CONSTELLATION SOFTWARE (CSU-DB.CA) Stock Fundamental Analysis
TSX:CSU-DB - Toronto Stock Exchange - CA21037XAA87 - Currency: CAD
CSU-DB gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 66 industry peers in the Software industry. While CSU-DB has a great profitability rating, there are quite some concerns on its financial health. An interesting combination arises when we look at growth and value: CSU-DB is growing strongly while it also seems undervalued.
1. Profitability
1.1 Basic Checks
CSU-DB had positive earnings in the past year.
CSU-DB had a positive operating cash flow in the past year.
In the past 5 years CSU-DB has always been profitable.
Each year in the past 5 years CSU-DB had a positive operating cash flow.
1.2 Ratios
CSU-DB has a better Return On Assets (5.06%) than 74.24% of its industry peers.
Looking at the Return On Equity, with a value of 23.93%, CSU-DB belongs to the top of the industry, outperforming 87.88% of the companies in the same industry.
CSU-DB has a better Return On Invested Capital (8.69%) than 80.30% of its industry peers.
The Average Return On Invested Capital over the past 3 years for CSU-DB is in line with the industry average of 11.84%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.06% | ||
| ROE | 23.93% | ||
| ROIC | 8.69% |
ROA(3y)5.69%
ROA(5y)7.31%
ROE(3y)29.75%
ROE(5y)35.86%
ROIC(3y)11.42%
ROIC(5y)12.52%
1.3 Margins
CSU-DB has a better Profit Margin (6.57%) than 72.73% of its industry peers.
CSU-DB's Profit Margin has declined in the last couple of years.
CSU-DB has a Operating Margin of 14.30%. This is amongst the best in the industry. CSU-DB outperforms 84.85% of its industry peers.
In the last couple of years the Operating Margin of CSU-DB has declined.
CSU-DB's Gross Margin of 98.35% is amongst the best of the industry. CSU-DB outperforms 98.48% of its industry peers.
In the last couple of years the Gross Margin of CSU-DB has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.3% | ||
| PM (TTM) | 6.57% | ||
| GM | 98.35% |
OM growth 3Y-6.34%
OM growth 5Y-2%
PM growth 3Y-15.11%
PM growth 5Y-11.52%
GM growth 3Y0.19%
GM growth 5Y0.26%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), CSU-DB is creating some value.
Compared to 1 year ago, CSU-DB has about the same amount of shares outstanding.
CSU-DB has about the same amout of shares outstanding than it did 5 years ago.
The debt/assets ratio for CSU-DB is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.51, we must say that CSU-DB is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 1.51, CSU-DB perfoms like the industry average, outperforming 54.55% of the companies in the same industry.
CSU-DB has a debt to FCF ratio of 2.29. This is a good value and a sign of high solvency as CSU-DB would need 2.29 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.29, CSU-DB is in the better half of the industry, outperforming 74.24% of the companies in the same industry.
A Debt/Equity ratio of 1.39 is on the high side and indicates that CSU-DB has dependencies on debt financing.
CSU-DB has a worse Debt to Equity ratio (1.39) than 65.15% of its industry peers.
Even though the debt/equity ratio score it not favorable for CSU-DB, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.39 | ||
| Debt/FCF | 2.29 | ||
| Altman-Z | 1.51 |
ROIC/WACC1.24
WACC7%
2.3 Liquidity
CSU-DB has a Current Ratio of 0.93. This is a bad value and indicates that CSU-DB is not financially healthy enough and could expect problems in meeting its short term obligations.
CSU-DB has a Current ratio (0.93) which is comparable to the rest of the industry.
A Quick Ratio of 0.92 indicates that CSU-DB may have some problems paying its short term obligations.
The Quick ratio of CSU-DB (0.92) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.93 | ||
| Quick Ratio | 0.92 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 16.26% over the past year.
CSU-DB shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 17.65% yearly.
The Revenue has grown by 22.11% in the past year. This is a very strong growth!
