Narrow-moat Capgemini reported a 3.3% decline in constant-currency sales in its first-quarter trading update. Not completely surprising, as the company previously indicated the first quarter would be the trough in sales growth for the fiscal year. Shares were down around 2% intraday. We don’t expect to make a material change to our EUR 210 fair value estimate. At current levels, the shares look fairly valued.
Capgemini’s long-term growth profile has been upgraded due to the structural demand trend for digital transformation services.
Indian competitors are increasingly targeting Europe for growth, which is the region where Capgemini still generates most of its revenue.
|
Metric
|
CAP
|
INFY
|
ACN
|
|---|---|---|---|
Price/Earnings (Normalized) | 16.58 | 24.01 | 25.71 |
Price/Book Value | 3.42 | 6.68 | 7.64 |
Price/Sales | 1.65 | 3.81 | 3.03 |
Price/Cash Flow | 13.92 | 18.74 | 18.24 |
|
Metric
|
CAP
|
INFY
|
ACN
|
|---|---|---|---|
Quick Ratio | 1.26 | 1.68 | 1.13 |
Current Ratio | 1.34 | 1.99 | 1.26 |
Interest Coverage | 12.47 | — | 168.58 |
|
Metric
|
CAP
|
INFY
|
ACN
|
|---|---|---|---|
Return on Assets (Normalized) | 8.45% | 19.14% | 17.18% |
Return on Equity (Normalized) | 21.15% | 32.00% | 36.65% |
Return on Invested Capital (Normalized) | 12.28% | 28.86% | 28.45% |
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Ticker
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Name
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Morningstar Rating for Stocks
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Capital Allocation
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Economic Moat
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Market Cap
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