CONSTELLATION SOFTWARE INC (CSU.CA) Stock Fundamental Analysis
Canada - TSX:CSU - CA21037X1006 - Common Stock
3955.01 CAD
+18.82 (+0.48%)
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 has a great profitability rating, 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
CSU had positive earnings in the past year.
CSU had a positive operating cash flow in the past year.
Each year in the past 5 years CSU has been profitable.
In the past 5 years CSU always reported a positive cash flow from operatings.
1.2 Ratios
CSU has a better Return On Assets (4.21%) than 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.
With a decent Return On Invested Capital value of 8.79%, CSU is doing good in the industry, outperforming 77.42% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for CSU 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 has a better Profit Margin (5.77%) than 77.42% of its industry peers.
CSU's Profit Margin has declined in the last couple of years.
CSU has a Operating Margin of 15.73%. This is amongst the best in the industry. CSU outperforms 80.65% of its industry peers.
CSU's Operating Margin has been stable in the last couple of years.
The Gross Margin of CSU (98.31%) is better than 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 | 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
CSU has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it 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.
Compared to 1 year ago, CSU has a worse debt to assets ratio.
2.2 Solvency
CSU has an Altman-Z score of 4.52. This indicates that CSU is financially healthy and has little risk of bankruptcy at the moment.
CSU has a Altman-Z score of 4.52. This is in the better half of the industry: CSU outperforms 67.74% of its industry peers.
The Debt to FCF ratio of CSU is 2.17, which is a good value as it means it would take CSU, 2.17 years of fcf income to pay off all of its debts.
CSU has a Debt to FCF ratio of 2.17. This is in the better half of the industry: CSU outperforms 72.58% of its industry peers.
CSU has a Debt/Equity ratio of 1.28. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 1.28, CSU is doing worse than 67.74% of the companies in the same industry.
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 | 1.28 | ||
| Debt/FCF | 2.17 | ||
| Altman-Z | 4.52 |
ROIC/WACC0.84
WACC10.41%
2.3 Liquidity
A Current Ratio of 0.97 indicates that CSU may have some problems paying its short term obligations.
CSU has a Current ratio of 0.97. This is in the lower half of the industry: CSU underperforms 61.29% of its industry peers.
A Quick Ratio of 0.96 indicates that CSU may have some problems paying its short term obligations.
CSU has a worse Quick ratio (0.96) than 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.
The Earnings Per Share has been growing by 24.67% on average over the past years. This is a very strong growth
The Revenue has grown by 15.87% in the past year. This is quite good.
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
The Earnings Per Share is expected to grow by 14.03% on average over the next years. This is quite good.
CSU is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 19.65% yearly.
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
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.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 30.42, the valuation of CSU can be described as expensive.
Based on the Price/Earnings ratio, CSU is valued cheaper than 82.26% of the companies in the same industry.
CSU is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.49, which is the current average of the S&P500 Index.
CSU is valuated rather expensively with a Price/Forward Earnings ratio of 24.30.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CSU indicates a somewhat cheap valuation: CSU is cheaper than 74.19% of the companies listed in the same industry.
CSU is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.99, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.42 | ||
| Fwd PE | 24.3 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CSU is valued a bit cheaper than 69.35% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, CSU is valued a bit cheaper than the industry average as 74.19% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.04 | ||
| EV/EBITDA | 20.85 |
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.
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 14.03% in the coming years.
PEG (NY)3.37
PEG (5Y)1.23
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 -20.66% 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.
With a Dividend Yield of 0.15, CSU pays less dividend than the S&P500 average, which is at 2.43.
| 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 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
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 (10/14/2025, 7:00:00 PM)
3955.01
+18.82 (+0.48%)
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 Cap83.81B
Analysts78.67
Price Target5592.15 (41.39%)
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 | 30.42 | ||
| Fwd PE | 24.3 | ||
| P/S | 5.55 | ||
| P/FCF | 25.04 | ||
| P/OCF | 24.27 | ||
| P/B | 18.08 | ||
| P/tB | N/A | ||
| EV/EBITDA | 20.85 |
EPS(TTM)130.01
EY3.29%
EPS(NY)162.75
Fwd EY4.11%
FCF(TTM)157.97
FCFY3.99%
OCF(TTM)162.95
OCFY4.12%
SpS712.99
BVpS218.77
TBVpS-306.05
PEG (NY)3.37
PEG (5Y)1.23
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 | 4.52 |
F-Score6
WACC10.41%
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%