Measured over the past years, CSU-DB shows a very strong growth in Revenue. The Revenue has been growing by 22.40% on average per year.
EPS 1Y (TTM)16.26%
EPS 3Y22.5%
EPS 5Y17.65%
EPS Q2Q%31.3%
Revenue 1Y (TTM)22.11%
Revenue growth 3Y28.43%
Revenue growth 5Y22.4%
Sales Q2Q%19.52%
3.2 Future
The Earnings Per Share is expected to grow by 21.69% on average over the next years. This is a very strong growth
Based on estimates for the next years, CSU-DB will show a quite strong growth in Revenue. The Revenue will grow by 19.14% on average per year.
EPS Next Y19.91%
EPS Next 2Y23.63%
EPS Next 3Y21.69%
EPS Next 5YN/A
Revenue Next Year20.62%
Revenue Next 2Y20.1%
Revenue Next 3Y19.22%
Revenue Next 5Y19.14%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 1.16, the valuation of CSU-DB can be described as very cheap.
Compared to the rest of the industry, the Price/Earnings ratio of CSU-DB indicates a rather cheap valuation: CSU-DB is cheaper than 100.00% of the companies listed in the same industry.
CSU-DB is valuated cheaply when we compare the Price/Earnings ratio to 29.39, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 0.86, the valuation of CSU-DB can be described as very cheap.
Based on the Price/Forward Earnings ratio, CSU-DB is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
CSU-DB's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 94.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 1.16 | ||
| Fwd PE | 0.86 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CSU-DB indicates a rather cheap valuation: CSU-DB is cheaper than 98.48% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, CSU-DB is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 0.9 | ||
| EV/EBITDA | 1.63 |
4.3 Compensation for Growth
CSU-DB's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
CSU-DB has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as CSU-DB's earnings are expected to grow with 21.69% in the coming years.
PEG (NY)0.06
PEG (5Y)0.07
EPS Next 2Y23.63%
EPS Next 3Y21.69%
5. Dividend
5.1 Amount
With a yearly dividend of 0.12%, CSU-DB is not a good candidate for dividend investing.
CSU-DB's Dividend Yield is rather good when compared to the industry average which is at 1.75. CSU-DB pays more dividend than 86.36% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.30, CSU-DB's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.12% |
5.2 History
The dividend of CSU-DB has a limited annual growth rate of 0.05%.
CSU-DB has been paying a dividend for over 5 years, so it has already some track record.
The dividend of CSU-DB decreased recently.
Dividend Growth(5Y)0.05%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
13.36% of the earnings are spent on dividend by CSU-DB. This is a low number and sustainable payout ratio.
The dividend of CSU-DB is growing, but earnings are growing more, so the dividend growth is sustainable.
DP13.36%
EPS Next 2Y23.63%
EPS Next 3Y21.69%
CONSTELLATION SOFTWARE
TSX:CSU-DB (2/10/2025, 7:00:00 PM)
120
+0.51 (+0.43%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners42.03%
Inst Owner ChangeN/A
Ins Owners4.51%
Ins Owner ChangeN/A
