CONSTELLATION SOFTWARE INC (CSU.CA) Stock Fundamental Analysis
Canada - TSX:CSU - CA21037X1006 - Common Stock
3970.35 CAD
+15.34 (+0.39%)
Taking everything into account, CSU scores 6 out of 10 in our fundamental rating. CSU was compared to 62 industry peers in the Software industry. While CSU belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. CSU is growing strongly while it is still valued neutral. This is a good combination!
1. Profitability
1.1 Basic Checks
In the past year CSU was profitable.
CSU had a positive operating cash flow in the past year.
In the past 5 years CSU has always been profitable.
CSU had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
CSU has a Return On Assets of 4.21%. This is in the better half of the industry: CSU outperforms 74.19% of its industry peers.
With an excellent Return On Equity value of 18.81%, CSU belongs to the best of the industry, outperforming 85.48% of the companies in the same industry.
CSU's Return On Invested Capital of 8.79% is fine compared to the rest of the industry. CSU outperforms 77.42% of its industry peers.
CSU had an Average Return On Invested Capital over the past 3 years of 10.12%. This is below the industry average of 12.35%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.21% | ||
| ROE | 18.81% | ||
| ROIC | 8.79% |
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
CSU's Profit Margin of 5.77% is fine compared to the rest of the industry. CSU outperforms 77.42% of its industry peers.
CSU's Profit Margin has declined in the last couple of years.
CSU has a better Operating Margin (15.73%) than 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.
The Gross Margin of CSU (98.31%) is better than 98.39% of its industry peers.
CSU's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.73% | ||
| PM (TTM) | 5.77% | ||
| GM | 98.32% |
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so CSU is destroying value.
Compared to 1 year ago, CSU has about the same amount of shares outstanding.
The number of shares outstanding for CSU remains at a similar level compared to 5 years ago.
CSU has a worse debt/assets ratio than last year.
2.2 Solvency
CSU has an Altman-Z score of 4.53. This indicates that CSU is financially healthy and has little risk of bankruptcy at the moment.
CSU has a Altman-Z score of 4.53. This is in the better half of the industry: CSU outperforms 67.74% of its industry peers.
CSU has a debt to FCF ratio of 2.17. This is a good value and a sign of high solvency as CSU would need 2.17 years to pay back of all of its debts.
CSU has a better Debt to FCF ratio (2.17) than 72.58% of its industry peers.
A Debt/Equity ratio of 1.28 is on the high side and indicates that CSU has dependencies on debt financing.
CSU's Debt to Equity ratio of 1.28 is on the low side compared to the rest of the industry. CSU is outperformed by 67.74% of its industry peers.
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 | 1.28 | ||
| Debt/FCF | 2.17 | ||
| Altman-Z | 4.53 |
ROIC/WACC0.84
WACC10.42%
2.3 Liquidity
A Current Ratio of 0.97 indicates that CSU may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.97, CSU is doing worse than 61.29% of the companies in the same industry.
A Quick Ratio of 0.96 indicates that CSU may have some problems paying its short term obligations.
CSU's Quick ratio of 0.96 is on the low side compared to the rest of the industry. CSU is outperformed by 61.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.97 | ||
| Quick Ratio | 0.96 |
3. Growth
3.1 Past
CSU shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 38.40%, which is quite impressive.
CSU shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 24.67% yearly.
Looking at the last year, CSU shows a quite strong growth in Revenue. The Revenue has grown by 15.87% in the last year.
CSU shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 23.60% yearly.
EPS 1Y (TTM)38.4%
EPS 3Y24.73%
EPS 5Y24.67%
EPS Q2Q%33.43%
Revenue 1Y (TTM)15.87%
Revenue growth 3Y25.39%
Revenue growth 5Y23.6%
Sales Q2Q%15.24%
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 14.03% yearly.
The Revenue is expected to grow by 19.65% on average over the next years. This is quite good.
EPS Next Y9.02%
EPS Next 2Y16.02%
EPS Next 3Y14.03%
EPS Next 5YN/A
Revenue Next Year16.13%
Revenue Next 2Y16.89%
Revenue Next 3Y17.36%
Revenue Next 5Y19.65%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in 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
The Price/Earnings ratio is 30.58, which means the current valuation is very expensive for CSU.
Based on the Price/Earnings ratio, CSU is valued cheaper than 82.26% of the companies in the same industry.
CSU's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.53.
CSU is valuated rather expensively with a Price/Forward Earnings ratio of 24.43.
Based on the Price/Forward Earnings ratio, CSU is valued a bit cheaper than 74.19% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.04. CSU is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.58 | ||
| Fwd PE | 24.43 |
4.2 Price Multiples
69.35% of the companies in the same industry are more expensive than CSU, based on the Enterprise Value to EBITDA ratio.
CSU's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. CSU is cheaper than 74.19% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.17 | ||
| EV/EBITDA | 20.96 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates CSU does not grow enough to justify the current Price/Earnings ratio.
CSU has a very decent profitability rating, which may justify a higher PE ratio.
