Value
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 8.5 |
| P/S | 9.8 |
| EV/EBITDA | 8.2 |
| Fwd P/E | 9.3 |
| PEG | 6.1 |
| Analyst target | 4.0 |
- ▸Forward P/E: 9.7x
- ▸PEG: 1.21
- ▸Attractively valued
GIB · Why this verdict
Why CGI (GIB) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.3/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Free cash flow conversion at 127% of net income signals that reported earnings are conservative — the business is generating substantially more cash than its accounting income reflects, providing a genuine quality cushion and financial flexibility that the modest headline growth rate does not fully capture. Quality breakdown | Sustained high cash conversion will support continued capital returns to shareholders and maintain financial flexibility, reinforcing the quality case over the next 12 months even if top-line growth remains soft. | →Stable |
| CounterFree cash flow running above net income can reflect favorable working-capital timing rather than structural quality; if growth reaccelerates and requires incremental investment, the conversion ratio may normalize toward 100%, reducing the apparent quality premium. | ||
The company delivered positive EPS surprises in each of the three most recent reported quarters at a forward price-to-earnings multiple of 9.5 times — a combination suggesting reliable delivery against guidance at a valuation that does not require heroic assumptions about growth. Earnings | A fourth consecutive beat would reinforce the pattern and likely narrow the discount to intrinsic value, providing price appreciation from the current single-digit multiple. | →Stable |
| CounterThe beat margins have been extremely thin — averaging less than 1 percentage point above consensus — suggesting the pattern owes more to conservative guidance management than to genuine earnings acceleration; any modest demand headwind could tip a thin beat to a miss. | ||
Revenue growth and earnings growth remain soft, failing to provide the re-rating catalyst needed to lift the multiple from its current single-digit level; without evidence of a growth reacceleration, the stock may trade sideways at current valuations even as the earnings beat streak continues. Bear case | If growth stays weak, the stock will continue to trade at a discount to higher-growth information technology services peers and the multiple will fail to expand meaningfully over the next 12 months. | →Stable |
| CounterThe forward price-to-earnings multiple of 9.5 times with a PEG of 1.25 is already pricing in low growth; any modest reacceleration from a depressed baseline could produce an outsized re-rating given how little growth is currently embedded in the valuation. | ||
The stock is trading below its 200-day moving average with the average declining at 5.3% per 30 days, and a death cross is in place as a confirmed technical block — signaling that institutional selling momentum has not yet reversed and creating a near-term headwind regardless of fundamental merit. Momentum breakdown | Until the 200-day slope turns positive and the death cross resolves, continued selling pressure may delay any fundamental re-rating; near-term price action is likely to remain constrained. | →Stable |
| CounterDeath cross patterns in fundamentally sound, attractively valued businesses frequently mark capitulation lows; improving MACD alongside a depressed RSI indicates that the worst of the selling pressure may already be priced in, setting the stage for a technical reversal. | ||
Free cash flow conversion at 127% of net income signals that reported earnings are conservative — the business is generating substantially more cash than its accounting income reflects, providing a genuine quality cushion and financial flexibility that the modest headline growth rate does not fully capture.
→StableQuality breakdown
- Expectation
- Sustained high cash conversion will support continued capital returns to shareholders and maintain financial flexibility, reinforcing the quality case over the next 12 months even if top-line growth remains soft.
CounterFree cash flow running above net income can reflect favorable working-capital timing rather than structural quality; if growth reaccelerates and requires incremental investment, the conversion ratio may normalize toward 100%, reducing the apparent quality premium.
The company delivered positive EPS surprises in each of the three most recent reported quarters at a forward price-to-earnings multiple of 9.5 times — a combination suggesting reliable delivery against guidance at a valuation that does not require heroic assumptions about growth.
→StableEarnings
- Expectation
- A fourth consecutive beat would reinforce the pattern and likely narrow the discount to intrinsic value, providing price appreciation from the current single-digit multiple.
CounterThe beat margins have been extremely thin — averaging less than 1 percentage point above consensus — suggesting the pattern owes more to conservative guidance management than to genuine earnings acceleration; any modest demand headwind could tip a thin beat to a miss.
