CGI (TSX:GIB.A) Expands With AgVantis, Is The Stock Still Cheap?

CGI stock reacts to new AgVantis partnership

CGI (TSX:GIB.A) is back in focus after its unit, CGI Technologies and Solutions Inc., announced a long term partnership with AgVantis Inc. to support Farm Credit institutions and rural finance clients.

The AgVantis news lands as CGI trades at CA$103.85, with a 90 day share price return of 5.54%, but a year to date share price decline of 17.07% and a 1 year total shareholder return that has fallen 21.60%. This suggests recent momentum is improving after a tougher stretch for long term holders.

Compare CGI’s momentum shift with a curated group of resilient tech and services stocks in our 11 resilient stocks with low risk scores to see how its risk profile stacks up.

CGI’s recent uptick and the AgVantis agreement put the stock in a different light for anyone watching the pullback. Do the current numbers still leave enough potential upside to compensate for the risks?

Most Popular Narrative: 13.3% Undervalued

CGI’s most followed narrative points to a fair value of about CA$119.85, which sits meaningfully above the current CA$103.85 share price.

The ongoing acceleration in digital transformation initiatives particularly in cloud migration, AI driven automation, and data analytics continues to boost client demand for CGI’s managed services and proprietary IP across both public and private sectors, which is likely to drive sustained revenue growth and an increasing proportion of higher margin recurring revenue.

Read the complete narrative.

Want to understand why this narrative still sees upside in CGI despite a softer share price history? The answer leans heavily on future earnings mix, margin assumptions and how much investors are willing to pay for those projected profits.

Result: Fair Value of CA$119.85 (UNDERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, CGI’s story could change quickly if acquisition integration drags on margins, or if large government and enterprise clients delay or scale back new projects.

Find out about the key risks to this CGI narrative.

Next Steps

Given the mixed signals around CGI right now, it makes sense to move quickly and test the thesis against the underlying data yourself. A good place to start is the 4 key rewards.

Looking for more investment ideas beyond CGI?

If you are serious about putting this CGI work to use, do not stop here. The real edge often comes from comparing it with other strong opportunities.

This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.

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