Analyst Samad Samana of Jefferies maintained a Buy rating on Constellation Software, retaining the price target of C$5,850.00.
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Samad Samana has given his Buy rating due to a combination of factors that highlight Constellation Software’s strong performance and strategic positioning. The company demonstrated a significant rebound in revenue growth, achieving a 15.2% year-over-year increase, which marked an improvement from the previous quarter’s growth rate. Additionally, the 5% organic growth was the highest observed in the last six quarters, indicating a positive trend in the company’s core operations.
Despite earnings per share being below consensus expectations due to higher taxes and other non-cash expenses, these factors did not affect the company’s cash flow. Furthermore, Constellation Software’s return to its usual merger and acquisition activity, with $380 million spent in the second quarter compared to a lighter $94 million in the first quarter, underscores its commitment to growth through strategic acquisitions. These elements collectively support the Buy rating, reflecting confidence in the company’s long-term potential and resilience.