CGI's Acquisition of Callibrity Adds AI Expertise Amid Rising Debt
On September 8, CGI Inc. (NYSE:GIB) completed the acquisition of Cincinnati-based consulting firm Callibrity, adding 120 consultants with expertise in production-ready artificial intelligence and platform engineering. The deal follows CGI's fiscal third-quarter results where diluted earnings per share rose by 22.5%, despite revenue growing only slightly at 2.5%. This discrepancy is attributed to a significant stock buyback program that reduced the number of shares outstanding, amplifying EPS growth. Bookings reached $4.20 billion in Q3 with a book-to-bill ratio of 108.1% and backlog rising to $31.79 billion—up from $30.58 billion a year ago. However, CGI's net debt increased to $3.68 billion from $3.12 billion the previous year, pushing its net-debt-to-capitalization ratio up to 26.6%. The company is increasingly relying on debt financing for buybacks and acquisitions rather than internal cash generation. The stock currently trades at a forward P/E of 10.16 with hedge fund ownership declining from 21 funds to 14 in the most recent quarter, suggesting market skepticism about CGI's long-term growth potential despite its strong EPS performance.
Tickers: $GIB
Topics: AI Consulting Debt Load Earnings Growth Share Buybacks