Converge Technology Solutions Corp (CTS.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:CTS - CA21250C1068 - Common Stock
5.99 CAD
0 (0%)
We assign a fundamental rating of 5 out of 10 to CTS. CTS was compared to 11 industry peers in the IT Services industry. CTS has only an average score on both its financial health and profitability. CTS is valued quite cheap, while showing a decent growth score. This is a good combination!
1. Profitability
1.1 Basic Checks
In the past year CTS was profitable.
CTS had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: CTS reported negative net income in multiple years.
CTS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of -8.13%, CTS is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
With a Return On Equity value of -49.54%, CTS perfoms like the industry average, outperforming 58.33% of the companies in the same industry.
CTS has a better Return On Invested Capital (5.10%) than 83.33% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for CTS is below the industry average of 6.83%.
The last Return On Invested Capital (5.10%) for CTS is above the 3 year average (4.32%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -8.13% | ||
| ROE | -49.54% | ||
| ROIC | 5.1% |
ROA(3y)-2.33%
ROA(5y)-1.28%
ROE(3y)-15.08%
ROE(5y)-9.35%
ROIC(3y)4.32%
ROIC(5y)6.82%
1.3 Margins
With a decent Operating Margin value of 2.35%, CTS is doing good in the industry, outperforming 75.00% of the companies in the same industry.
In the last couple of years the Operating Margin of CTS has grown nicely.
CTS has a Gross Margin of 26.68%. This is comparable to the rest of the industry: CTS outperforms 41.67% of its industry peers.
In the last couple of years the Gross Margin of CTS has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 2.35% | ||
| PM (TTM) | N/A | ||
| GM | 26.68% |
OM growth 3Y-11.63%
OM growth 5Y6.89%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y5.64%
GM growth 5Y2.57%
2. Health
2.1 Basic Checks
CTS has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
CTS has less shares outstanding than it did 1 year ago.
CTS has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, CTS has an improved debt to assets ratio.
2.2 Solvency
CTS has an Altman-Z score of 1.45. This is a bad value and indicates that CTS is not financially healthy and even has some risk of bankruptcy.
CTS has a Altman-Z score of 1.45. This is in the better half of the industry: CTS outperforms 75.00% of its industry peers.
The Debt to FCF ratio of CTS is 1.13, which is an excellent value as it means it would take CTS, only 1.13 years of fcf income to pay off all of its debts.
CTS has a Debt to FCF ratio of 1.13. This is amongst the best in the industry. CTS outperforms 91.67% of its industry peers.
A Debt/Equity ratio of 0.80 indicates that CTS is somewhat dependend on debt financing.
CTS has a Debt to Equity ratio of 0.80. This is comparable to the rest of the industry: CTS outperforms 50.00% of its industry peers.
Even though the debt/equity ratio score it not favorable for CTS, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.8 | ||
| Debt/FCF | 1.13 | ||
| Altman-Z | 1.45 |
ROIC/WACC0.65
WACC7.81%
2.3 Liquidity
CTS has a Current Ratio of 0.93. This is a bad value and indicates that CTS is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of CTS (0.93) is worse than 66.67% of its industry peers.
CTS has a Quick Ratio of 0.93. This is a bad value and indicates that CTS is not financially healthy enough and could expect problems in meeting its short term obligations.
CTS has a Quick ratio of 0.89. This is in the lower half of the industry: CTS underperforms 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.93 | ||
| Quick Ratio | 0.89 |
3. Growth
3.1 Past
CTS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 22.64%, which is quite impressive.
Measured over the past years, CTS shows a very strong growth in Earnings Per Share. The EPS has been growing by 86.63% on average per year.
Looking at the last year, CTS shows a decrease in Revenue. The Revenue has decreased by -4.18% in the last year.
The Revenue has been growing by 30.39% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)22.64%
EPS 3Y86.63%
EPS 5YN/A
EPS Q2Q%21.05%
Revenue 1Y (TTM)-4.18%
Revenue growth 3Y19.27%
Revenue growth 5Y30.39%
Sales Q2Q%4.56%
3.2 Future
CTS is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.54% yearly.
