CONSTELLATION SOFTWARE INC (CSU.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:CSU - CA21037X1006 - Common Stock
3325.82 CAD
+15.84 (+0.48%)
Taking everything into account, CSU scores 6 out of 10 in our fundamental rating. CSU was compared to 63 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 showing excellent growth while it is valued at reasonable prices. Keep and eye on this one! These ratings could make CSU a good candidate for growth investing.
1. Profitability
1.1 Basic Checks
CSU had positive earnings in the past year.
In the past year CSU had a positive cash flow from operations.
CSU had positive earnings in each of the past 5 years.
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 4.35%, CSU is doing good in the industry, outperforming 77.78% of the companies in the same industry.
Looking at the Return On Equity, with a value of 19.20%, CSU belongs to the top of the industry, outperforming 87.30% of the companies in the same industry.
CSU's Return On Invested Capital of 9.25% is amongst the best of the industry. CSU outperforms 80.95% of its industry peers.
CSU had an Average Return On Invested Capital over the past 3 years of 10.12%. This is in line with the industry average of 11.54%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.35% | ||
| ROE | 19.2% | ||
| ROIC | 9.25% |
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
The Profit Margin of CSU (5.97%) is better than 76.19% of its industry peers.
In the last couple of years the Profit Margin of CSU has declined.
Looking at the Operating Margin, with a value of 16.15%, CSU belongs to the top of the industry, outperforming 82.54% of the companies in the same industry.
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 98.30%. This is amongst the best in the industry. CSU outperforms 98.41% 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 | 16.15% | ||
| PM (TTM) | 5.97% | ||
| GM | 98.3% |
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.
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 3.96. This indicates that CSU is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of CSU (3.96) is better than 63.49% of its industry peers.
The Debt to FCF ratio of CSU is 2.13, which is a good value as it means it would take CSU, 2.13 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 2.13, CSU is doing good in the industry, outperforming 74.60% of the companies in the same industry.
CSU has a Debt/Equity ratio of 1.20. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 1.20, CSU is not doing good in the industry: 66.67% of the companies in the same industry are doing better.
Although CSU does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.2 | ||
| Debt/FCF | 2.13 | ||
| Altman-Z | 3.96 |
ROIC/WACC0.96
WACC9.66%
2.3 Liquidity
CSU has a Current Ratio of 1.02. This is a normal value and indicates that CSU is financially healthy and should not expect problems in meeting its short term obligations.
CSU's Current ratio of 1.02 is on the low side compared to the rest of the industry. CSU is outperformed by 63.49% of its industry peers.
A Quick Ratio of 1.00 indicates that CSU should not have too much problems paying its short term obligations.
CSU's Quick ratio of 1.00 is on the low side compared to the rest of the industry. CSU is outperformed by 63.49% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.02 | ||
| Quick Ratio | 1 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 35.60% 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.
Looking at the last year, CSU shows a quite strong growth in Revenue. The Revenue has grown by 15.10% in the last year.
The Revenue has been growing by 23.60% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)35.6%
EPS 3Y24.73%
EPS 5Y24.67%
EPS Q2Q%24.27%
Revenue 1Y (TTM)15.1%
Revenue growth 3Y25.39%
Revenue growth 5Y23.6%
Sales Q2Q%15.98%
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 15.69% on average over the next years. This is quite good.
EPS Next Y9.22%
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 5Y15.69%
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.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 24.27, the valuation of CSU can be described as rather expensive.
Based on the Price/Earnings ratio, CSU is valued cheaply inside the industry as 84.13% of the companies are valued more expensively.
CSU is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.46, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 20.57, the valuation of CSU can be described as rather expensive.
CSU's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. CSU is cheaper than 71.43% of the companies in the same industry.
CSU is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 36.10, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.27 | ||
| Fwd PE | 20.57 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CSU indicates a somewhat cheap valuation: CSU is cheaper than 68.25% of the companies listed in the same industry.
CSU's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. CSU is cheaper than 79.37% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.77 | ||
| EV/EBITDA | 16.85 |
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.
A more expensive valuation may be justified as CSU's earnings are expected to grow with 14.03% in the coming years.
PEG (NY)2.63
PEG (5Y)0.98
EPS Next 2Y16.02%
EPS Next 3Y14.03%
5. Dividend
5.1 Amount
CSU has a yearly dividend return of 0.17%, which is pretty low.
The stock price of CSU dropped by -27.69% 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 1.68, CSU pays a better dividend. On top of this CSU pays more dividend than 88.89% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.32, CSU's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.17% |
5.2 History
The dividend of CSU decreases each year by -30.09%.
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)-30.09%
Div Incr Years0
Div Non Decr Years17
5.3 Sustainability
CSU pays out 12.76% of its income as dividend. This is a sustainable payout ratio.
