CGI Stock Price and Overview

Is CGI Stock a Buy?
In this article we will explore CGI, a major player in IT consulting and software development. We'll also explore their services, recent projects, and latest news to understand their business.

But can their financial health match their reputation? We'll analyze CGI's stock price using technical indicators and their profitability, liquidity, growth potential, and valuation.

By the end, you'll have a clear picture of CGI's strengths and weaknesses to decide if this stock deserves a spot in your portfolio.

Confirm the theory on practice

Once opened Demo you will be supplied with educational materials and online support

Open Demo Account

KEY TAKEAWAYS

CGI has strong profitability metrics: ROA, ROE, and ROIC compared to industry averages. They also have impressive Profit Margin and Operating Margin.
CGI was selected as a partner to implement a major modernization effort to upgrade core systems for Los Angeles County. This 10-year project signifies CGI's expertise and strong relationship with government agencies.
TWhile there are some bearish signals for CGI stock price like the downward turn in the 50-day MA, there's also a bullish divergence between the RSI and some underlying buying pressure.

About the CGI Stock

CGI Inc., short for Consultants to Government and Industry Incorporated, is a major player on the world stage for IT consulting and software development. Here's a detailed breakdown of their key aspects:

CGI offers a wide range of IT and business consulting services. Some of their core offerings include:

IT Strategy and Consulting: Helping clients define their IT needs, develop strategies, and choose the right technologies.
Systems Integration: Connecting various IT systems and applications to ensure seamless operation.
Application Development and Management: Designing, building, and maintaining software applications for businesses.
Business Process Outsourcing (BPO): Taking over specific business processes like IT infrastructure management for clients.
Management Consulting: Providing advice on improving business operations and achieving strategic goals.

Countries They Operate In

CGI boasts a truly global presence, with offices and operations spread across an impressive number of countries. Their website claims a presence in over 400 locations worldwide, spanning 21 different industry sectors.

Market Position

CGI is considered one of the largest IT and business consulting firms globally. Company has over 90,000 employees, a significant workforce with expertise across various IT domains. CGI is publicly traded, is listed on the Toronto Stock Exchange (primary) and the New York Stock Exchange (secondary). Also included in the S&P/TSX 60 index talks about their importance in the Canadian stock market.

Major Historical Events

1976: Founding of CGI by Serge Godin and André Imbeau.
1986: Going public on the Toronto Stock Exchange, marking a major milestone for the company's growth.
Acquisitions: Over the years, CGI has made several strategic acquisitions, including Logica in 2012, which significantly expanded their global reach and service offerings.
2018 Opening of the CGI Federal Innovation Center in Virginia, USA, showcasing their commitment to collaboration and exploring new technologies in the government sector.

CGI Latest Important News

- Angeles County Modernization Project: The County of Los Angeles is undergoing a major modernization effort to upgrade its core systems for finance, budgeting, inventory, payroll, and human resources (HR). And CGI has been selected as the partner to implement this project.
  They will deploy their CGI Advantage® platform, an Enterprise Resource Planning (ERP) solution specifically designed for government organizations. This 10-year engagement is a long-term commitment from both parties. CGI will provide ongoing support and work collaboratively with the county to achieve their digitization goals and adapt to future challenges.
  This project represents a major step forward in modernizing the county's critical infrastructure. With a system managing payroll for over 110,000 employees, disbursements exceeding $12 billion annually, and a $46 billion budget, a smooth and efficient system is crucial. Upgrading to a modern ERP system is expected to improve service delivery, enhance security, and empower the county workforce.

If you are interested in CFD trading in Canada, CGI is a great Canadian stock to start with.

CGI Stock Price

CGI's stock price shows a mixed technical picture. While the 50-day MA above the 200-day MA is a bullish sign, its recent downturn suggests a potential trend reversal. Price sits below both MAs, facing resistance at the 200-day MA. Let's explore indicators to see if we can spot a clearer direction.

Moving Averages (MA): The 50-day MA is above the 200-day MA, which is a bullish sign. However, the 50-day MA is currently turning downwards towards the 200-day MA, which is a bearish crossover. This indicates a possible reversal of the uptrend. The price is currently trading below both MAs, which is another bearish sign. The 200-day MA is also acting as a resistance level, as the price has been unable to break above it recently.
Stochastic Oscillator: The Stochastic Oscillator is in overbought territory, which suggests that the stock may be due for a pullback. However, it is important to note that the Stochastic Oscillator can stay in overbought territory for extended periods of time.
MACD (Moving Average Convergence Divergence): The MACD signal line is below zero, which is a bearish sign. The MACD histogram is also negative, which reinforces the bearish signal.
RSI (Relative Strength Index): The RSI is at 43.74, which is considered to be a neutral level. However, there is a slight bullish divergence between the RSI and the price. The price is making lower highs, while the RSI is making higher highs. This divergence suggests that the downside momentum may be weakening.

