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1. Company Snapshot

1.a. Company Description

Capgemini SE provides consulting, digital transformation, technology, and engineering services primarily in the Americas, Europe, the Middle East, Africa, and the Asia-Pacific.The company offers strategy and transformation services, including strategy, technology, data science, and creative design to support various clients within the digital economy.It also provides applications and technology services that helps the clients to develop, modernize, extend, and secure their IT and digital environment using the latest technologies, as well as offers local technology services in cloud, cybersecurity, quality assurance, testing, and new technology fields.


In addition, the company offers business process outsourcing and transactional services, as well as installation and maintenance services for its clients' IT infrastructures in data centers or in the cloud.It serves various industries, including consumer goods and retail; energy and utilities; banking, capital markets, and insurance; manufacturing and life sciences; public sector; telecommunications, media, and technology; and services.Capgemini SE has a strategic partnership with CONA Services LLC to develop digital solutions for the consumer products industry and retail customers.


The company was founded in 1967 and is headquartered in Paris, France.

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1.b. Last Insights on CAP

Capgemini SE's recent performance has been positively driven by several factors. The company upgraded its full-year revenue outlook, citing improved performance in North America, the U.K., and Ireland. Additionally, Capgemini expanded its strategic alliance with Siemens around AI-driven solutions. The company's third-quarter revenue rose 2.9% in constant currency terms, driven by solid demand for AI solutions. Furthermore, Capgemini announced plans for a dedicated share buyback envelope, which could enhance shareholder value. Its growth prospects are supported by a strong position in digital transformation.

1.c. Company Highlights

2. Capgemini's H1 2025: A Mixed Bag

Capgemini's H1 2025 revenue reached €11.107 billion, up 0.2% year-on-year, with Q2 revenue growth improving to 0.7%. Bookings totaled €11.993 billion, up 2.1%. The operating margin was €1.377 billion or 12.4% of revenues, stable year-on-year. Net profit group share was €724 million, down 13% year-on-year, with basic EPS at €4.26 and normalized EPS up 2% to €6. Organic free cash flow was €60 million. The company's performance was mixed, with revenue growth improving in Q2 but net profit declining.

Publication Date: Aug -01

📋 Highlights
  • Revenue Growth: Capgemini's H1 2025 revenue reached €11.107 billion, up 0.2% year-on-year, with Q2 growth improving to 0.7%
  • Bookings Increase: Bookings rose 2.1% to €11.993 billion, reflecting strong demand and growth momentum
  • Net Profit Decline: Net profit group share declined 13% to €724 million, with basic EPS at €4.26 and normalized EPS up 2% to €6
  • Share Buyback Program: A new €2 billion multiyear share buyback program was approved to reduce the number of shares over the next 2-3 years
  • Operational Outlook: The company narrowed its constant currency growth outlook to -1% to 1%, with an operating margin target of 13.3-13.5% and organic free cash flow of around €1.9 billion

Financial Highlights

The company's financial performance was marked by a stable operating margin and a decline in net profit. The EPS came out at €6, beating estimates of €5.37. The P/E ratio of 13.55 suggests that the stock is trading at a relatively fair valuation. The EV/EBITDA ratio of 8.38 also indicates that the stock is not overvalued. The free cash flow yield of 10.45% is attractive, suggesting that the company has a strong ability to generate cash.

Segment Performance

The company's segments showed varying performances. Revenue growth in the UK and Ireland was strong, with a high margin. However, growth in France remained sluggish, stable at around -5%. The weakness is broad and not solely attributed to Aerospace; Automotive has also played a role. Aiman Ezzat notes that actions started in Q3 last year are beginning to have an impact, and they look forward to continuing to progress.

Guidance and Outlook

The company narrows its constant currency growth outlook to between -1% and 1%, with an operating margin target of 13.3-13.5% and organic free cash flow objective of around €1.9 billion. The acquisition of WNS is not included in the outlook. Guidance implies a similar performance in H2 as seen in H1. Aiman Ezzat remains cautious due to the changing environment and uncertainty, expecting Q3 to be similar to Q2, but notes too much uncertainty to predict Q4.

Share Buyback and Capital Allocation

The company has a multiyear share buyback program, aiming to reduce the overall number of shares over the next 2-3 years, beyond just offsetting management incentives. The company also redeemed an EUR800 million bond issued in June 2020 in 2025. The new €2 billion multiyear share buyback program has been approved, demonstrating the company's commitment to returning value to shareholders.

Conclusion on Valuation

Based on the valuation metrics, the stock seems to be trading at a fair valuation. The P/E ratio of 13.55 and EV/EBITDA ratio of 8.38 suggest that the stock is not overvalued. However, the dividend yield of 2.73% is relatively low. Analysts estimate next year's revenue growth at 2.3%, which is a relatively modest growth outlook.

3. NewsRoom

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Is TotalEnergies (ENXTPA:TTE) Still Undervalued After Its Recent Steady Share Price Climb?

