CGI Group, Inc.

CGI Group, Inc. (GIB - Snapshot Report) reported better than expected third-quarter results in late July, adding that it had paid down its debt to just $15 million from almost $300 million earlier in the year.

Company Description

CGI Group, Inc., through its subsidiaries, provides information technology and business process services, specializing in systems integration and consulting services. The company was founded in 1976 and has a market cap of $3.21 billion.

Shares of GIB are up big over the last 6 months on the heels of market stability and better than expected third-quarter results, reported on July 29.

Third-Quarter Results

Sales were mostly flat from last year, coming in at $950.4 million. But earnings came in ahead of expectations at 23 cents per share, 2 cents better than the Zacks Consensus Estimate.

The company has produced steady earnings over the last year, beating in each of the last 4 quarters by an average of 2 cents, or 7.51%.

Paying Down Debt

CGI noted that it made considerable progress in paying down most of its debt, with payments totaling $271.2 million through the first 9 months of the year, leaving just $15.9 million remaining.

Estimates Up

After the solid quarterly performance and the debt repayments, estimates moved higher, with the current year adding 4 cents and climbing to 93 cents per share. The next-year estimate is pegged at $1.01, a 9% growth projection.

Valuation

In spite of the big gains of the last few months, this stock still trades in value territory with a P/E multiple of just 11X, a nice discount to the markets multiple of about 18X.

The Chart

Shares of GIB have been rallying since bottoming out just above $6.50 in early March, having recently topped off above $10.50. Take a look at the nice move below.

Read the full analyst report on GIB