Technical analysis of the CGI stock is mixed. There are some bearish signals, such as the downward turn in the 50-day MA, the overbought Stochastic Oscillator, and the negative MACD. However, there is also a bullish divergence between the RSI and the proximity to the 38.2 Fibonacci level hint at some underlying buying pressure.

CGI Stock Trading

Let’s explore GIB’s financial health, profitability metrics like Return on Assets (ROA) and Return on Equity (ROE) and more. We'll analyze its strengths and weaknesses across profitability, liquidity, growth, and valuation to help you make more informed decisions.

Profitability

GIB shines in profitability metrics, boasting a Return On Assets (ROA) of 10.46%, Return On Equity (ROE) of 18.60%, and Return On Invested Capital (ROIC) of 15.00%. These figures outperform a significant portion of the industry (84.52%, 82.14%, and 88.10% respectively).
Profit Margin (11.37%) is also impressive, exceeding 83.33% of peers and showing an upward trend.
Operating Margin paints a similar picture, with a strong 16.33% (outperforming 88.10% of the industry) and a history of improvement.
However, GIB falls short on Gross Margin (16.41%), underperforming 90.48% of its peers, though it has remained stable over time.

Liquidity

The Current Ratio of 1.17 suggests GIB might not face significant challenges meeting short-term obligations. However, it sits in the lower half of the industry (underperforming 66.67%).
The Quick Ratio, a more stringent measure, presents a concerning picture. At 0.86, it falls below the industry average (underperforming 78.57%) and indicates potential difficulties meeting short-term liabilities.

Growth

Earnings Per Share (EPS) is a bright spot, showcasing impressive growth of 12.93% in the last year and a 10.98% average growth over the past years.
Revenue growth is modest, with a 5.87% increase last year and a 4.44% average historical growth.
Future estimates predict continued strong EPS growth (9.96% average annually) with a slight increase in revenue (3.94% average yearly). Notably, the EPS growth rate is expected to remain stable.

Valuation

GIB's Price-to-Earnings (P/E) ratio of 19.14 suggests it might be somewhat expensive. However, compared to the industry, this ratio indicates a cheaper valuation (outperforming 67.86% of peers) and falls slightly below the S&P 500 average (28.05).
The Price-to-Forward Earnings (P/F) ratio of 16.44 suggests a fair valuation relative to the industry average, as 75% of peers are valued more expensively. This P/F ratio also aligns closely with the S&P 500 average (20.30).

GIB has good profitability metrics, with strong ROA, ROE, ROIC, Profit Margin, and Operating Margin, all exceeding a significant portion of the industry. However low Quick Ratio raises questions about short-term liquidity. While revenue growth is modest, EPS growth is impressive and expected to remain stable. Valuation appears fair based on P/E and P/F ratios compared to the industry and the S&P 500.

You should also check out CGI stock price history, it will help you with evaluation. Also you'll want to familiarize yourself with Canadian stock market hours. With this knowledge, you can plan your trading activity accordingly.

Next, to actively track CGI's performance, consider to download MetaTrader 5 trading platform. It will allow you to view live CGI stock quote and historical price data, giving you valuable insights into its past performance and potential future trends.

Bottom Line on CGI Stock

CGI presents a mixed picture for traders.

Quick recap for you

Pros

CGI boasts impressive Return on Assets (ROA), Return on Equity (ROE), and Return on Invested Capital (ROIC), outperforming a significant portion of the industry.
This long-term engagement demonstrates CGI's expertise and strong relationship with government agencies, potentially leading to future contracts.
Earnings per Share (EPS) has shown impressive and consistent growth, with analysts expecting this trend to continue.
CGI's P/E and P/F ratios suggest a fair valuation compared to the industry and the S&P 500.

Cons

While some technical indicators are bearish, others hint at underlying buying pressure. More research into technical analysis is recommended.
The Quick Ratio raises a red flag, indicating potential difficulty meeting short-term obligations.

Bottom line CGI is a profitable company with a strong track record and promising future growth.