Dec -03

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TotalEnergies Says Mozambique LNG Partners Will Cover Cash Shortfall After U.K., Dutch Pullout

Dec -02

Source: wsj.com

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Mozambique LNG : Clarification by TotalEnergies on Financing of the Project

Dec -02

Source:

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TotalEnergies, TES, Osaka Gas, Toho Gas and ITOCHU Partner Up to Develop the Live Oak Project for e-NG Production in Nebraska

Dec -02

Source:

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Capgemini develops agentic AI solution to support UNICEF in improving youth access to green careers

Dec -02

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Transaction in Own Shares

Dec -01

Source:

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TotalEnergies SE: Disclosure of Transactions in Own Shares

Dec -01

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TotalEnergies to Sell Stake in Nigeria Projects to Chevron

Dec -01

Source: wsj.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.79%)

6. Segments

Strategy & Transformation

Expected Growth: 15.6%

Increasing demand for digital transformation and strategy consulting services, driven by clients' requirements to stay competitive and adapt to changing market conditions, will fuel growth in Capgemini's Strategy & Transformation consulting services.

Applications & Technology

Expected Growth: 7.1%

Capgemini's growth is driven by increasing adoption of cloud services, digital transformation, and cybersecurity, as well as its strong partnerships and acquisitions in the industry.

Operations & Engineering

Expected Growth: 10.3%

Capgemini's Operations & Engineering segment growth is driven by increasing demand for digital transformation in industries such as manufacturing, aerospace, and automotive, as well as growing need for business process outsourcing and IT outsourcing services.

7. Detailed Products

Consulting Services

Capgemini's consulting services help clients to transform their business by providing strategic guidance, innovative solutions, and industry expertise.

Digital Transformation

Capgemini's digital transformation services enable clients to innovate, optimize, and transform their business models, products, and services using digital technologies.

Cloud Services

Capgemini's cloud services help clients to migrate, manage, and optimize their applications and infrastructure in the cloud, ensuring scalability, flexibility, and cost savings.

Cybersecurity Services

Capgemini's cybersecurity services help clients to protect their business from cyber threats by providing threat detection, incident response, and security consulting services.

Data and Analytics

Capgemini's data and analytics services help clients to unlock insights from their data, enabling them to make informed decisions, improve operations, and drive innovation.

Application Services

Capgemini's application services help clients to design, develop, and maintain their applications, ensuring they are scalable, secure, and meet business needs.

Infrastructure Services

Capgemini's infrastructure services help clients to design, implement, and manage their IT infrastructure, ensuring it is scalable, secure, and efficient.

Business Process Outsourcing (BPO)

Capgemini's BPO services help clients to outsource their business processes, enabling them to focus on core business activities, reduce costs, and improve efficiency.

8. Capgemini SE's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Capgemini SE is medium, as there are some alternatives available for its services, but they are not highly attractive to customers.

Bargaining Power Of Customers

The bargaining power of customers for Capgemini SE is low, as the company has a strong brand reputation and provides customized services, making it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Capgemini SE is medium, as the company relies on a few key suppliers for its operations, but it also has some bargaining power due to its large scale of operations.

Threat Of New Entrants

The threat of new entrants for Capgemini SE is low, as the company has a strong brand reputation and it is difficult for new entrants to replicate its services and scale of operations.

Intensity Of Rivalry

The intensity of rivalry for Capgemini SE is high, as the company operates in a highly competitive industry with many established players, and it needs to continuously innovate and differentiate itself to maintain its market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 36.45%
Debt Cost 3.95%
Equity Weight 63.55%
Equity Cost 9.26%
WACC 7.32%
Leverage 57.37%

11. Quality Control: Capgemini SE passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Neurones

A-Score: 6.0/10

Value: 5.1

Growth: 6.6

Quality: 7.1

Yield: 6.9

Momentum: 2.5

Volatility: 8.0

1-Year Total Return ->

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Nedap

A-Score: 6.0/10

Value: 2.0

Growth: 3.4

Quality: 7.0

Yield: 6.2

Momentum: 10.0

Volatility: 7.3

1-Year Total Return ->

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Computacenter

A-Score: 5.7/10

Value: 4.9

Growth: 6.9

Quality: 5.7

Yield: 5.0

Momentum: 6.0

Volatility: 5.7

1-Year Total Return ->

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IBM

A-Score: 5.5/10

Value: 1.5

Growth: 3.0

Quality: 6.3

Yield: 6.0

Momentum: 8.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Accenture

A-Score: 4.8/10

Value: 3.7

Growth: 5.8

Quality: 7.6

Yield: 4.4

Momentum: 1.0

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Capgemini

A-Score: 4.6/10

Value: 4.9

Growth: 6.1

Quality: 5.5

Yield: 3.8

Momentum: 1.0

Volatility: 6.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

144.6$

Current Price

144.6$

Potential

-0.00%

Expected Cash-Flows