CSG SYSTEMS INTL INC (CSGS) Stock Fundamental Analysis
NASDAQ:CSGS - Nasdaq - US1263491094 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to CSGS. CSGS was compared to 82 industry peers in the IT Services industry. Both the profitability and the financial health of CSGS get a neutral evaluation. Nothing too spectacular is happening here. CSGS scores decently on growth, while it is valued quite cheap. This could make an interesting combination.
1. Profitability
1.1 Basic Checks
CSGS had positive earnings in the past year.
In the past year CSGS had a positive cash flow from operations.
Each year in the past 5 years CSGS has been profitable.
CSGS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
CSGS has a Return On Assets of 4.69%. This is in the better half of the industry: CSGS outperforms 62.03% of its industry peers.
Looking at the Return On Equity, with a value of 22.56%, CSGS belongs to the top of the industry, outperforming 86.08% of the companies in the same industry.
CSGS's Return On Invested Capital of 10.86% is fine compared to the rest of the industry. CSGS outperforms 77.22% of its industry peers.
The Average Return On Invested Capital over the past 3 years for CSGS is above the industry average of 9.86%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.69% | ||
| ROE | 22.56% | ||
| ROIC | 10.86% |
ROA(3y)4.36%
ROA(5y)4.79%
ROE(3y)17.74%
ROE(5y)17.6%
ROIC(3y)11.97%
ROIC(5y)11.15%
1.3 Margins
CSGS has a better Profit Margin (5.52%) than 65.82% of its industry peers.
CSGS's Profit Margin has declined in the last couple of years.
With a decent Operating Margin value of 11.35%, CSGS is doing good in the industry, outperforming 73.42% of the companies in the same industry.
CSGS's Operating Margin has declined in the last couple of years.
The Gross Margin of CSGS (47.67%) is better than 69.62% of its industry peers.
CSGS's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.35% | ||
| PM (TTM) | 5.52% | ||
| GM | 47.67% |
OM growth 3Y2.31%
OM growth 5Y-1.57%
PM growth 3Y-1.49%
PM growth 5Y-5.59%
GM growth 3Y1.06%
GM growth 5Y-0.49%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so CSGS is still creating some value.
CSGS has less shares outstanding than it did 1 year ago.
The number of shares outstanding for CSGS has been reduced compared to 5 years ago.
The debt/assets ratio for CSGS is higher compared to a year ago.
2.2 Solvency
CSGS has an Altman-Z score of 3.29. This indicates that CSGS is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.29, CSGS is in line with its industry, outperforming 51.90% of the companies in the same industry.
The Debt to FCF ratio of CSGS is 4.86, which is a neutral value as it means it would take CSGS, 4.86 years of fcf income to pay off all of its debts.
CSGS's Debt to FCF ratio of 4.86 is in line compared to the rest of the industry. CSGS outperforms 50.63% of its industry peers.
A Debt/Equity ratio of 1.84 is on the high side and indicates that CSGS has dependencies on debt financing.
With a Debt to Equity ratio value of 1.84, CSGS is not doing good in the industry: 75.95% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.84 | ||
| Debt/FCF | 4.86 | ||
| Altman-Z | 3.29 |
ROIC/WACC1.03
WACC10.52%
2.3 Liquidity
CSGS has a Current Ratio of 1.58. This is a normal value and indicates that CSGS is financially healthy and should not expect problems in meeting its short term obligations.
CSGS's Current ratio of 1.58 is in line compared to the rest of the industry. CSGS outperforms 51.90% of its industry peers.
A Quick Ratio of 1.58 indicates that CSGS should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.58, CSGS is in line with its industry, outperforming 51.90% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.58 | ||
| Quick Ratio | 1.58 |
3. Growth
3.1 Past
CSGS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.39%, which is quite good.
The Earnings Per Share has been growing slightly by 3.69% on average over the past years.
The Revenue has been growing slightly by 1.39% in the past year.
