Q: Hello, can you comment on CGI’s latest earnings last month? Is it still a buy even if it is close to its 52-week high, and if so, why? Thanks.
5i Research Answer:
We view new highs as a sign of strength and of confirmation of a thesis, rather than something negative. Markets are rallying with lower bond yields, and we think the outlook remains good here. Fiscal Q4 EPS of $1.79 beat estimates of $1.76. Revenue of $3.5B was 1% off estimates. EBITDA of $711M was 1% better. Backlog grew to $26.1B representing nearly two years' revenue. Revenue rose 8%. EPS rose 17%. Even with its gains it remains very cheap for the tech sector, at 18X earnings, and we would consider it a BUY today.