CSG SYSTEMS INTL INC (CSGS) Stock Fundamental Analysis
NASDAQ:CSGS - Nasdaq - US1263491094 - Common Stock - Currency: USD
We assign a fundamental rating of 6 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 has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
CSGS had positive earnings in the past year.
CSGS had a positive operating cash flow in the past year.
CSGS had positive earnings in each of the past 5 years.
CSGS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a decent Return On Assets value of 5.89%, CSGS is doing good in the industry, outperforming 69.51% of the companies in the same industry.
With an excellent Return On Equity value of 29.50%, CSGS belongs to the best of the industry, outperforming 92.68% of the companies in the same industry.
The Return On Invested Capital of CSGS (12.25%) is better than 79.27% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for CSGS is significantly below the industry average of 21.64%.
The 3 year average ROIC (11.79%) for CSGS is below the current ROIC(12.25%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.89% | ||
| ROE | 29.5% | ||
| ROIC | 12.25% |
ROA(3y)4.55%
ROA(5y)4.65%
ROE(3y)22.46%
ROE(5y)19.57%
ROIC(3y)11.79%
ROIC(5y)11.7%
1.3 Margins
Looking at the Profit Margin, with a value of 6.95%, CSGS is in the better half of the industry, outperforming 68.29% of the companies in the same industry.
CSGS's Profit Margin has declined in the last couple of years.
The Operating Margin of CSGS (12.28%) is better than 71.95% of its industry peers.
CSGS's Operating Margin has declined in the last couple of years.
CSGS has a better Gross Margin (49.14%) than 68.29% of its industry peers.
In the last couple of years the Gross Margin of CSGS has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.28% | ||
| PM (TTM) | 6.95% | ||
| GM | 49.14% |
OM growth 3Y-0.69%
OM growth 5Y-1.65%
PM growth 3Y1.64%
PM growth 5Y-2.67%
GM growth 3Y0.4%
GM growth 5Y0.57%
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.
Compared to 1 year ago, CSGS has less shares outstanding
The number of shares outstanding for CSGS has been reduced compared to 5 years ago.
Compared to 1 year ago, CSGS has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.43 indicates that CSGS is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.43, CSGS is in line with its industry, outperforming 54.88% of the companies in the same industry.
CSGS has a debt to FCF ratio of 3.48. This is a good value and a sign of high solvency as CSGS would need 3.48 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 3.48, CSGS is in the better half of the industry, outperforming 60.98% of the companies in the same industry.
A Debt/Equity ratio of 1.90 is on the high side and indicates that CSGS has dependencies on debt financing.
The Debt to Equity ratio of CSGS (1.90) is worse than 80.49% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.9 | ||
| Debt/FCF | 3.48 | ||
| Altman-Z | 3.43 |
ROIC/WACC1.34
WACC9.17%
2.3 Liquidity
CSGS has a Current Ratio of 1.55. This is a normal value and indicates that CSGS is financially healthy and should not expect problems in meeting its short term obligations.
CSGS has a Current ratio of 1.55. This is comparable to the rest of the industry: CSGS outperforms 45.12% of its industry peers.
CSGS has a Quick Ratio of 1.55. This is a normal value and indicates that CSGS is financially healthy and should not expect problems in meeting its short term obligations.
CSGS has a Quick ratio (1.55) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.55 | ||
| Quick Ratio | 1.55 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 33.42% over the past year.
CSGS shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 6.07% yearly.
Looking at the last year, CSGS shows a small growth in Revenue. The Revenue has grown by 3.08% in the last year.
CSGS shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.73% yearly.
EPS 1Y (TTM)33.42%
EPS 3Y12.27%
EPS 5Y6.07%
EPS Q2Q%12.87%
Revenue 1Y (TTM)3.08%
Revenue growth 3Y4.59%
Revenue growth 5Y3.73%
Sales Q2Q%10.88%
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 10.94% on average per year.
Based on estimates for the next years, CSGS will show a small growth in Revenue. The Revenue will grow by 2.71% on average per year.
EPS Next Y2.24%
EPS Next 2Y4.62%
EPS Next 3Y5.36%
EPS Next 5Y10.94%
Revenue Next Year3.56%
Revenue Next 2Y3.74%
Revenue Next 3Y4.11%
Revenue Next 5Y2.71%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
A Price/Earnings ratio of 13.18 indicates a correct valuation of CSGS.
Based on the Price/Earnings ratio, CSGS is valued cheaply inside the industry as 85.37% of the companies are valued more expensively.
CSGS's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.30.
Based on the Price/Forward Earnings ratio of 12.37, the valuation of CSGS can be described as correct.
Based on the Price/Forward Earnings ratio, CSGS is valued cheaper than 82.93% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.76, CSGS is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.18 | ||
| Fwd PE | 12.37 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CSGS is valued cheaply inside the industry as 80.49% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, CSGS is valued cheaply inside the industry as 90.24% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.04 | ||
| EV/EBITDA | 10.26 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates CSGS does not grow enough to justify the current Price/Earnings ratio.
CSGS has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)5.89
PEG (5Y)2.17
EPS Next 2Y4.62%
EPS Next 3Y5.36%
5. Dividend
5.1 Amount
CSGS has a Yearly Dividend Yield of 1.94%. Purely for dividend investing, there may be better candidates out there.
CSGS's Dividend Yield is rather good when compared to the industry average which is at 2.48. CSGS pays more dividend than 89.02% of the companies in the same industry.