DP12.76%
EPS Next 2Y16.02%
EPS Next 3Y14.03%
TSX:CSU (12/5/2025, 7:00:00 PM)
3325.82
+15.84 (+0.48%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners40.3%
Inst Owner ChangeN/A
Ins Owners2.27%
Ins Owner ChangeN/A
Market Cap70.47B
Revenue(TTM)11.15B
Net Income(TTM)666.00M
Analysts78.75
Price Target5091.19 (53.08%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.17% |
Yearly Dividend5.59
Dividend Growth(5Y)-30.09%
DP12.76%
Div Incr Years0
Div Non Decr Years17
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)10.33%
Min EPS beat(2)6.89%
Max EPS beat(2)13.77%
EPS beat(4)3
Avg EPS beat(4)6.01%
Min EPS beat(4)-22.05%
Max EPS beat(4)25.45%
EPS beat(8)4
Avg EPS beat(8)-0.2%
EPS beat(12)7
Avg EPS beat(12)3.79%
EPS beat(16)10
Avg EPS beat(16)5.24%
Revenue beat(2)0
Avg Revenue beat(2)-1.7%
Min Revenue beat(2)-1.76%
Max Revenue beat(2)-1.64%
Revenue beat(4)0
Avg Revenue beat(4)-2.54%
Min Revenue beat(4)-4.77%
Max Revenue beat(4)-1.64%
Revenue beat(8)1
Avg Revenue beat(8)-1.64%
Revenue beat(12)3
Avg Revenue beat(12)-1.17%
Revenue beat(16)3
Avg Revenue beat(16)-1.03%
PT rev (1m)-8.43%
PT rev (3m)-9.98%
EPS NQ rev (1m)-0.29%
EPS NQ rev (3m)-0.29%
EPS NY rev (1m)0.19%
EPS NY rev (3m)0.19%
Revenue NQ rev (1m)-0.96%
Revenue NQ rev (3m)-0.96%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.27 | ||
| Fwd PE | 20.57 | ||
| P/S | 4.52 | ||
| P/FCF | 19.77 | ||
| P/OCF | 19.22 | ||
| P/B | 14.54 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.85 |
EPS(TTM)137.05
EY4.12%
EPS(NY)161.67
Fwd EY4.86%
FCF(TTM)168.26
FCFY5.06%
OCF(TTM)173.01
OCFY5.2%
SpS735.1
BVpS228.72
TBVpS-301.71
PEG (NY)2.63
PEG (5Y)0.98
Graham Number839.82
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.35% | ||
| ROE | 19.2% | ||
| ROCE | 18.7% | ||
| ROIC | 9.25% | ||
| ROICexc | 13.04% | ||
| ROICexgc | N/A | ||
| OM | 16.15% | ||
| PM (TTM) | 5.97% | ||
| GM | 98.3% | ||
| FCFM | 22.89% |
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%
ROICexgc growth 3YN/A
ROICexgc 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-Score5
Asset Turnover0.73
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.2 | ||
| Debt/FCF | 2.13 | ||
| Debt/EBITDA | 1.33 | ||
| Cap/Depr | 5.4% | ||
| Cap/Sales | 0.65% | ||
| Interest Coverage | 8.74 | ||
| Cash Conversion | 83.73% | ||
| Profit Quality | 383.18% | ||
| Current Ratio | 1.02 | ||
| Quick Ratio | 1 | ||
| Altman-Z | 3.96 |
F-Score5
WACC9.66%
ROIC/WACC0.96
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)35.6%
EPS 3Y24.73%
EPS 5Y24.67%
EPS Q2Q%24.27%
EPS Next Y9.22%
EPS Next 2Y16.02%
EPS Next 3Y14.03%
EPS Next 5YN/A
Revenue 1Y (TTM)15.1%
Revenue growth 3Y25.39%
Revenue growth 5Y23.6%
Sales Q2Q%15.98%
Revenue Next Year16.13%
Revenue Next 2Y16.89%
Revenue Next 3Y17.36%
Revenue Next 5Y15.69%
EBIT growth 1Y30.04%
EBIT growth 3Y19.59%
EBIT growth 5Y23.43%
EBIT Next Year141.56%
EBIT Next 3Y49.68%
EBIT Next 5Y38.21%
FCF growth 1Y57.05%
FCF growth 3Y18.78%
FCF growth 5Y23.82%
OCF growth 1Y57.31%
OCF growth 3Y19.11%
OCF growth 5Y23.46%
CONSTELLATION SOFTWARE INC / CSU.CA FAQ
What is the fundamental rating for CSU stock?
ChartMill assigns a fundamental rating of 6 / 10 to CSU.CA.
What is the valuation status for CSU stock?
ChartMill assigns a valuation rating of 5 / 10 to CONSTELLATION SOFTWARE INC (CSU.CA). This can be considered as Fairly Valued.
How profitable is CONSTELLATION SOFTWARE INC (CSU.CA) stock?
CONSTELLATION SOFTWARE INC (CSU.CA) has a profitability rating of 7 / 10.
What are the PE and PB ratios of CONSTELLATION SOFTWARE INC (CSU.CA) stock?
The Price/Earnings (PE) ratio for CONSTELLATION SOFTWARE INC (CSU.CA) is 24.27 and the Price/Book (PB) ratio is 14.54.
What is the expected EPS growth for CONSTELLATION SOFTWARE INC (CSU.CA) stock?
The Earnings per Share (EPS) of CONSTELLATION SOFTWARE INC (CSU.CA) is expected to grow by 9.22% in the next year.