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! These ratings could make CSU a good candidate for growth investing.
1. Profitability
1.1 Basic Checks
In the past year CSU was profitable.
In the past year CSU had a positive cash flow from operations.
In the past 5 years CSU has always been profitable.
Each year in the past 5 years CSU had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 5.33%, CSU is in the better half of the industry, outperforming 75.81% of the companies in the same industry.
CSU's Return On Equity of 24.33% is amongst the best of the industry. CSU outperforms 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
The Profit Margin of CSU (7.15%) is better than 74.19% of its industry peers.
In the last couple of years the Profit Margin of CSU has declined.
The Operating Margin of CSU (14.81%) is better than 80.65% of its industry peers.
CSU's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 98.31%, CSU belongs to the top of the industry, outperforming 98.39% of the companies in the same industry.
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
CSU has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for CSU remains at a similar level compared to 1 year ago.
CSU has about the same amout of shares outstanding than it did 5 years ago.
CSU has a worse debt/assets ratio than last year.
2.2 Solvency
CSU has an Altman-Z score of 5.66. This indicates that CSU is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 5.66, CSU belongs to the best of the industry, outperforming 80.65% of the companies in the same industry.
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.
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.
CSU has a Debt/Equity ratio of 1.25. This is a high value indicating a heavy dependency on external financing.
CSU has a worse Debt to Equity ratio (1.25) than 69.35% of its industry peers.
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 | 1.25 | ||
| Debt/FCF | 2.13 | ||
| Altman-Z | 5.66 |
ROIC/WACC1.15
WACC7.65%
2.3 Liquidity
CSU has a Current 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 Current ratio (0.94) which is comparable to the rest of the industry.
A Quick Ratio of 0.93 indicates that CSU may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.93, CSU is in line with its industry, outperforming 40.32% of the companies in the same industry.
| 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.
Measured over the past years, CSU shows a very strong growth in Earnings Per Share. The EPS has been growing by 24.67% on average per year.
Looking at the last year, CSU shows a quite strong growth in Revenue. The Revenue has grown by 17.26% in the last year.
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
The Earnings Per Share is expected to grow by 15.17% 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 19.45% yearly.
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.
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
A Price/Earnings ratio of 42.30 indicates a quite expensive valuation of CSU.
70.97% of the companies in the same industry are more expensive than CSU, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 27.15, CSU is valued quite expensively.
CSU is valuated quite expensively with a Price/Forward Earnings ratio of 32.08.
Based on the Price/Forward Earnings ratio, CSU is valued a bit cheaper than the industry average as 75.81% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.60, CSU is valued a bit more expensive.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.3 | ||
| Fwd PE | 32.08 |
4.2 Price Multiples
61.29% of the companies in the same industry are more expensive than CSU, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, CSU is valued a bit cheaper than the industry average as 67.74% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 35.01 | ||
| EV/EBITDA | 28.49 |
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.
CSU's earnings are expected to grow with 15.17% in the coming years. This may justify a more expensive valuation.
PEG (NY)3.96
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.
CSU's Dividend Yield is rather good when compared to the industry average which is at 1.73. CSU pays more dividend than 90.32% of the companies in the same industry.
With a Dividend Yield of 0.12, CSU pays less dividend than the S&P500 average, which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.12% |
5.2 History
The dividend of CSU decreases each year by -30.08%.
CSU has paid a dividend for at least 10 years, which is 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 11.47% of its income as dividend. This is a sustainable payout ratio.
DP11.47%
EPS Next 2Y15.17%
EPS Next 3YN/A
TSX:CSU (6/30/2025, 7:00:00 PM)
4993.2
+66.41 (+1.35%)
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 Cap105.81B
Analysts78.67
Price Target5678.34 (13.72%)
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 | 42.3 | ||
| Fwd PE | 32.08 | ||
| P/S | 7.48 | ||
| P/FCF | 35.01 | ||
| P/OCF | 33.91 | ||
| P/B | 25.45 | ||
| P/tB | N/A | ||
| EV/EBITDA | 28.49 |
EPS(TTM)118.03
EY2.36%
EPS(NY)155.63
Fwd EY3.12%
FCF(TTM)142.63
FCFY2.86%
OCF(TTM)147.27
OCFY2.95%
SpS667.86
BVpS196.23
TBVpS-285.45
PEG (NY)3.96
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%