Ever wondered if Capgemini’s current share price is a bargain or just fair? You’re not alone. In a market like this, knowing what you’re really getting is more important than ever.
While the stock has gained 2.9% over the past week and 10% in the last month, it is still down 16% year-to-date and 18.1% over the last twelve months. This hints at shifting investor sentiment and potential opportunities.
Investors are reacting to recent headlines spotlighting Capgemini’s expanding role in digital transformation projects across key industries, from banking to energy. News of strategic partnerships and large-scale contract wins has helped explain the recent bump in the share price.
Capgemini scores a strong 5 out of 6 on our valuation checks, suggesting it could be undervalued by most measures. Let’s break down what this actually means and, even better, explore a smarter way to think about valuation by the end of this article.
The Discounted Cash Flow (DCF) model estimates a company’s intrinsic value by forecasting its future cash flows and discounting them back to today’s values. This approach aims to capture the true, underlying worth of a business based on its ability to generate cash over time, rather than just its market price or profits.
For Capgemini, analysts report the last twelve months’ Free Cash Flow at €2.16 billion. Looking ahead, they project gradual growth, with forecasts of €2.18 billion by 2026 and €2.67 billion by 2029. Beyond these analyst estimates, Simply Wall St extrapolates the numbers even further out, expecting Capgemini to generate over €3.3 billion in annual Free Cash Flow by 2035. All figures are provided in euros and reflect billions due to the company’s scale.
Applying the full set of cash flow projections and discounting them appropriately, the DCF model calculates an intrinsic fair value of €213.92 per share. In comparison to the current stock price, this figure suggests the shares are trading at a 38.5% discount. This means Capgemini is significantly undervalued by this method.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Capgemini is undervalued by 38.5%. Track this in your watchlist or portfolio, or discover 872 more undervalued stocks based on cash flows.
CAP Discounted Cash Flow as at Nov 2025
The Price-to-Earnings (PE) ratio is a widely used valuation tool for profitable companies because it highlights how much investors are willing to pay for each euro of current earnings. For businesses like Capgemini, which generate steady profits, the PE ratio helps assess whether the stock price makes sense in relation to actual results.
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Growth expectations and risk play a key role in determining what a “normal” or fair PE ratio should be. Faster-growing, stable companies generally command higher PE ratios, while slower-growing or riskier businesses tend to trade at lower multiples. Finding the right benchmark means looking at several reference points.
Capgemini’s current PE stands at 14.3x, which is noticeably lower than the IT industry average of 21.8x and below the average of its closest peers at 11.5x. On the surface, this suggests that Capgemini could be reasonably priced or even offer a discount compared to the wider market.
However, Simply Wall St’s “Fair Ratio” takes valuation a step further. Unlike the basic peer or industry average approach, the Fair Ratio (25.6x for Capgemini) factors in growth outlook, profitability, company size, and specific risks alongside wider industry context. This produces a more tailored benchmark for what a fair multiple should be, beyond broad comparisons.
Comparing Capgemini’s actual PE of 14.3x with its Fair Ratio of 25.6x reveals a meaningful gap. This suggests the market may be overlooking the company’s earnings potential and growth profile, making the stock look undervalued using this comprehensive measure.
Result: UNDERVALUED
ENXTPA:CAP PE Ratio as at Nov 2025
PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1401 companies where insiders are betting big on explosive growth.
Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is your personal, easy-to-use investment story that connects what you believe about a company, such as Capgemini’s future revenue, earnings and margins, to a financial forecast and, ultimately, a fair value. Available to everyone in the Simply Wall St Community, Narratives let you go beyond just the numbers by tying your assumptions and insights directly to what you think the company is really worth.
With Narratives, you can track your reasoning and see at a glance whether Capgemini’s current share price is above or below your fair value, helping you confidently decide when it might be time to buy or sell. The real power of Narratives is that they update dynamically whenever new headlines or earnings data emerge, so your analysis can evolve as the story does.
For instance, one investor might have a bullish Narrative expecting Capgemini’s earnings to hit €2.3 billion and a price target of €214, driven by confidence in its AI partnerships and digital expansion. Meanwhile, another investor may build a more cautious Narrative with an €1.8 billion earnings forecast and a fair value of €134, reflecting concerns about margin pressures and market risks. Narratives empower you to explore, compare and refine your own view, making smarter investment decisions truly accessible.
Do you think there’s more to the story for Capgemini? Head over to our Community to see what others are saying!
ENXTPA:CAP Community Fair Values as at Nov 2025
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.
Companies discussed in this article include CAP.PA.
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