Capgemini (ENXTPA:CAP): Reassessing Valuation After a Recent Share Price Rebound

Capgemini (ENXTPA:CAP) has quietly bounced over the past month, even though recent returns over the past year still trail the broader market. That gap is exactly what makes the stock interesting now.

See our latest analysis for Capgemini.

That recent 30 day share price return of 6.3% sits against a weaker year to date share price performance, while the 5 year total shareholder return of 20.4% suggests the long term story is still intact and momentum may be rebuilding.

If Capgemini has you thinking about where digital transformation leaders might go next, it is worth exploring other high growth tech and AI stocks that could benefit from similar trends.

With earnings still growing and the share price trading at a material discount to analyst targets and intrinsic value estimates, is Capgemini a quietly undervalued digital leader, or is the market already pricing in its next leg of growth?

Most Popular Narrative Narrative: 18% Undervalued

Compared to the last close of €141.65, the most followed narrative sees fair value closer to €172, implying meaningful upside if its forecasts play out.

The multiyear shift in portfolio mix towards value added digital, cloud, and data/AI solutions, along with disciplined SG&A management and operational efficiency, is designed to offset near term gross margin pressures and set up the group for normalized EPS growth and operating margin resilience as growth returns. Recent and ongoing investments in strategic frameworks (such as the Resonance AI framework and RAISE platform) and targeted acquisitions (e.g., WNS), aimed at deepening capabilities in high demand sectors and services, position Capgemini to target accelerated earnings growth through both revenue expansion and integration synergies as large scale digital transformation and automation trends intensify globally.

Read the complete narrative.

Want to see the math behind that upside? The growth, margins, and future earnings multiple that power this fair value are anything but conservative.

Result: Fair Value of €171.93 (UNDERVALUED)

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

However, softening demand in key European industries, along with persistent pricing pressure in cloud and AI deals, could quickly challenge this upside-focused narrative.

Find out about the key risks to this Capgemini narrative.

Build Your Own Capgemini Narrative

If you see the story differently, or simply prefer to review the numbers on your own, you can build a personalized view in just a few minutes, Do it your way.

A great starting point for your Capgemini research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

Capgemini might be compelling, but you may miss other opportunities our screeners surface across growth, value, income, and innovation themes.

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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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