CGI Group‘s GIB shares have returned 13.9% compared with the Zacks Computer-Services industry’s 5.7% on a year-to-date basis.
CGI is benefiting from an expanding clientele and strong partner base. The company benefits from its proximity-based business model combining its worldwide network of experts and capabilities with local accountability and end-to-end client services.
CGI’s recent announcement of successfully completing a real-time pilot conducted within a planetary-scale Metaverse environment. It involves the seamless integration of the Marine Corps Platform Integration Center (MCPIC) logistics and asset management systems with digital twins, which are virtual duplicates of tangible assets in a simulated world.
CGI's collaboration with Microsoft and Battle Road Digital reveals transformative potential, offering the Marine Corps advanced capabilities for enhanced training and operational efficiency through visualization, real-time monitoring, and predictive analytics.
This milestone extends beyond defense applications, unveiling prospects in urban planning, infrastructure development and federal disaster response by providing unparalleled insights, revolutionizing decision-making, and resource allocation to make a meaningful difference in lives.
CGI Group, Inc. Price and Consensus
CGI’s Prospects Bright in 2023
CGI is positioned to leverage the ongoing wave of technology innovation, benefiting from the persistent digitalization trends amid challenging macroeconomic conditions. In the near term, the robust demand for its managed services and IP offerings is expected to be a driving force behind top-line growth.
The company’s managed services pipeline for industries like manufacturing, retail and energy and utilities is up more than 33% for the next year, while the IP pipeline is up 30%. Moreover, in government health care and insurance, CGI’s pipeline remains well balanced across consulting system integration and managed services and is up 20% year over year.
CGI has also been benefiting from solid demand for its business solutions. In the fiscal third quarter, the IP portfolio grew 12.4% year over year or 7.7% at constant currency. The number of consultants and professionals increased year over year by 3K, totaling 91,500 worldwide.
GIB's recent acquisition of Momentum Consulting bolsters its presence in Miami, adding 175 consultants and reinforcing its U.S. operations, which boast nearly 13,000 professionals across 80 offices.
CGI secures a 10-year, $143.5 million contract with the Administrative Office of the U.S. Courts, providing strategic consulting and digital transformation services with their innovative momentum solution.
Expanding clientele has been a key catalyst. CGI’s solutions were selected by the likes of the U.S. Environmental Protection Agency and Bankgirot (Sweden’s payments clearinghouse), a government ministry in Germany.
CGI also invests in developing AI-based solutions and services and plans to invest $1 billion over the next three years.
The Zacks Consensus Estimate for fiscal 2023 and fiscal 2024 revenues are pegged at $10.93 billion and $11.4 billion, indicating growth of 8.42% and 4.36%, respectively.
Zacks Rank & Stocks to Consider
Currently, CGI has a Zacks Rank #4 (Sell).
Dell Technologies DELL, NVIDIA NVDA and Splunk SPLK are some better-ranked stocks that investors can consider in the broader sector, each sporting a Zacks Rank #1(Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
DELL, NVDA and SPLK shares have returned 69.2%, 211.1% and 71.8%, respectively, year-to-date.
Long-term earnings growth rates for Dell Technologies, NVIDIA and Splunk are pegged at 12%,13.5% and 29.55%, respectively.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.