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CGI Inc. (GIB) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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CGI Inc. (GIB)

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Intrinsic Value (DCF)

Current$92.64
→
Intrinsic$183.53
+98%
$120.29$183.53$303.69
Market implies 1% growth for 5 years
DCF analysis suggests GIB could have 98% upside at 12% growth — verify assumptions match your view.
At $93, the market prices in only 1% growth — below historical 12%, suggesting low expectations.
Range: Bear $120 → Bull $304. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →8%10%12%14%
8%$223$244$267$291
10%$153$168$184$200
12%$115$126$137$150
14%$90$99$108$118

Bull Case

  • Bull case ($304) offers 228% upside at 14% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (1%) ≤ historical CAGR (12%)

Bear Case

  • Bear case ($120) with 9% growth, 12% discount rate
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5-Year Free Cash Flow Projection

Year 1$2.37B
Year 2$2.65B
Year 3$2.96B
Year 4$3.31B
Year 5$3.71B
Terminal$54.53B

📐 Model Inputs

Growth Rate11.8%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$2.12BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is GIB stock undervalued or overvalued?
🟢 UNDERVALUED

GIB trades at $92.64 vs. our DCF-derived intrinsic value of $183.53, implying +98% upside. At a 10.0% WACC and 11.8% projected FCF growth, the market appears to be underpricing the present value of GIB's future cash flows. The bear case ($123.77) still suggests upside, providing margin of safety.

What is GIB's intrinsic value?

Using a 5-year DCF model: Base FCF of $2.12B, projected at 11.8% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $3.61B net debt and dividing by 0.23B shares: Bear $123.77 | Base $183.53 | Bull $266.21. Current price $92.64 implies +98% to base case.

How is GIB's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 11.8% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($44.99B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 21.2x.