Converge Technology Solutions Corp (CTS.CA) Fundamental Analysis & Valuation

TSX:CTS • CA21250C1068

Current stock price

5.99 CAD
0 (0%)
Last:

This CTS.CA fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

6

1. CTS.CA Profitability Analysis

1.1 Basic Checks

  • In the past year CTS was profitable.
  • CTS had a positive operating cash flow in the past year.
  • In multiple years CTS reported negative net income over the last 5 years.
  • In the past 5 years CTS always reported a positive cash flow from operatings.
CTS.CA Yearly Net Income VS EBIT VS OCF VS FCFCTS.CA Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2017 2018 2019 2020 2021 2022 2023 2024 0 100M -100M 200M

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.
  • Looking at the Return On Equity, with a value of -49.54%, CTS is in line with its industry, outperforming 58.33% of the companies in the same industry.
  • Looking at the Return On Invested Capital, with a value of 5.10%, CTS belongs to the top of the industry, outperforming 83.33% of the companies in the same industry.
  • CTS had an Average Return On Invested Capital over the past 3 years of 4.32%. This is significantly below the industry average of 9.47%.
  • 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 RankSector 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%
CTS.CA Yearly ROA, ROE, ROICCTS.CA Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2017 2018 2019 2020 2021 2022 2023 2024 0 100 200 300 400

1.3 Margins

  • CTS has a Operating Margin of 2.35%. This is in the better half of the industry: CTS outperforms 75.00% of its industry peers.
  • CTS's Operating Margin has improved in the last couple of years.
  • CTS has a Gross Margin (26.68%) which is comparable to the rest of the industry.
  • In the last couple of years the Gross Margin of CTS has grown nicely.
Industry RankSector 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%
CTS.CA Yearly Profit, Operating, Gross MarginsCTS.CA Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2017 2018 2019 2020 2021 2022 2023 2024 0 10 20

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4

2. CTS.CA Health Analysis

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.
  • The debt/assets ratio for CTS has been reduced compared to a year ago.
CTS.CA Yearly Shares OutstandingCTS.CA Yearly Shares OutstandingYearly Shares Outstanding 2017 2018 2019 2020 2021 2022 2023 2024 50M 100M 150M 200M
CTS.CA Yearly Total Debt VS Total AssetsCTS.CA Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2017 2018 2019 2020 2021 2022 2023 2024 500M 1B 1.5B 2B

2.2 Solvency

  • Based on the Altman-Z score of 1.45, we must say that CTS is in the distress zone and has some risk of bankruptcy.
  • CTS's Altman-Z score of 1.45 is fine compared to the rest of the industry. CTS outperforms 75.00% of its industry peers.
  • CTS has a debt to FCF ratio of 1.13. This is a very positive value and a sign of high solvency as it would only need 1.13 years to pay back of all of its debts.
  • With an excellent Debt to FCF ratio value of 1.13, CTS belongs to the best of the industry, outperforming 91.67% of the companies in the same industry.
  • CTS has a Debt/Equity ratio of 0.80. This is a neutral value indicating CTS is somewhat dependend on debt financing.
  • With a Debt to Equity ratio value of 0.80, CTS perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
  • Although CTS's pure debt/equity ratio does not look good, it has limited outstanding debt compared to the Free Cash Flow. 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 RankSector Rank
Debt/Equity 0.8
Debt/FCF 1.13
Altman-Z 1.45
ROIC/WACC0.65
WACC7.81%
CTS.CA Yearly LT Debt VS Equity VS FCFCTS.CA Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2017 2018 2019 2020 2021 2022 2023 2024 0 200M 400M 600M

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.
  • CTS's Current ratio of 0.93 is on the low side compared to the rest of the industry. CTS is outperformed by 66.67% of its industry peers.
  • A Quick Ratio of 0.89 indicates that CTS may have some problems paying 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 RankSector Rank
Current Ratio 0.93
Quick Ratio 0.89
CTS.CA Yearly Current Assets VS Current LiabilitesCTS.CA Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2017 2018 2019 2020 2021 2022 2023 2024 500M 1B

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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

6

3. CTS.CA Growth Analysis

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.
  • CTS shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 30.39% yearly.
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

  • Based on estimates for the next years, CTS will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.54% on average per year.
  • CTS is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.44% yearly.
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.
  • The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
CTS.CA Yearly Revenue VS EstimatesCTS.CA Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 500M 1B 1.5B 2B 2.5B
CTS.CA Yearly EPS VS EstimatesCTS.CA Yearly EPS VS EstimatesYearly EPS VS Estimates 2019 2020 2021 2022 2023 2024 2025 2026 2027 0 0.2 0.4 0.6 0.8

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7

4. CTS.CA Valuation Analysis

4.1 Price/Earnings Ratio

  • Based on the Price/Earnings ratio of 9.22, the valuation of CTS can be described as reasonable.
  • 91.67% of the companies in the same industry are more expensive than CTS, based on the Price/Earnings ratio.
  • Compared to an average S&P500 Price/Earnings ratio of 24.89, CTS is valued rather cheaply.
  • The Price/Forward Earnings ratio is 9.60, which indicates a very decent valuation of CTS.
  • Compared to the rest of the industry, the Price/Forward Earnings ratio of CTS indicates a rather cheap valuation: CTS is cheaper than 91.67% of the companies listed in the same industry.
  • The average S&P500 Price/Forward Earnings ratio is at 22.19. CTS is valued rather cheaply when compared to this.
Industry RankSector Rank
PE 9.22
Fwd PE 9.6
CTS.CA Price Earnings VS Forward Price EarningsCTS.CA Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

  • 91.67% of the companies in the same industry are more expensive than CTS, based on the Enterprise Value to EBITDA ratio.
  • CTS's Price/Free Cash Flow ratio is rather cheap when compared to the industry. CTS is cheaper than 83.33% of the companies in the same industry.
Industry RankSector Rank
P/FCF 4.23
EV/EBITDA 7.98
CTS.CA Per share dataCTS.CA EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 5 10

4.3 Compensation for Growth

  • The decent profitability rating of CTS may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y3.29%
EPS Next 3Y8.54%

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2

5. CTS.CA Dividend Analysis

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 0.05. 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 1.89.
Industry RankSector 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
CTS.CA Yearly Dividends per shareCTS.CA Yearly Dividends per shareYearly Dividends per share 2023 2024 0.02 0.04 0.06

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%
CTS.CA Yearly Income VS Free CF VS DividendCTS.CA Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2017 2018 2019 2020 2021 2022 2023 2024 0 100M -100M 200M

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CTS.CA Fundamentals: All Metrics, Ratios and Statistics

Converge Technology Solutions Corp

TSX:CTS (4/23/2025, 7:00:00 PM)

5.99

0 (0%)

Chartmill FA Rating
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)03-05
Earnings (Next)05-07
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 RankSector 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 RankSector 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 RankSector 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 RankSector 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 Fundamental Analysis 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.


Can you provide the valuation status for Converge Technology Solutions Corp?

ChartMill assigns a valuation rating of 7 / 10 to Converge Technology Solutions Corp (CTS.CA). This can be considered as Undervalued.


How profitable is Converge Technology Solutions Corp (CTS.CA) stock?

Converge Technology Solutions Corp (CTS.CA) has a profitability rating of 6 / 10.


Can you provide the financial health for CTS stock?

The financial health rating of Converge Technology Solutions Corp (CTS.CA) is 4 / 10.


Can you provide the dividend sustainability for CTS stock?

The dividend rating of Converge Technology Solutions Corp (CTS.CA) is 2 / 10 and the dividend payout ratio is -6.06%.