CGI Services provides information technology (IT) consulting, systems integration, IT outsourcing and business solutions. The company was founded in 1976 and is based in Montréal, Canada.
GIB Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Cgi Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Cgi Inc ranked in the 40th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. In terms of the factors that were most noteworthy in this DCF analysis for GIB, they are:
The compound growth rate in the free cash flow of Cgi Inc over the past 4 years is 0.05%; that's better than only 24.8% of cash flow producing equities in the Technology sector, where it is classified.
The business' balance sheet reveals debt to be 9% of the company's capital (with equity being the remaining amount). Approximately just 20.58% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
GIB's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 38.74% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Cgi Inc? See ROG, ST, ADI, ALRM, and G.
Both CGI Group and BlackBerry could deliver impressively returns in the long term, given their improving growth prospects and attractive valuations. The post 2 Cheap TSX Tech Stocks to Buy Right Now appeared first on The Motley Fool Canada .