Market Cap2.54B
Analysts77.33
Price Target130.07 (8.39%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.12% |
Yearly Dividend4.01
Dividend Growth(5Y)0.05%
DP13.36%
Div Incr Years1
Div Non Decr Years1
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)2.22%
Min EPS beat(2)-8.67%
Max EPS beat(2)13.12%
EPS beat(4)1
Avg EPS beat(4)-6.41%
Min EPS beat(4)-18.14%
Max EPS beat(4)13.12%
EPS beat(8)4
Avg EPS beat(8)2.67%
EPS beat(12)7
Avg EPS beat(12)4.99%
EPS beat(16)9
Avg EPS beat(16)2.78%
Revenue beat(2)0
Avg Revenue beat(2)-1.85%
Min Revenue beat(2)-2.31%
Max Revenue beat(2)-1.4%
Revenue beat(4)1
Avg Revenue beat(4)-0.73%
Min Revenue beat(4)-2.31%
Max Revenue beat(4)1.53%
Revenue beat(8)3
Avg Revenue beat(8)-0.48%
Revenue beat(12)3
Avg Revenue beat(12)-0.53%
Revenue beat(16)5
Avg Revenue beat(16)-0.19%
PT rev (1m)-3.5%
PT rev (3m)4.99%
EPS NQ rev (1m)1.9%
EPS NQ rev (3m)-1.81%
EPS NY rev (1m)0.4%
EPS NY rev (3m)-3.16%
Revenue NQ rev (1m)0.15%
Revenue NQ rev (3m)-1.22%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.7%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 1.16 | ||
| Fwd PE | 0.86 | ||
| P/S | 0.18 | ||
| P/FCF | 0.9 | ||
| P/OCF | 0.87 | ||
| P/B | 0.67 | ||
| P/tB | N/A | ||
| EV/EBITDA | 1.63 |
EPS(TTM)103.63
EY86.36%
EPS(NY)139.03
Fwd EY115.86%
FCF(TTM)133.45
FCFY111.21%
OCF(TTM)137.17
OCFY114.3%
SpS654.79
BVpS179.69
TBVpS-302.92
PEG (NY)0.06
PEG (5Y)0.07
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.06% | ||
| ROE | 23.93% | ||
| ROCE | 17.57% | ||
| ROIC | 8.69% | ||
| ROICexc | 11.81% | ||
| ROICexgc | N/A | ||
| OM | 14.3% | ||
| PM (TTM) | 6.57% | ||
| GM | 98.35% | ||
| FCFM | 20.38% |
ROA(3y)5.69%
ROA(5y)7.31%
ROE(3y)29.75%
ROE(5y)35.86%
ROIC(3y)11.42%
ROIC(5y)12.52%
ROICexc(3y)14.97%
ROICexc(5y)16.66%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)23.1%
ROCE(5y)25.52%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y-12.73%
ROICexc growth 5Y-9.52%
OM growth 3Y-6.34%
OM growth 5Y-2%
PM growth 3Y-15.11%
PM growth 5Y-11.52%
GM growth 3Y0.19%
GM growth 5Y0.26%
F-Score5
Asset Turnover0.77
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.39 | ||
| Debt/FCF | 2.29 | ||
| Debt/EBITDA | 1.44 | ||
| Cap/Depr | 4.63% | ||
| Cap/Sales | 0.57% | ||
| Interest Coverage | 7.25 | ||
| Cash Conversion | 78.89% | ||
| Profit Quality | 310.38% | ||
| Current Ratio | 0.93 | ||
| Quick Ratio | 0.92 | ||
| Altman-Z | 1.51 |
F-Score5
WACC7%
ROIC/WACC1.24
Cap/Depr(3y)4.55%
Cap/Depr(5y)5.32%
Cap/Sales(3y)0.56%
Cap/Sales(5y)0.66%
Profit Quality(3y)320.98%
Profit Quality(5y)289.81%
High Growth Momentum
Growth
EPS 1Y (TTM)16.26%
EPS 3Y22.5%
EPS 5Y17.65%
EPS Q2Q%31.3%
EPS Next Y19.91%
EPS Next 2Y23.63%
EPS Next 3Y21.69%
EPS Next 5YN/A
Revenue 1Y (TTM)22.11%
Revenue growth 3Y28.43%
Revenue growth 5Y22.4%
Sales Q2Q%19.52%
Revenue Next Year20.62%
Revenue Next 2Y20.1%
Revenue Next 3Y19.22%
Revenue Next 5Y19.14%
EBIT growth 1Y27.06%
EBIT growth 3Y20.29%
EBIT growth 5Y19.96%
EBIT Next Year102.19%
EBIT Next 3Y42.38%
EBIT Next 5YN/A
FCF growth 1Y64.36%
FCF growth 3Y14.37%
FCF growth 5Y22.23%
OCF growth 1Y63.76%
OCF growth 3Y14.47%
OCF growth 5Y21.86%