EPS of $2.27 matched estimates; revenue of $4.15B missed estimates of $4.24B. EBITDA of $857M beat estimates by 1.6%. Backlog is $31.5B, representing 1.9x annual sales. Sales rose for the quarter, but not significantly (3.3%). Adjusted earnings rose 3.9%. We do not think the quarter was so bad, but investors of course were looking for more. The stock decline reflects the 'non beat' but also continued negative sentiment towards software. GIB.A is now down 29% YTD and down 38% in a year. With its backlog and very low valuation (10x earnings) it is getting more interesting. But for now, it is a value trap and it is hard to predict any change in sentiment. At current levels it is not a stock we would be particularly concerned about, but at the same time it is hard to get too excited about it, either. We would see it as a hold. Versus other tech companies, it needs faster growth to get on investors' radar.
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