Based on estimates for the next years, CTS will show a small growth in Revenue. The Revenue will grow by 2.44% on average per year.
EPS Next Y-3.97%
EPS Next 2Y3.29%
EPS Next 3Y8.54%
EPS Next 5YN/A
Revenue Next Year2.01%
Revenue Next 2Y3.48%
Revenue Next 3Y2.44%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
CTS is valuated reasonably with a Price/Earnings ratio of 9.22.
Based on the Price/Earnings ratio, CTS is valued cheaper than 91.67% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.61, CTS is valued rather cheaply.
CTS is valuated reasonably with a Price/Forward Earnings ratio of 9.60.
Based on the Price/Forward Earnings ratio, CTS is valued cheaply inside the industry as 91.67% of the companies are valued more expensively.
CTS is valuated cheaply when we compare the Price/Forward Earnings ratio to 24.01, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.22 | ||
| Fwd PE | 9.6 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CTS is valued cheaply inside the industry as 91.67% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CTS indicates a rather cheap valuation: CTS is cheaper than 83.33% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.23 | ||
| EV/EBITDA | 7.98 |
4.3 Compensation for Growth
CTS has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y3.29%
EPS Next 3Y8.54%
5. Dividend
5.1 Amount
CTS has a Yearly Dividend Yield of 1.00%. Purely for dividend investing, there may be better candidates out there.
CTS's Dividend Yield is rather good when compared to the industry average which is at 0.04. CTS pays more dividend than 100.00% of the companies in the same industry.
With a Dividend Yield of 1.00, CTS pays less dividend than the S&P500 average, which is at 1.87.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1% |
5.2 History
CTS does not have a reliable dividend history as it only pays dividend since a couple or years.
Dividend Growth(5Y)N/A
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
The earnings of CTS are negative and hence is the payout ratio. CTS will probably not be able to sustain this dividend level.
DP-6.06%
EPS Next 2Y3.29%
EPS Next 3Y8.54%
Converge Technology Solutions Corp
TSX:CTS (4/23/2025, 7:00:00 PM)
5.99
0 (0%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners32.73%
Inst Owner ChangeN/A
Ins Owners5.89%
Ins Owner ChangeN/A
Market Cap1.13B
Revenue(TTM)2.59B
Net Income(TTM)-177.71M
Analysts73.33
Price Target5.92 (-1.17%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1% |
Yearly Dividend0.05
Dividend Growth(5Y)N/A
DP-6.06%
Div Incr Years1
Div Non Decr Years1
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)48.7%
Min EPS beat(2)24.14%
Max EPS beat(2)73.27%
EPS beat(4)3
Avg EPS beat(4)29.84%
Min EPS beat(4)-14.02%
Max EPS beat(4)73.27%
EPS beat(8)6
Avg EPS beat(8)23.18%
EPS beat(12)10
Avg EPS beat(12)27.25%
EPS beat(16)10
Avg EPS beat(16)8.62%
Revenue beat(2)1
Avg Revenue beat(2)1.69%
Min Revenue beat(2)-1.98%
Max Revenue beat(2)5.36%
Revenue beat(4)2
Avg Revenue beat(4)-0.94%
Min Revenue beat(4)-7.62%
Max Revenue beat(4)5.36%
Revenue beat(8)5
Avg Revenue beat(8)1.15%
Revenue beat(12)7
Avg Revenue beat(12)-2.47%
Revenue beat(16)9
Avg Revenue beat(16)-1.7%
PT rev (1m)5.45%
PT rev (3m)17.6%
