Constellation Software (TSE:CSU) has reported strong fourth-quarter 2024 financial results, including a 102% year-over-year increase in its net income.
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The Toronto-based company that is a serial acquirer of specialty software companies announced earnings per share (EPS) of $13.44, up 102% from $6.65 a year earlier. Constellation Software also announced Q4 2024 revenue of $2.70 billion, up 16% from $2.32 billion achieved in the final quarter of 2023.
The company ended the fourth quarter with free cash flow of $482 million, an increase of 48% from $325 million at the conclusion of 2023. Management attributed the strong results to several software acquisitions completed during the final months of last year.
Growing Deal Sizes
Constellation Software typically acquires niche vertical market software companies for about C$5 million (US$3.50 million) or less. However, in recent years, the company has pursued larger purchases, acquiring some companies for as much as C$28 million.
For all of 2024, Constellation Software reported EPS of $34.48, which was up 29% from $26.67 in 2023, and ahead of consensus analyst estimates that called for $33.03 in full-year earnings. Revenue for all of last year totaled $10.07 billion, up 20% from $8.41 billion at the end of 2023.
The stock of Constellation Software has risen 27% over the last 12 months.
Is CSU Stock a Buy?
The stock of Constellation Software has a consensus Strong Buy rating among three Wall Street analysts. That rating is based on three Buy recommendations assigned in the last three months. The average CSU price target of C$5,516.67 implies 14.34% upside from current levels.
