DCF Studio

    GIB-A.TO · TOR · Technology

    CGI Inc.

    Also onConsensus Drift

    Implied value per share

    CAD 394.84

    Market price

    CAD 97.01

    Implied upside

    +307.0%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    NoteRisk-free rate is an assumption: CAD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    CAD 394.84+307.0%
    Exit multiple
    CAD 160.59+65.5%
    Market price
    CAD 97.01

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (CAD). Outflows negative.

    0bn2bn3bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayCAD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueCAD 17.1bnCAD 18.3bnCAD 19.7bnCAD 21.1bnCAD 22.7bn+7.3%
    EBITCAD 2.8bnCAD 3.0bnCAD 3.2bnCAD 3.4bnCAD 3.7bn+7.3%
    NOPATCAD 2.1bnCAD 2.2bnCAD 2.4bnCAD 2.6bnCAD 2.7bn+7.3%
    Add depreciation & amortisationCAD 557.4mCAD 598.3mCAD 642.2mCAD 689.4mCAD 740.0m+7.3%
    Less capital expenditureCAD -338.3mCAD -363.1mCAD -389.8mCAD -418.4mCAD -449.1m+7.3%
    Less increase in working capitalCAD 13.5mCAD 14.4mCAD 15.5mCAD 16.6mCAD 17.9m-7.3%
    Free cashflow to firmCAD 2.3bnCAD 2.5bnCAD 2.6bnCAD 2.8bnCAD 3.1bn+7.3%
    Discount factor0.97510.92720.88160.83830.7971-
    Present valueCAD 2.2bnCAD 2.3bnCAD 2.3bnCAD 2.4bnCAD 2.4bn+2.1%
    Present Value Of The ForecastCAD 11.7bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate3.30%CAD assumption - no free live source available for this market (assumption)
    Equity risk premium5.50%Market assumption
    Beta0.447Reported 0.174, pulled toward 1.0 (Blume)
    Cost of equity5.76%Risk-free + beta x equity risk premium
    Cost of debt3.30%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationCAD 20.1bn82.3% of capital
    Total debtCAD 4.3bn17.7% of capital, book value as a proxy
    Tax rate25.9%Effective, capped at statutory
    WACC5.17%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareCAD 394.84

    87% of EV

    Forecast FCFF, final year
    CAD 3.1bn
    Capex at depreciation, working capital in reinvestment
    CAD 3.1bn
    Less reinvestment at g/ROIC (17.0% of NOPAT)
    CAD -519.2m
    Capitalised
    CAD 2.5bn
    ROIC (reported)
    14.7%
    Terminal value, undiscounted
    CAD 97.6bn
    Terminal value, discounted
    CAD 77.8bn
    Enterprise value
    CAD 89.5bn
    Less net debt
    CAD 3.5bn
    Equity value
    CAD 86.0bn

    Exit at 7.6x EBITDA

    Value per shareCAD 160.59

    70% of EV

    Terminal value, undiscounted
    CAD 33.6bn
    Terminal value, discounted
    CAD 26.8bn
    Enterprise value
    CAD 38.4bn
    Less net debt
    CAD 3.5bn
    Equity value
    CAD 35.0bn

    Spread between methods: 84%.

    Sensitivity

    Value per share (CAD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    3.17%707.36961.191593.875969.98—
    4.17%438.38514.20635.22859.441418.26
    5.17%315.99349.25394.83461.26567.25
    6.17%246.00263.38285.40314.25353.77
    7.17%200.69210.70222.78237.67256.53

    Outlined: this model. Green text: above today's price of 97.01. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year7.3%-18.8%-26.1pp
    EBIT margin16.3%3.1%-13.2pp
    Discount rate5.2%12.8%+7.6pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.