CSGS's Dividend Yield is comparable with the S&P500 average which is at 2.37.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.94% |
5.2 History
The dividend of CSGS has a limited annual growth rate of 0.69%.
CSGS has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of CSGS decreased in the last 3 years.
Dividend Growth(5Y)0.69%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
CSGS pays out 31.86% of its income as dividend. This is a sustainable payout ratio.
CSGS's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP31.86%
EPS Next 2Y4.62%
EPS Next 3Y5.36%
64.18
-1.42 (-2.16%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners101.72%
Inst Owner Change-0.02%
Ins Owners4.26%
Ins Owner Change8.72%
Market Cap1.86B
Analysts86.25
Price Target76.05 (18.49%)
Short Float %8.26%
Short Ratio8.49
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.94% |
Yearly Dividend0.91
Dividend Growth(5Y)0.69%
DP31.86%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)21.88%
Min EPS beat(2)9.77%
Max EPS beat(2)34%
EPS beat(4)3
Avg EPS beat(4)12.88%
Min EPS beat(4)-2.01%
Max EPS beat(4)34%
EPS beat(8)7
Avg EPS beat(8)10.35%
EPS beat(12)9
Avg EPS beat(12)7.8%
EPS beat(16)13
Avg EPS beat(16)6.45%
Revenue beat(2)1
Avg Revenue beat(2)-0.15%
Min Revenue beat(2)-0.74%
Max Revenue beat(2)0.43%
Revenue beat(4)2
Avg Revenue beat(4)0.12%
Min Revenue beat(4)-3.19%
Max Revenue beat(4)3.97%
Revenue beat(8)2
Avg Revenue beat(8)-2.19%
Revenue beat(12)6
Avg Revenue beat(12)-0.64%
Revenue beat(16)10
Avg Revenue beat(16)1.57%
PT rev (1m)1.44%
PT rev (3m)0.24%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-3.36%
EPS NY rev (1m)0.82%
EPS NY rev (3m)1.14%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.43%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.32%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.18 | ||
| Fwd PE | 12.37 | ||
| P/S | 1.55 | ||
| P/FCF | 12.04 | ||
| P/OCF | 10.54 | ||
| P/B | 6.57 | ||
| P/tB | N/A | ||
| EV/EBITDA | 10.26 |
EPS(TTM)4.87
EY7.59%
EPS(NY)5.19
Fwd EY8.08%
FCF(TTM)5.33
FCFY8.31%
OCF(TTM)6.09
OCFY9.49%
SpS41.46
BVpS9.77
TBVpS-5.48
PEG (NY)5.89
PEG (5Y)2.17
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.89% | ||
| ROE | 29.5% | ||
| ROCE | 16.43% | ||
| ROIC | 12.25% | ||
| ROICexc | 14.44% | ||
| ROICexgc | 34.34% | ||
| OM | 12.28% | ||
| PM (TTM) | 6.95% | ||
| GM | 49.14% | ||
| FCFM | 12.86% |
ROA(3y)4.55%
ROA(5y)4.65%
ROE(3y)22.46%
ROE(5y)19.57%
ROIC(3y)11.79%
ROIC(5y)11.7%
ROICexc(3y)14.61%
ROICexc(5y)15.49%
ROICexgc(3y)37.56%
ROICexgc(5y)578.79%
ROCE(3y)15.82%
ROCE(5y)15.7%
ROICexcg growth 3Y-76.11%
ROICexcg growth 5Y1.77%
ROICexc growth 3Y-10.8%
ROICexc growth 5Y0.81%
OM growth 3Y-0.69%
OM growth 5Y-1.65%
PM growth 3Y1.64%
PM growth 5Y-2.67%
GM growth 3Y0.4%
GM growth 5Y0.57%
F-Score7
Asset Turnover0.85
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.9 | ||
| Debt/FCF | 3.48 | ||
| Debt/EBITDA | 2.44 | ||
| Cap/Depr | 30.31% | ||
| Cap/Sales | 1.83% | ||
| Interest Coverage | 5.59 | ||
| Cash Conversion | 80.12% | ||
| Profit Quality | 184.98% | ||
| Current Ratio | 1.55 | ||
| Quick Ratio | 1.55 | ||
| Altman-Z | 3.43 |
F-Score7
WACC9.17%
ROIC/WACC1.34
Cap/Depr(3y)39.41%
Cap/Depr(5y)39.76%
Cap/Sales(3y)2.55%
Cap/Sales(5y)2.63%
Profit Quality(3y)115.88%
Profit Quality(5y)149.88%
High Growth Momentum
Growth
EPS 1Y (TTM)33.42%
EPS 3Y12.27%
EPS 5Y6.07%
EPS Q2Q%12.87%
EPS Next Y2.24%
EPS Next 2Y4.62%
EPS Next 3Y5.36%
EPS Next 5Y10.94%
Revenue 1Y (TTM)3.08%
Revenue growth 3Y4.59%
Revenue growth 5Y3.73%
Sales Q2Q%10.88%
Revenue Next Year3.56%
Revenue Next 2Y3.74%
Revenue Next 3Y4.11%
Revenue Next 5Y2.71%
EBIT growth 1Y12.98%
EBIT growth 3Y3.87%
EBIT growth 5Y2.02%
EBIT Next Year33.31%
EBIT Next 3Y13.95%
EBIT Next 5Y12.22%
FCF growth 1Y214%
FCF growth 3Y-0.09%
FCF growth 5Y-0.09%
OCF growth 1Y108.92%
OCF growth 3Y-1.08%
OCF growth 5Y-2.12%