Analyst Michael Berg from Wells Fargo maintained a Hold rating on CSG Systems International (CSGS – Research Report) and keeping the price target at $58.00.
Michael Berg has given his Hold rating due to a combination of factors affecting CSG Systems International. The company reported first-quarter results that were generally in line with expectations, showing some strength in bottom-line performance. However, there are concerns about the concentration mix and challenges in the core business, which temper the positive aspects of their diversification efforts.
CSG Systems International’s financial guidance for fiscal year 2025 remains unchanged, with revenue and free cash flow projections aligning with previous estimates. While the company has demonstrated operational efficiencies and a commitment to shareholder returns through dividends and share repurchases, the growth in new verticals and geographic regions has been mixed. Additionally, the company’s valuation metrics, such as EV/EBITDA and EV/FCF, are below those of low-growth mature software peers, which supports the Hold rating.
CSGS’s price has also changed slightly for the past six months – from $55.930 to $61.200, which is a 9.42% increase.