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. CSGS has an average financial health and profitability rating. CSGS has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year CSGS was profitable.
In the past year CSGS had a positive cash flow from operations.
CSGS had positive earnings in each of the past 5 years.
In the past 5 years CSGS always reported a positive cash flow from operatings.
1.2 Ratios
CSGS's Return On Assets of 5.89% is fine compared to the rest of the industry. CSGS outperforms 69.51% of its industry peers.
Looking at the Return On Equity, with a value of 29.50%, CSGS belongs to the top of the industry, outperforming 92.68% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 12.25%, CSGS is in the better half of the industry, outperforming 79.27% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for CSGS is significantly below the industry average of 21.64%.
The last Return On Invested Capital (12.25%) for CSGS is above the 3 year average (11.79%), which is a sign of increasing profitability.
| 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.
In the last couple of years the Profit Margin of CSGS has declined.
CSGS has a better Operating Margin (12.28%) than 71.95% of its industry peers.
In the last couple of years the Operating Margin of CSGS has declined.
CSGS has a Gross Margin of 49.14%. This is in the better half of the industry: CSGS outperforms 68.29% of its industry peers.
CSGS's Gross Margin has been stable in the last couple of years.
| 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
CSGS has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, CSGS has less shares outstanding
CSGS has less shares outstanding than it did 5 years ago.
The debt/assets ratio for CSGS has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.43 indicates that CSGS is not in any danger for bankruptcy at the moment.
CSGS has a Altman-Z score (3.43) which is comparable to the rest of the industry.
The Debt to FCF ratio of CSGS is 3.48, which is a good value as it means it would take CSGS, 3.48 years of fcf income to pay off 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.
CSGS has a Debt/Equity ratio of 1.90. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 1.90, CSGS is doing worse than 80.49% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.9 | ||
| Debt/FCF | 3.48 | ||
| Altman-Z | 3.43 |
ROIC/WACC1.35
WACC9.05%
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 (1.55) which is in line with its industry peers.
A Quick Ratio of 1.55 indicates that CSGS should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.55, CSGS perfoms like the industry average, outperforming 45.12% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.55 | ||
| Quick Ratio | 1.55 |
3. Growth
3.1 Past
CSGS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 33.42%, which is quite impressive.
CSGS shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 6.07% yearly.
CSGS shows a small growth in Revenue. In the last year, the Revenue has grown by 3.08%.
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 Y1.41%
EPS Next 2Y2.76%
EPS Next 3Y5.24%
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
CSGS is valuated correctly with a Price/Earnings ratio of 13.16.
84.15% of the companies in the same industry are more expensive than CSGS, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 26.57, CSGS is valued rather cheaply.
The Price/Forward Earnings ratio is 12.81, which indicates a correct valuation of CSGS.
Based on the Price/Forward Earnings ratio, CSGS is valued cheaply inside the industry as 80.49% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.41, CSGS is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.16 | ||
| Fwd PE | 12.81 |
4.2 Price Multiples
CSGS's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. CSGS is cheaper than 80.49% of the companies in the same industry.
CSGS's Price/Free Cash Flow ratio is rather cheap when compared to the industry. CSGS is cheaper than 90.24% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.03 | ||
| EV/EBITDA | 10.25 |
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.
The decent profitability rating of CSGS may justify a higher PE ratio.
PEG (NY)9.35
PEG (5Y)2.17
EPS Next 2Y2.76%
EPS Next 3Y5.24%
5. Dividend
5.1 Amount
CSGS has a Yearly Dividend Yield of 1.97%.
CSGS's Dividend Yield is rather good when compared to the industry average which is at 2.52. CSGS pays more dividend than 90.24% of the companies in the same industry.
CSGS's Dividend Yield is comparable with the S&P500 average which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.97% |
5.2 History
The dividend of CSGS has a limited annual growth rate of 0.69%.
CSGS has paid a dividend for at least 10 years, which is 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.
The dividend of CSGS is growing, but earnings are growing more, so the dividend growth is sustainable.
DP31.86%
EPS Next 2Y2.76%
EPS Next 3Y5.24%
64.11
+1.04 (+1.65%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners101.72%
Inst Owner Change-2.48%
Ins Owners4.26%
Ins Owner Change7.04%
Market Cap1.86B
Analysts86.25
Price Target76.05 (18.62%)
Short Float %8.17%
Short Ratio7.79
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.97% |
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)-0.16%
EPS NQ rev (3m)-3.09%
EPS NY rev (1m)0%
EPS NY rev (3m)1.29%
Revenue NQ rev (1m)0.4%
Revenue NQ rev (3m)-1.28%
Revenue NY rev (1m)1.3%
Revenue NY rev (3m)0.32%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.16 | ||
| Fwd PE | 12.81 | ||
| P/S | 1.55 | ||
| P/FCF | 12.03 | ||
| P/OCF | 10.52 | ||
| P/B | 6.56 | ||
| P/tB | N/A | ||
| EV/EBITDA | 10.25 |
EPS(TTM)4.87
EY7.6%
EPS(NY)5.01
Fwd EY7.81%
FCF(TTM)5.33
FCFY8.32%
OCF(TTM)6.09
OCFY9.5%
SpS41.46
BVpS9.77
TBVpS-5.48
PEG (NY)9.35
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
WACC9.05%
ROIC/WACC1.35
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 Y1.41%
EPS Next 2Y2.76%
EPS Next 3Y5.24%
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%