CONSTELLATION SOFTWARE INC (CSU.CA) Stock Fundamental Analysis
TSX:CSU - Toronto Stock Exchange - CA21037X1006 - Common Stock - Currency: CAD
Overall CSU gets a fundamental rating of 6 out of 10. We evaluated CSU against 62 industry peers in the Software industry. CSU scores excellent on profitability, but there are some minor concerns on its financial health. CSU is not priced too expensively while it is growing strongly. Keep and eye on this one!
1. Profitability
1.1 Basic Checks
In the past year CSU was profitable.
CSU had a positive operating cash flow in the past year.
Each year in the past 5 years CSU has been profitable.
CSU had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a decent Return On Assets value of 5.33%, CSU is doing good in the industry, outperforming 75.81% of the companies in the same industry.
CSU has a better Return On Equity (24.33%) than 85.48% of its industry peers.
CSU has a Return On Invested Capital of 8.78%. This is in the better half of the industry: CSU outperforms 79.03% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for CSU is below the industry average of 12.92%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.33% | ||
| ROE | 24.33% | ||
| ROIC | 8.78% |
ROA(3y)5.8%
ROA(5y)6.55%
ROE(3y)28.73%
ROE(5y)31.4%
ROIC(3y)10.12%
ROIC(5y)11.52%
1.3 Margins
With a decent Profit Margin value of 7.15%, CSU is doing good in the industry, outperforming 74.19% of the companies in the same industry.
In the last couple of years the Profit Margin of CSU has declined.
CSU has a Operating Margin of 14.81%. This is amongst the best in the industry. CSU outperforms 80.65% of its industry peers.
In the last couple of years the Operating Margin of CSU has remained more or less at the same level.
CSU has a Gross Margin of 98.31%. This is amongst the best in the industry. CSU outperforms 98.39% of its industry peers.
In the last couple of years the Gross Margin of CSU has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.81% | ||
| PM (TTM) | 7.15% | ||
| GM | 98.31% |
OM growth 3Y-4.63%
OM growth 5Y-0.13%
PM growth 3Y6.15%
PM growth 5Y-5.31%
GM growth 3Y0.09%
GM growth 5Y0.25%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), CSU is creating some value.
CSU has about the same amout of shares outstanding than it did 1 year ago.
CSU has about the same amout of shares outstanding than it did 5 years ago.
Compared to 1 year ago, CSU has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 5.66 indicates that CSU is not in any danger for bankruptcy at the moment.
The Altman-Z score of CSU (5.66) is better than 79.03% of its industry peers.
CSU has a debt to FCF ratio of 2.13. This is a good value and a sign of high solvency as CSU would need 2.13 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.13, CSU is in the better half of the industry, outperforming 67.74% of the companies in the same industry.
A Debt/Equity ratio of 1.25 is on the high side and indicates that CSU has dependencies on debt financing.
With a Debt to Equity ratio value of 1.25, CSU is not doing good in the industry: 69.35% of the companies in the same industry are doing better.
Even though the debt/equity ratio score it not favorable for CSU, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.25 | ||
| Debt/FCF | 2.13 | ||
| Altman-Z | 5.66 |
ROIC/WACC1.15
WACC7.65%
2.3 Liquidity
A Current Ratio of 0.94 indicates that CSU may have some problems paying its short term obligations.
CSU has a Current ratio (0.94) which is in line with its industry peers.
CSU has a Quick Ratio of 0.94. This is a bad value and indicates that CSU is not financially healthy enough and could expect problems in meeting its short term obligations.
CSU has a Quick ratio (0.93) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.94 | ||
| Quick Ratio | 0.93 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 46.44% over the past year.
CSU shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 24.67% yearly.
CSU shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 17.26%.
Measured over the past years, CSU shows a very strong growth in Revenue. The Revenue has been growing by 23.60% on average per year.
EPS 1Y (TTM)46.44%
EPS 3Y24.73%
EPS 5Y24.67%
EPS Q2Q%3.19%
Revenue 1Y (TTM)17.26%
Revenue growth 3Y25.39%
Revenue growth 5Y23.6%
Sales Q2Q%12.74%
3.2 Future
CSU is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 15.17% yearly.
The Revenue is expected to grow by 19.45% on average over the next years. This is quite good.
EPS Next Y10.67%
EPS Next 2Y15.17%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year19.19%
Revenue Next 2Y18.36%
Revenue Next 3Y19.45%
Revenue Next 5Y19.45%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
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
A Price/Earnings ratio of 42.15 indicates a quite expensive valuation of CSU.
CSU's Price/Earnings ratio is a bit cheaper when compared to the industry. CSU is cheaper than 70.97% of the companies in the same industry.
CSU is valuated expensively when we compare the Price/Earnings ratio to 27.28, which is the current average of the S&P500 Index.
CSU is valuated quite expensively with a Price/Forward Earnings ratio of 31.97.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CSU indicates a somewhat cheap valuation: CSU is cheaper than 75.81% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.76, CSU is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.15 | ||
| Fwd PE | 31.97 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CSU is valued a bit cheaper than 61.29% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CSU indicates a somewhat cheap valuation: CSU is cheaper than 69.35% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 34.88 | ||
| EV/EBITDA | 28.45 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of CSU may justify a higher PE ratio.
A more expensive valuation may be justified as CSU's earnings are expected to grow with 15.17% in the coming years.