The Revenue has been growing slightly by 5.97% on average over the past years.
EPS 1Y (TTM)11.39%
EPS 3Y5.66%
EPS 5Y3.69%
EPS Q2Q%15.22%
Revenue 1Y (TTM)1.39%
Revenue growth 3Y5.69%
Revenue growth 5Y5.97%
Sales Q2Q%10.73%
3.2 Future
Based on estimates for the next years, CSGS will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.35% on average per year.
CSGS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.25% yearly.
EPS Next Y19.79%
EPS Next 2Y12.28%
EPS Next 3Y9.48%
EPS Next 5Y13.35%
Revenue Next Year7.57%
Revenue Next 2Y5.16%
Revenue Next 3Y4.59%
Revenue Next 5Y3.25%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 13.61, CSGS is valued correctly.
Based on the Price/Earnings ratio, CSGS is valued cheaper than 88.61% of the companies in the same industry.
When comparing the Price/Earnings ratio of CSGS to the average of the S&P500 Index (28.58), we can say CSGS is valued rather cheaply.
CSGS is valuated reasonably with a Price/Forward Earnings ratio of 11.76.
89.87% of the companies in the same industry are more expensive than CSGS, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 24.47. CSGS is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.61 | ||
| Fwd PE | 11.76 |
4.2 Price Multiples
86.08% of the companies in the same industry are more expensive than CSGS, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, CSGS is valued cheaper than 89.87% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.29 | ||
| EV/EBITDA | 9.69 |
4.3 Compensation for Growth
CSGS's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of CSGS may justify a higher PE ratio.
PEG (NY)0.69
PEG (5Y)3.69
EPS Next 2Y12.28%
EPS Next 3Y9.48%
5. Dividend
5.1 Amount
CSGS has a Yearly Dividend Yield of 2.18%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.96, CSGS pays a better dividend. On top of this CSGS pays more dividend than 91.14% of the companies listed in the same industry.
CSGS's Dividend Yield is comparable with the S&P500 average which is at 2.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.18% |
5.2 History
The dividend of CSGS has a limited annual growth rate of 5.85%.
CSGS has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of CSGS decreased recently.
Dividend Growth(5Y)5.85%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
52.77% of the earnings are spent on dividend by CSGS. This is a bit on the high side, but may be sustainable.
CSGS's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP52.77%
EPS Next 2Y12.28%
EPS Next 3Y9.48%
CSG SYSTEMS INTL INC
NASDAQ:CSGS (1/24/2025, 8:00:01 PM)
After market: 54.57 0 (0%)54.57
-0.41 (-0.75%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners102.37%
Inst Owner Change0.56%
Ins Owners4.03%
Ins Owner Change1.31%
Market Cap1.59B
Analysts86.25
Price Target67.89 (24.41%)
Short Float %6.33%
Short Ratio7.88
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.18% |
Yearly Dividend1.12
Dividend Growth(5Y)5.85%
DP52.77%
