Yahoo Finance Want To Invest In CGI Inc. (TSE:GIB.A)? Here's How It Performed Lately
Assessing CGI Inc.'s (TSX:GIB.A) performance as a company requires looking at more than just a years' earnings data. Below, I will run you through a simple sense check to build perspective on how CGI is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its it industry peers.
See our latest analysis for CGI
How Did GIB.A's Recent Performance Stack Up Against Its Past?
GIB.A's trailing twelve-month earnings (from 31 December 2019) of CA$1.2b has increased by 6.4% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 5.7%, indicating the rate at which GIB.A is growing has accelerated. How has it been able to do this? Well, let’s take a look at if it is solely due to an industry uplift, or if CGI has seen some company-specific growth.
In terms of returns from investment, CGI has fallen short of achieving a 20% return on equity (ROE), recording 18% instead. However, its return on assets (ROA) of 9.4% exceeds the CA IT industry of 6.9%, indicating CGI has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for CGI’s debt level, has increased over the past 3 years from 18% to 18%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 47% to 30% over the past 5 years.
What does this mean?
CGI's track record can be a valuable insight into its earnings performance, but it certainly 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 recommend you continue to research CGI 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 31 December 2019. This may not be consistent with full year annual report figures.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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