EPS NQ rev (1m)-10.96%
EPS NQ rev (3m)-11.37%
EPS NY rev (1m)-0.32%
EPS NY rev (3m)2.79%
Revenue NQ rev (1m)-0.08%
Revenue NQ rev (3m)0.42%
Revenue NY rev (1m)0.92%
Revenue NY rev (3m)1.11%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.22 | ||
| Fwd PE | 9.6 | ||
| P/S | 0.44 | ||
| P/FCF | 4.23 | ||
| P/OCF | 4.21 | ||
| P/B | 3.15 | ||
| P/tB | N/A | ||
| EV/EBITDA | 7.98 |
EPS(TTM)0.65
EY10.85%
EPS(NY)0.62
Fwd EY10.42%
FCF(TTM)1.41
FCFY23.62%
OCF(TTM)1.42
OCFY23.75%
SpS13.74
BVpS1.9
TBVpS-1.65
PEG (NY)N/A
PEG (5Y)N/A
Graham NumberN/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -8.13% | ||
| ROE | -49.54% | ||
| ROCE | 7.08% | ||
| ROIC | 5.1% | ||
| ROICexc | 6.11% | ||
| ROICexgc | 90.81% | ||
| OM | 2.35% | ||
| PM (TTM) | N/A | ||
| GM | 26.68% | ||
| FCFM | 10.3% |
ROA(3y)-2.33%
ROA(5y)-1.28%
ROE(3y)-15.08%
ROE(5y)-9.35%
ROIC(3y)4.32%
ROIC(5y)6.82%
ROICexc(3y)5.23%
ROICexc(5y)10.33%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)6%
ROCE(5y)9.47%
ROICexgc growth 3YN/A
ROICexgc growth 5YN/A
ROICexc growth 3Y-4.82%
ROICexc growth 5Y-27.87%
OM growth 3Y-11.63%
OM growth 5Y6.89%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y5.64%
GM growth 5Y2.57%
F-Score5
Asset Turnover1.19
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.8 | ||
| Debt/FCF | 1.13 | ||
| Debt/EBITDA | 1.77 | ||
| Cap/Depr | 1.44% | ||
| Cap/Sales | 0.06% | ||
| Interest Coverage | 2.57 | ||
| Cash Conversion | 166.18% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.93 | ||
| Quick Ratio | 0.89 | ||
| Altman-Z | 1.45 |
F-Score5
WACC7.81%
ROIC/WACC0.65
Cap/Depr(3y)13.45%
Cap/Depr(5y)14.95%
Cap/Sales(3y)0.52%
Cap/Sales(5y)0.5%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)22.64%
EPS 3Y86.63%
EPS 5YN/A
EPS Q2Q%21.05%
EPS Next Y-3.97%
EPS Next 2Y3.29%
EPS Next 3Y8.54%
EPS Next 5YN/A
Revenue 1Y (TTM)-4.18%
Revenue growth 3Y19.27%
Revenue growth 5Y30.39%
Sales Q2Q%4.56%
Revenue Next Year2.01%
Revenue Next 2Y3.48%
Revenue Next 3Y2.44%
Revenue Next 5YN/A
EBIT growth 1Y30.87%
EBIT growth 3Y5.4%
EBIT growth 5Y39.37%
EBIT Next Year259.93%
EBIT Next 3Y59.08%
EBIT Next 5YN/A
FCF growth 1Y22.02%
FCF growth 3Y48.95%
FCF growth 5Y60.56%
OCF growth 1Y16.89%
OCF growth 3Y45.52%
OCF growth 5Y58.51%
Converge Technology Solutions Corp / CTS.CA FAQ
What is the ChartMill fundamental rating of Converge Technology Solutions Corp (CTS.CA) stock?
ChartMill assigns a fundamental rating of 5 / 10 to CTS.CA.
What is the valuation status of Converge Technology Solutions Corp (CTS.CA) stock?
ChartMill assigns a valuation rating of 7 / 10 to Converge Technology Solutions Corp (CTS.CA). This can be considered as Undervalued.
Can you provide the profitability details for Converge Technology Solutions Corp?
Converge Technology Solutions Corp (CTS.CA) has a profitability rating of 6 / 10.
What is the expected EPS growth for Converge Technology Solutions Corp (CTS.CA) stock?
The Earnings per Share (EPS) of Converge Technology Solutions Corp (CTS.CA) is expected to decline by -3.97% in the next year.
How sustainable is the dividend of Converge Technology Solutions Corp (CTS.CA) stock?
The dividend rating of Converge Technology Solutions Corp (CTS.CA) is 2 / 10 and the dividend payout ratio is -6.06%.