformation, cloud adoption, and cybersecurity services. Additionally, the need for operational efficiency, cost reduction, and IT modernization in various industries such as healthcare, finance, and government contribute to the segment's growth.

Business and Strategic Information Technology Consulting and Systems Integration

Expected Growth: 4.5%

CGI Inc.'s 4.5% growth in Business and Strategic Information Technology Consulting and Systems Integration is driven by increasing demand for digital transformation, cloud adoption, and cybersecurity services. Additionally, strategic acquisitions, expansion into new markets, and a strong reputation for delivering complex IT projects contribute to the segment's growth.

7. Detailed Products

IT Consulting Services

CGI provides IT consulting services to help clients assess, plan, and implement technology solutions that meet their business needs.

Application Services

CGI provides application services to design, develop, test, and maintain custom applications that meet clients' specific business needs.

Infrastructure Services

CGI provides infrastructure services to design, implement, and manage clients' IT infrastructure, including data centers, networks, and cloud services.

Business Process Services

CGI provides business process services to help clients optimize and automate their business processes, improving efficiency and reducing costs.

Cybersecurity Services

CGI provides cybersecurity services to help clients protect their IT systems and data from cyber threats.

Digital Transformation Services

CGI provides digital transformation services to help clients develop and implement digital strategies that drive business growth and innovation.

8. CGI Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

CGI Inc. operates in a highly competitive industry, and there are many substitutes available to customers. However, the company's strong brand reputation and customer loyalty mitigate the threat of substitutes to some extent.

Bargaining Power Of Customers

CGI Inc. has a large customer base, but the customers have significant bargaining power due to the availability of substitutes and the company's dependence on a few large clients.

Bargaining Power Of Suppliers

CGI Inc. has a diverse supplier base, and the suppliers have limited bargaining power due to the company's large scale of operations and its ability to negotiate favorable terms.

Threat Of New Entrants

The threat of new entrants in the industry is moderate, as there are significant barriers to entry, including high capital requirements and the need for specialized skills and expertise.

Intensity Of Rivalry

The industry in which CGI Inc. operates is highly competitive, with many players competing for market share. The company's strong brand reputation and customer loyalty help to mitigate the intensity of rivalry to some extent.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 31.05%
Debt Cost 3.95%
Equity Weight 68.95%
Equity Cost 8.02%
WACC 6.75%
Leverage 45.03%

11. Quality Control: CGI Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Genpact

A-Score: 6.0/10

Value: 5.9

Growth: 6.1

Quality: 6.8

Yield: 3.0

Momentum: 6.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Leidos

A-Score: 5.7/10

Value: 4.3

Growth: 6.7

Quality: 5.9

Yield: 2.0

Momentum: 7.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Jack Henry

A-Score: 5.0/10

Value: 2.7

Growth: 5.7

Quality: 7.4

Yield: 3.0

Momentum: 1.5

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
CGI

A-Score: 4.9/10

Value: 5.3

Growth: 5.9

Quality: 6.6

Yield: 0.0

Momentum: 1.5

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
CACI

A-Score: 4.5/10

Value: 3.7

Growth: 6.4

Quality: 5.1

Yield: 0.0

Momentum: 4.5

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
ASGN

A-Score: 4.1/10

Value: 7.6

Growth: 6.2

Quality: 5.2

Yield: 0.0

Momentum: 0.0

Volatility: 5.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

92.26$

Current Price

92.26$

Potential

-0.00%

Expected Cash-Flows