October 19, 2023
Top 10 Stock Capgemini Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Capgemini – Top 10 Stock in Indice de Precio Selectivo de Acciones
Capgemini is listed as a top 10 stock on October 19, 2023 in the market index IPSA because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance, the professional market sentiment is positive and it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 64 (high 64% performer), Obermatt assesses an overall buy recommendation for Capgemini on October 19, 2023.
Snapshot: Obermatt Ranks
| Country | France |
| Industry | IT Consulting & oth. Services |
| Index | CAC 40, CAC All, SBF 120, IPSA, Employee Focus EU, Human Rights, Renewables Users |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Capgemini Buy
| 360 METRICS | October 19, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 73 |
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| GROWTH | ||||||||
| GROWTH | 20 |
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| SAFETY | ||||||||
| SAFETY | 47 |
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| SENTIMENT | ||||||||
| SENTIMENT | 85 |
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| 360° VIEW | ||||||||
| 360° VIEW | 64 |
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ANALYSIS: With an Obermatt 360° View of 64 (better than 64% compared with alternatives), overall professional sentiment and financial characteristics for the stock Capgemini are above average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Capgemini. The consolidated Value Rank has an attractive rank of 73, which means that the share price of Capgemini is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 73% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 85, which means that professional investors are more optimistic about the stock than for 85% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 20, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 47, meaning the company has a riskier financing structure than 53 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 64, Capgemini is better positioned than 64% of all alternative stock investment opportunities based on the Obermatt Method. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 73) and positive market sentiment in the professional investor community (Sentiment Rank of 85), but growth expectations are below-average (Growth Rank of 20) and the financing structure is on the risky side(Safety Rank of 47). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (positive sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of Capgemini is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for Capgemini very positive
ANALYSIS: With an Obermatt Sentiment Rank of 85 (better than 85% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Capgemini is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Capgemini. Analyst Opinions are at a rank of 67 (better than 67% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 53, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Capgemini. The Professional Investors rank is 84, which means that currently, professional investors hold more stock in this company than in 84% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 56 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 56% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 85 (more positive than 85% compared with investment alternatives), Capgemini has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Capgemini stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Capgemini Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 73 (better than 73% compared with alternatives), Capgemini shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Capgemini. Price-to-Sales is 56 which means that the stock price compared with what market professionals expect for future sales is lower than for 56% of comparable companies, indicating a good value for Capgemini's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 71% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 58. Compared with other companies in the same industry, dividend yields of Capgemini are expected to be higher than for 70% of all competitors (a Dividend Yield rank of 70). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 73, is a buy recommendation based on Capgemini's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Capgemini based on its detailed value metrics.
Growth Strategy: Capgemini Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 20 (better than 20% compared with alternatives), Capgemini shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with all four metrics below average for Capgemini. Sales Growth has a rank of 14, which means that currently professionals expect the company to grow less than 86% of its competitors. The same is valid for Profit Growth, with a rank of 37, and Capital Growth with 39. In addition, Stock Returns have a below market rank of 45, which means that the stock returns have recently been below 55% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 20, is a sell recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. ...read more
Safety Strategy: Capgemini Debt Financing Safety below-average
| SAFETY METRICS | October 19, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 30 |
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| REFINANCING | ||||||||
| REFINANCING | 55 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 62 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 47 |
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ANALYSIS: With an Obermatt Safety Rank of 47 (better than 47% compared with alternatives), the company Capgemini has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Capgemini is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Capgemini. Refinancing is at 55, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 55% of its competitors. Liquidity is also good at 62, meaning the company generates more profit to service its debt than 62% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 30, which means the company has an above-average debt-to-equity ratio. It has more debt than 70% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 47 (worse than 53% compared with alternatives), Capgemini has a financing structure that is riskier than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Capgemini could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: Capgemini Below-Average Financial Performance
| COMBINED PERFORMANCE | October 19, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 73 |
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| GROWTH | ||||||||
| GROWTH | 20 |
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| SAFETY | ||||||||
| SAFETY | 62 |
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| COMBINED | ||||||||
| COMBINED | 36 |
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ANALYSIS: With an Obermatt Combined Rank of 36 (worse than 64% compared with investment alternatives), Capgemini (IT Consulting & oth. Services, France) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Capgemini are a good value (attractively priced) with a consolidated Value Rank of 73 (better than 73% of alternatives) but show below-average growth (Growth Rank of 20), and are riskily financed (Safety Rank of 47), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 36, is a hold recommendation based on Capgemini's financial characteristics. As the company Capgemini's key financial metrics exhibit good value (Obermatt Value Rank of 73) but low growth (Obermatt Growth Rank of 20) and risky financing practices (Obermatt Safety Rank of 47), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 73% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
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