CSU's earnings are expected to grow with 14.03% in the coming years. This may justify a more expensive valuation.
PEG (NY)3.39
PEG (5Y)1.24
EPS Next 2Y16.02%
EPS Next 3Y14.03%
5. Dividend
5.1 Amount
With a yearly dividend of 0.15%, CSU is not a good candidate for dividend investing.
The stock price of CSU dropped by -20.35% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
Compared to an average industry Dividend Yield of 1.48, 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 2.40, CSU's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.15% |
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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-30.08%
Div Incr Years0
Div Non Decr Years17
5.3 Sustainability
CSU pays out 13.71% of its income as dividend. This is a sustainable payout ratio.
DP13.71%
EPS Next 2Y16.02%
EPS Next 3Y14.03%
TSX:CSU (10/15/2025, 7:00:00 PM)
3970.35
+15.34 (+0.39%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners41.11%
Inst Owner ChangeN/A
Ins Owners2.12%
Ins Owner ChangeN/A
Market Cap84.13B
Analysts78.67
Price Target5592.15 (40.85%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.15% |
Yearly Dividend5.62
Dividend Growth(5Y)-30.08%
DP13.71%
Div Incr Years0
Div Non Decr Years17
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-7.58%
Min EPS beat(2)-22.05%
Max EPS beat(2)6.89%
EPS beat(4)3
Avg EPS beat(4)5.85%
Min EPS beat(4)-22.05%
Max EPS beat(4)25.45%
EPS beat(8)4
Avg EPS beat(8)0.1%
EPS beat(12)7
Avg EPS beat(12)4.23%
EPS beat(16)9
Avg EPS beat(16)1.59%
Revenue beat(2)0
Avg Revenue beat(2)-3.27%
Min Revenue beat(2)-4.77%
Max Revenue beat(2)-1.76%
Revenue beat(4)0
Avg Revenue beat(4)-2.71%
Min Revenue beat(4)-4.77%
Max Revenue beat(4)-1.76%
Revenue beat(8)1
Avg Revenue beat(8)-1.68%
Revenue beat(12)3
Avg Revenue beat(12)-1.14%
Revenue beat(16)3
Avg Revenue beat(16)-1.05%
PT rev (1m)-1.79%
PT rev (3m)-1.52%
EPS NQ rev (1m)-0.48%
EPS NQ rev (3m)8.48%
EPS NY rev (1m)0%
EPS NY rev (3m)-1.49%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.09%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-2.57%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.58 | ||
| Fwd PE | 24.43 | ||
| P/S | 5.58 | ||
| P/FCF | 25.17 | ||
| P/OCF | 24.4 | ||
| P/B | 18.17 | ||
| P/tB | N/A | ||
| EV/EBITDA | 20.96 |
EPS(TTM)129.83
EY3.27%
EPS(NY)162.52
Fwd EY4.09%
FCF(TTM)157.75
FCFY3.97%
OCF(TTM)162.72
OCFY4.1%
SpS711.99
BVpS218.46
TBVpS-305.62
PEG (NY)3.39
PEG (5Y)1.24
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.21% | ||
| ROE | 18.81% | ||
| ROCE | 17.78% | ||
| ROIC | 8.79% | ||
| ROICexc | 12.06% | ||
| ROICexgc | N/A | ||
| OM | 15.73% | ||
| PM (TTM) | 5.77% | ||
| GM | 98.32% | ||
| FCFM | 22.16% |
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-Score6
Asset Turnover0.73
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.28 | ||
| Debt/FCF | 2.17 | ||
| Debt/EBITDA | 1.41 | ||
| Cap/Depr | 5.81% | ||
| Cap/Sales | 0.7% | ||
| Interest Coverage | 8.09 | ||
| Cash Conversion | 82.35% | ||
| Profit Quality | 383.87% | ||
| Current Ratio | 0.97 | ||
| Quick Ratio | 0.96 | ||
| Altman-Z | 4.53 |
F-Score6
WACC10.42%
ROIC/WACC0.84
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)38.4%
EPS 3Y24.73%
EPS 5Y24.67%
EPS Q2Q%33.43%
EPS Next Y9.02%
EPS Next 2Y16.02%
EPS Next 3Y14.03%
EPS Next 5YN/A
Revenue 1Y (TTM)15.87%
Revenue growth 3Y25.39%
Revenue growth 5Y23.6%
Sales Q2Q%15.24%
Revenue Next Year16.13%
Revenue Next 2Y16.89%
Revenue Next 3Y17.36%
Revenue Next 5Y19.65%
EBIT growth 1Y27.74%
EBIT growth 3Y19.59%
EBIT growth 5Y23.43%
EBIT Next Year141.56%
EBIT Next 3Y49.68%
EBIT Next 5Y38.21%
FCF growth 1Y65.62%
FCF growth 3Y18.78%
FCF growth 5Y23.82%
OCF growth 1Y66.1%
OCF growth 3Y19.11%
OCF growth 5Y23.46%