Sodexo S.A. (SW.PA) stock analysis

In our weekly check, Sodexo S.A. is graded C (A to F). Of 25 checks on debt, profit, cash flow and trend: 11 pass, warnings: 10, red flags: 4.

About Sodexo S.A.

Sodexo S.A. is an Industrials company (Specialty Business Services) based in France, listed on PAR as SW.PA.

What our checks show for SW.PA

Red flags

• The net margin fell by 2 points over 5 years, to 1.3%: the company keeps less of each sale as profit.
• The gross margin fell by 3.8 points, to 10.6%: costs are rising faster than prices.
• The net margin is only 1.3%: little room if costs rise.
• The dividend takes 116% of profit: little cushion if profit falls.

Warning signs

• Net debt is 4.4x a year of EBITDA (debt/equity 1.24). That limits room in a downturn and raises refinancing risk.
• Analysts expect only about 4.4% a year of growth in revenue.
• Revenue grew only 1.9% a year over the last 3 years.
• Earnings per share fell 27.3% a year over the last 3 years.
• Net profit fell 27.4% a year over the last 3 years.
• Free cash flow is only 2.3% of revenue.
• The stock has fallen as much as 59% from a peak. Would you have held through that?
• The stock is still below its previous peak.
• Thinly traded (about 258 thousand shares a day): buying and selling can move the price.
• Return on capital (ROCE) is only 9.3%.

Strengths

• Operating cash flow is 2.98x net profit: the profit arrives as real cash.
• Analysts expect earnings per share to grow about 32.1% a year over the next years.
• Beta 0.21: the stock usually moves less than the market.
• Pay in shares is only 0% of free cash flow.

Similar companies

RTO.L · ITRK.L · GGPS3.SA · ARMK · ELIS.PA · ULS

Questions

What grade does Sodexo S.A. (SW.PA) have?

In our weekly check, Sodexo S.A. is graded C (A to F). Of 25 checks on debt, profit, cash flow and trend: 11 pass, warnings: 10, red flags: 4. The grade is a risk check, not a buy or sell recommendation.

What are the main risks of SW.PA stock?

This week's biggest flags for Sodexo S.A.: Margins falling, Gross margin falling, Thin margins. In total 14 of 25 checks show a warning or a red flag.

What does Sodexo S.A. do?

Sodexo S.A. is an Industrials company (Specialty Business Services) based in France, listed on PAR as SW.PA.

The grade is a risk check, not a price forecast, and not investment advice. In our 10-year test (S&P 500, 2016-2026), stocks we graded A or B fell more than 30% 2-3 times less often than D or F, without a lower average return.

Updated 2026-10-31

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