Revenue growth and earnings growth remain soft, failing to provide the re-rating catalyst needed to lift the multiple from its current single-digit level; without evidence of a growth reacceleration, the stock may trade sideways at current valuations even as the earnings beat streak continues.
→StableBear case
- Expectation
- If growth stays weak, the stock will continue to trade at a discount to higher-growth information technology services peers and the multiple will fail to expand meaningfully over the next 12 months.
CounterThe forward price-to-earnings multiple of 9.5 times with a PEG of 1.25 is already pricing in low growth; any modest reacceleration from a depressed baseline could produce an outsized re-rating given how little growth is currently embedded in the valuation.
The stock is trading below its 200-day moving average with the average declining at 5.3% per 30 days, and a death cross is in place as a confirmed technical block — signaling that institutional selling momentum has not yet reversed and creating a near-term headwind regardless of fundamental merit.
→StableMomentum breakdown
- Expectation
- Until the 200-day slope turns positive and the death cross resolves, continued selling pressure may delay any fundamental re-rating; near-term price action is likely to remain constrained.
CounterDeath cross patterns in fundamentally sound, attractively valued businesses frequently mark capitulation lows; improving MACD alongside a depressed RSI indicates that the worst of the selling pressure may already be priced in, setting the stage for a technical reversal.
TrendMatrix Research · core thesis
Engine thesis — one sentence
CGI offers excellent cash conversion at 127% of net income and a three-quarter streak of earnings beats at a single-digit forward multiple, but a confirmed death cross with the 200-day moving average declining at 5.3% per month and persistently weak revenue growth limit the appeal of establishing or adding to a position until the technical picture improves.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.5 |
| ROA | 5.9 |
| Gross margin | 0.1 |
| Op margin | 6.6 |
| Net margin | 5.1 |
| Current ratio | 3.8 |
| FCF quality | 9.2 |
| Moat | 5.0 |
| Piotroski F | 7.8 |
- ▸Excellent cash conversion: 127% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
3.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.3 |
| EPS growth | 4.1 |
Momentum
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 1.5 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -5.2%/30d — confirmed downtrend
Sentiment
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.1 |
| Price target | 6.4 |
| erm sentiment | 4.9 |
- ▸Light analyst coverage (3.0) — signal dampened
Insider
5.0/10data confidence 50%Peer rank
3.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.3 |
| quality rank | 5.6 |
| growth rank | 3.4 |
Technical
2.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.4 |
| support resistance | 2.7 |
| 52w position | 2.1 |
Risk (lower is worse)
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| days to cover | 0.0 |
| volatility | 3.5 |
| put call | 0.0 |
| implied vol | 6.1 |
| beta | 10.0 |
| debt equity | 8.2 |
- ▸Elevated put/call: 2.50
Catalyst
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 3.0 |
| dividend safety | 6.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 72.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:6.4>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:24d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.7=NEGATIVE
Warning (1)
- DEATH_CROSS:momentum=6.4>=5.0 recovering
Reward-to-Risk
-0.67
Upside
-6.7%
Downside
10.1%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 49
EdgeCatalyst-Driven — Earnings in 24d with 4/4 beat streak
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.3 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 7.4) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.7=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.67 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 7.4, Momentum at 6.4, and Sentiment at 5.9; the weakest are Technical at 2.7, Growth at 3.7, and Peer rank at 3.8. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.67 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Excellent Cash Conversion Quality
Trip ifFree cash flow falls below 100% of net income for 2 consecutive quarters, confirming the cash-conversion quality advantage has eroded.
- P2Consecutive Earnings Beats At Low Multiple
Trip ifEPS surprise turns negative (falls below 0%) for 2 consecutive quarters, breaking the streak of guided delivery.
- P3Confirmed Death Cross And Downtrend
Trip ifThe 200-day moving average slope turns positive (above 0% per 30 days) for 2 consecutive months, confirming the downtrend has reversed.
- P4Weak Growth Limits Multiple Expansion
Trip ifRevenue grows more than 5% year-over-year for 2 consecutive quarters, confirming a genuine growth reacceleration from the current soft trend.