Snowflake (NYSE:SNOW) versus CGI Group (NYSE:GIB) Financial Analysis

CGI Group (NYSE:GIB) and Snowflake (NYSE:SNOW) are both large-cap technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, institutional ownership, valuation and risk.

Institutional & Insider Ownership

66.7% of CGI Group shares are owned by institutional investors. Comparatively, 65.1% of Snowflake shares are owned by institutional investors. 9.9% of CGI Group shares are owned by company insiders. Comparatively, 4.8% of Snowflake shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares CGI Group and Snowflake’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CGI Group	10.54%	18.83%	9.83%
Snowflake	-20.07%	-46.32%	-10.90%

Volatility & Risk

CGI Group has a beta of 0.47, suggesting that its stock price is 53% less volatile than the S&P 500. Comparatively, Snowflake has a beta of 1.33, suggesting that its stock price is 33% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for CGI Group and Snowflake, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CGI Group	0	7	0	0	2.00
Snowflake	1	5	34	1	2.85

CGI Group presently has a consensus price target of $83.67, suggesting a potential upside of 23.81%. Snowflake has a consensus price target of $414.24, suggesting a potential upside of 25.20%. Given Snowflake’s stronger consensus rating and higher possible upside, analysts clearly believe Snowflake is more favorable than CGI Group.

Earnings and Valuation

This table compares CGI Group and Snowflake”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CGI Group	$11.38 billion	1.23	$1.19 billion	$5.83	11.59
Snowflake	$4.68 billion	24.92	-$1.33 billion	($3.18)	-104.05

CGI Group has higher revenue and earnings than Snowflake. Snowflake is trading at a lower price-to-earnings ratio than CGI Group, indicating that it is currently the more affordable of the two stocks.

Summary

CGI Group beats Snowflake on 9 of the 15 factors compared between the two stocks.

About CGI Group

CGI Inc., together with its subsidiaries, provides information technology (IT) and business process services. Its services include the business and strategic IT consulting, systems integration, and software solutions. The company also provides application development, modernization and maintenance, holistic enterprise digitization, automation, hybrid and cloud management, and business process services; intellectual property-based solutions; business consulting; managed IT services; and IT infrastructure services. It serves clients operating in government, banking and capital market, health, utility, communication and media, oil and gas, space, manufacturing, insurance, life sciences, retail and consumer service, and transportation and logistics sectors. The company operates in Canada, France, Spain, Portugal, the United States, Germany, Sweden, Norway, the United Kingdom, Australia, Finland, Poland, Baltics, the Netherlands, Denmark, Czech Republic, India, the Philippines, Asia Pacific, and internationally. Western and Southern Europe; Australia; Scandinavia; Finland, Poland, and Baltics; the United States; the United Kingdom; and the Asia Pacific. The company was formerly known as CGI Group Inc. and changed its name to CGI Inc. in January 2019. CGI Inc. was founded in 1976 and is headquartered in Montreal, Canada.

About Snowflake

Snowflake Inc. provides a cloud-based data platform for various organizations in the United States and internationally. Its platform offers Data Cloud, which enables customers to consolidate data into a single source of truth to drive meaningful business insights, build data-driven applications, and share data and data products, as well as applies artificial intelligence (AI) for solving business problems. The company was formerly known as Snowflake Computing, Inc. and changed its name to Snowflake Inc. in April 2019. Snowflake Inc. was incorporated in 2012 and is based in Bozeman, Montana.