PEG (NY)3.95
PEG (5Y)1.71
EPS Next 2Y15.17%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a yearly dividend of 0.12%, CSU is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.73, CSU pays a better dividend. On top of this CSU pays more dividend than 90.32% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, CSU'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 decreases each year by -30.08%.
CSU has been paying a dividend for at least 10 years, so it has a reliable track record.
CSU has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)-30.08%
Div Incr Years0
Div Non Decr Years17
5.3 Sustainability
11.47% of the earnings are spent on dividend by CSU. This is a low number and sustainable payout ratio.
DP11.47%
EPS Next 2Y15.17%
EPS Next 3YN/A
TSX:CSU (7/2/2025, 7:00:00 PM)
4973.24
-19.96 (-0.4%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners40.24%
Inst Owner ChangeN/A
Ins Owners2.12%
Ins Owner ChangeN/A
Market Cap105.38B
Analysts78.67
Price Target5678.34 (14.18%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.12% |
Yearly Dividend5.48
Dividend Growth(5Y)-30.08%
DP11.47%
Div Incr Years0
Div Non Decr Years17
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.7%
Min EPS beat(2)-22.05%
Max EPS beat(2)25.45%
EPS beat(4)2
Avg EPS beat(4)1.96%
Min EPS beat(4)-22.05%
Max EPS beat(4)25.45%
EPS beat(8)3
Avg EPS beat(8)-4.19%
EPS beat(12)6
Avg EPS beat(12)3.53%
EPS beat(16)8
Avg EPS beat(16)-0.7%
Revenue beat(2)0
Avg Revenue beat(2)-3.38%
Min Revenue beat(2)-4.77%
Max Revenue beat(2)-1.99%
Revenue beat(4)0
Avg Revenue beat(4)-2.62%
Min Revenue beat(4)-4.77%
Max Revenue beat(4)-1.4%
Revenue beat(8)1
Avg Revenue beat(8)-1.64%
Revenue beat(12)3
Avg Revenue beat(12)-1.01%
Revenue beat(16)3
Avg Revenue beat(16)-1.04%
PT rev (1m)7.22%
PT rev (3m)4.6%
EPS NQ rev (1m)0%
EPS NQ rev (3m)4.36%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.02%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.33%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.38%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.15 | ||
| Fwd PE | 31.97 | ||
| P/S | 7.45 | ||
| P/FCF | 34.88 | ||
| P/OCF | 33.78 | ||
| P/B | 25.35 | ||
| P/tB | N/A | ||
| EV/EBITDA | 28.45 |
EPS(TTM)117.98
EY2.37%
EPS(NY)155.58
Fwd EY3.13%
FCF(TTM)142.58
FCFY2.87%
OCF(TTM)147.22
OCFY2.96%
SpS667.62
BVpS196.16
TBVpS-285.35
PEG (NY)3.95
PEG (5Y)1.71
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.33% | ||
| ROE | 24.33% | ||
| ROCE | 17.76% | ||
| ROIC | 8.78% | ||
| ROICexc | 12.33% | ||
| ROICexgc | N/A | ||
| OM | 14.81% | ||
| PM (TTM) | 7.15% | ||
| GM | 98.31% | ||
| FCFM | 21.36% |
ROA(3y)5.8%
ROA(5y)6.55%
ROE(3y)28.73%
ROE(5y)31.4%
ROIC(3y)10.12%
ROIC(5y)11.52%
ROICexc(3y)13.25%
ROICexc(5y)15.63%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)20.46%
ROCE(5y)23.3%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y-11.6%
ROICexc growth 5Y-7.15%
OM growth 3Y-4.63%
OM growth 5Y-0.13%
PM growth 3Y6.15%
PM growth 5Y-5.31%
GM growth 3Y0.09%
GM growth 5Y0.25%
F-Score8
Asset Turnover0.75
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.25 | ||
| Debt/FCF | 2.13 | ||
| Debt/EBITDA | 1.37 | ||
| Cap/Depr | 5.72% | ||
| Cap/Sales | 0.69% | ||
| Interest Coverage | 7.17 | ||
| Cash Conversion | 81.85% | ||
| Profit Quality | 298.79% | ||
| Current Ratio | 0.94 | ||
| Quick Ratio | 0.93 | ||
| Altman-Z | 5.66 |
F-Score8
WACC7.65%
ROIC/WACC1.15
Cap/Depr(3y)4.86%
Cap/Depr(5y)4.81%
Cap/Sales(3y)0.59%
Cap/Sales(5y)0.6%
Profit Quality(3y)281.44%
Profit Quality(5y)304.12%
High Growth Momentum
Growth
EPS 1Y (TTM)46.44%
EPS 3Y24.73%
EPS 5Y24.67%
EPS Q2Q%3.19%
EPS Next Y10.67%
EPS Next 2Y15.17%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)17.26%
Revenue growth 3Y25.39%
Revenue growth 5Y23.6%
Sales Q2Q%12.74%
Revenue Next Year19.19%
Revenue Next 2Y18.36%
Revenue Next 3Y19.45%
Revenue Next 5Y19.45%
EBIT growth 1Y20.49%
EBIT growth 3Y19.59%
EBIT growth 5Y23.43%
EBIT Next Year140.74%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y59.17%
FCF growth 3Y18.78%
FCF growth 5Y23.82%
OCF growth 1Y59.41%
OCF growth 3Y19.11%
OCF growth 5Y23.46%