Yahoo Finance CGI Group (GIB) Expands Clientele With A New AOUSC Contract
CGI Group GIB secured a pivotal 10-year contract with the Administrative Office of the U.S. Courts ("AOUSC") worth up to $143.5 million.
This indefinite-delivery, indefinite-quantity ("IDIQ") agreement marks CGI's commitment to delivering strategic consulting, advisory, application operations, management, hosting and support services powered by their innovative momentum solution.
CGI's contract with the U.S. Courts includes a one-year base period and nine optional one-year extensions to support digital transformation. The momentum solution streamlines finance processes, and the expert team ensures cost-effective solutions.
CGI’s Prospects Bright in 2023
CGI is benefiting from an expanding clientele and strong partner base. Shares have returned 14.6%, outperforming the Zacks Computer-Services industry’s 6.0% year to date. However, it has underperformed the Zacks Computer & Technology sector’s return of 31.4%.
CGI has been benefiting from solid demand for its business solutions. In the fiscal third quarter, the IP portfolio grew 12.4% year over year or 7.7% at constant currency. The number of consultants and professionals increased year over year by 3K, totaling 91,500 worldwide.
CGI Group, Inc. Price and Consensus
CGI Group, Inc. price-consensus-chart | CGI Group, Inc. Quote
Expanding clientele has been a critical catalyst. CGI’s solutions were selected by the likes of the U.S. Environmental Protection Agency and Bankgirot (Sweden’s payments clearinghouse), a government ministry in Germany.
Recently, CGI unveiled its All-Payments solution, certified for use on the Federal Reserve Bank's FedNow Service, offering financial institutions rapid deployment capabilities.
CGI also inked a partnership with Alimentation Couche-Tard worth $380 million to deliver managed IT services. As part of the ten-year partnership, CGI will deliver a comprehensive range of IT services and infrastructure support for the mission-critical business functions of Couche-Tard.
CGI anticipates robust growth in the face of challenging economic conditions, with a more than 33% increase in its managed services pipeline for industries such as manufacturing, retail and energy and utilities for the coming year.
Meanwhile, its IP pipeline is up by 30%. In government health care and insurance, a well-balanced pipeline shows a significant year-over-year increase of 20% across consulting, system integration, and managed services, reflecting strong demand for its offerings amid ongoing digitalization.
CGI is also investing in developing AI-based solutions and services and plans to invest $1 billion over the next three years.
The Zacks Consensus Estimate for fiscal 2023 and fiscal 2024 revenues are pegged at $10.93 billion and $11.4 billion, indicating growth of 8.42% and 4.36%, respectively.
Zacks Rank & Stocks to Consider
Currently, CGI has a Zacks Rank #4 (Sell).
Dell Technologies DELL, NVIDIA NVDA and Splunk SPLK are some other top-ranked stocks that investors can consider in the broader sector, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
DELL, NVDA and SPLK shares have returned 70.3%, 195.4% and 70.4%, respectively, on a year-to-date basis.
Long-term earnings growth rates for Dell Technologies, NVIDIA and SPLUNK are pegged at 12%,13.5% and 26.6%, respectively.
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