Div Incr Years1
Div Non Decr Years1
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)3.87%
Min EPS beat(2)-2.01%
Max EPS beat(2)9.76%
EPS beat(4)3
Avg EPS beat(4)4.65%
Min EPS beat(4)-2.01%
Max EPS beat(4)9.76%
EPS beat(8)6
Avg EPS beat(8)4.51%
EPS beat(12)9
Avg EPS beat(12)4.79%
EPS beat(16)12
Avg EPS beat(16)4.53%
Revenue beat(2)1
Avg Revenue beat(2)0.39%
Min Revenue beat(2)-3.19%
Max Revenue beat(2)3.97%
Revenue beat(4)1
Avg Revenue beat(4)-2.68%
Min Revenue beat(4)-6.82%
Max Revenue beat(4)3.97%
Revenue beat(8)3
Avg Revenue beat(8)-1.44%
Revenue beat(12)7
Avg Revenue beat(12)1%
Revenue beat(16)11
Avg Revenue beat(16)2.77%
PT rev (1m)0%
PT rev (3m)4.36%
EPS NQ rev (1m)0%
EPS NQ rev (3m)14.63%
EPS NY rev (1m)0%
EPS NY rev (3m)2.15%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)2.66%
Revenue NY rev (1m)-0.25%
Revenue NY rev (3m)1%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.61 | ||
| Fwd PE | 11.76 | ||
| P/S | 1.35 | ||
| P/FCF | 14.29 | ||
| P/OCF | 11.96 | ||
| P/B | 5.5 | ||
| P/tB | N/A | ||
| EV/EBITDA | 9.69 |
EPS(TTM)4.01
EY7.35%
EPS(NY)4.64
Fwd EY8.5%
FCF(TTM)3.82
FCFY7%
OCF(TTM)4.56
OCFY8.36%
SpS40.49
BVpS9.91
TBVpS-5.54
PEG (NY)0.69
PEG (5Y)3.69
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.69% | ||
| ROE | 22.56% | ||
| ROCE | 15.06% | ||
| ROIC | 10.86% | ||
| ROICexc | 12.54% | ||
| ROICexgc | 30.16% | ||
| OM | 11.35% | ||
| PM (TTM) | 5.52% | ||
| GM | 47.67% | ||
| FCFM | 9.43% |
ROA(3y)4.36%
ROA(5y)4.79%
ROE(3y)17.74%
ROE(5y)17.6%
ROIC(3y)11.97%
ROIC(5y)11.15%
ROICexc(3y)16.1%
ROICexc(5y)14.87%
ROICexgc(3y)911.14%
ROICexgc(5y)559.45%
ROCE(3y)16.59%
ROCE(5y)15.46%
ROICexcg growth 3Y5.33%
ROICexcg growth 5Y-2.09%
ROICexc growth 3Y5.99%
ROICexc growth 5Y1.29%
OM growth 3Y2.31%
OM growth 5Y-1.57%
PM growth 3Y-1.49%
PM growth 5Y-5.59%
GM growth 3Y1.06%
GM growth 5Y-0.49%
F-Score6
Asset Turnover0.85
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.84 | ||
| Debt/FCF | 4.86 | ||
| Debt/EBITDA | 2.57 | ||
| Cap/Depr | 29.42% | ||
| Cap/Sales | 1.83% | ||
| Interest Coverage | 4.86 | ||
| Cash Conversion | 64.05% | ||
| Profit Quality | 170.79% | ||
| Current Ratio | 1.58 | ||
| Quick Ratio | 1.58 | ||
| Altman-Z | 3.29 |
F-Score6
WACC10.52%
ROIC/WACC1.03
Cap/Depr(3y)41.29%
Cap/Depr(5y)44.69%
Cap/Sales(3y)2.78%
Cap/Sales(5y)3.01%
Profit Quality(3y)124.77%
Profit Quality(5y)151.28%
High Growth Momentum
Growth
EPS 1Y (TTM)11.39%
EPS 3Y5.66%
EPS 5Y3.69%
EPS Q2Q%15.22%
EPS Next Y19.79%
EPS Next 2Y12.28%
EPS Next 3Y9.48%
EPS Next 5Y13.35%
Revenue 1Y (TTM)1.39%
Revenue growth 3Y5.69%
Revenue growth 5Y5.97%
Sales Q2Q%10.73%
Revenue Next Year7.57%
Revenue Next 2Y5.16%
Revenue Next 3Y4.59%
Revenue Next 5Y3.25%
EBIT growth 1Y-6.28%
EBIT growth 3Y8.13%
EBIT growth 5Y4.3%
EBIT Next Year36.91%
EBIT Next 3Y13.86%
EBIT Next 5Y11.35%
FCF growth 1Y330.64%
FCF growth 3Y-10.22%
FCF growth 5Y3.81%
OCF growth 1Y115.79%
OCF growth 3Y-8.65%
OCF growth 5Y-1.64%