Is CGI Inc. (TSE:GIB.A) Potentially Underrated?
As an investor, I look for investments which do not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of CGI Inc. (TSE:GIB.A), it is a company with great financial health as well as a a strong history of performance. In the following section, I expand a bit more on these key aspects. For those interested in digging a bit deeper into my commentary, read the full report on CGI here.
Flawless balance sheet with solid track record
Over the past year, GIB.A has grown its earnings by 17%, with its most recent figure exceeding its annual average over the past five years. Not only did GIB.A outperformed its past performance, its growth also surpassed the IT industry expansion, which generated a 14% earnings growth. This is an notable feat for the company. GIB.A's strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This suggests prudent control over cash and cost by management, which is an important determinant of the company’s health. GIB.A appears to have made good use of debt, producing operating cash levels of 0.61x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
Next Steps:
For CGI, I've compiled three fundamental factors you should further examine:
Future Outlook: What are well-informed industry analysts predicting for GIB.A’s future growth? Take a look at our free research report of analyst consensus for GIB.A’s outlook.
Valuation: What is GIB.A worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether GIB.A is currently mispriced by the market.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of GIB.A? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
