Canada's CGI Q3 revenue slightly beats estimates

Overview

• Canada IT consulting firm's fiscal Q3 revenue rose 2.5%, slightly beating analyst expectations

• Adjusted net income for Q3 missed analyst expectations

• Adjusted diluted EPS rose 9% yr/yr to C$2.29

Outlook

• CGI says robust backlog and rising opportunity pipeline position it for continued profitable growth

• Company sees client focus on AI, data, cybersecurity creating new partnership opportunities

Result Drivers

• GOVERNMENT SECTOR AWARDS - Co said strong government sector awards contributed to bookings and backlog

• CLIENT DEMAND FOR AI AND MODERNIZATION - Co said clients are increasingly focused on secure, enterprise-scale AI and modernization, creating new opportunities

• OPERATIONAL EXECUTION - Co attributed revenue growth, EPS accretion and cash generation to operational excellence

Company press release: ID:nPn8NlkfYa

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 7 "strong buy" or "buy", 5 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the it services consulting peer group is "buy."

• Wall Street's median 12-month price target for CGI Inc is C$117.00, about 16.2% above its July 28 closing price of C$100.71

• The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 11 three months ago

Reuters Recommended Reads

• July 29 - Sopra Steria raises growth target on strong European AI, cybersecurity demand

• July 28 - Huron Consulting Q2 revenue before reimbursable expenses rises 16%

• July 27 - Kforce Q2 revenue slightly beats estimates as Flex sales grow

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)