Yahoo Finance Does CGI Group Inc.’s (TSE:GIB.A) Recent Track Record Look Strong?
When CGI Group Inc. (TSE:GIB.A) announced its most recent earnings (30 September 2018), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well CGI Group has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I’ve summarized the key takeaways on how I see GIB.A has performed.
Check out our latest analysis for CGI Group
Commentary On GIB.A’s Past Performance
GIB.A’s trailing twelve-month earnings (from 30 September 2018) of CA$1.1b has jumped 10% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 10%, indicating the rate at which GIB.A is growing has accelerated. What’s enabled this growth? Let’s see whether it is only a result of industry tailwinds, or if CGI Group has experienced some company-specific growth.
In terms of returns from investment, CGI Group has fallen short of achieving a 20% return on equity (ROE), recording 17% instead. Furthermore, its return on assets (ROA) of 10% is below the CA IT industry of 18%, indicating CGI Group’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for CGI Group’s debt level, has increased over the past 3 years from 17% to 19%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 71% to 28% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I suggest you continue to research CGI Group to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for GIB.A’s future growth? Take a look at our free research report of analyst consensus for GIB.A’s outlook.
Financial Health: Are GIB.A’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 September 2018. This may not be consistent with full year annual report figures.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
