Consensus Cloud Solutions (CCSI) AI Stock Analysis

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Consensus Cloud Solutions

(NASDAQ:CCSI)

63Neutral

Consensus Cloud Solutions scores moderately due to strong cash flow and low valuation, indicating potential undervaluation. However, concerns arise from declining revenues and negative equity. Technical analysis highlights a bearish trend, while earnings call guidance points to future growth but with margin pressures.

Positive Factors

Business Outlook

The increase in the midpoint of 2024E revenue guidance from $345.5M to $348M reflects a positive outlook for future growth.

Product Adoption

Adoption of CCSI's advanced products like Clarity and Unite are in early stages but are seen as promising up-sell opportunities for the company.

Revenue Growth

CCSI's Corporate revenue of $52.9M was up an impressive +7.1% y/y, indicating a favorable inflection point in Corporate revenue growth.

Negative Factors

Profitability

CCSI provided 2025 EBITDA guidance below previous estimates, reflecting a potentially challenging outlook for profitability.

Revenue Decline

The slight -3.1% y/y decline in revenue is by design as CCSI reduces sales and marketing costs from SoHo.

Consensus Cloud Solutions (CCSI) vs. S&P 500 (SPY)

Market Cap

$406.13M

Dividend YieldN/A

Average Volume (3M)163.62K

Price to Earnings (P/E)4.5

Beta (1Y)1.29

Revenue Growth-3.36%

EPS Growth17.62%

CountryUS

Employees518

SectorTechnology

Sector Strength40

IndustrySoftware - Infrastructure

Share Statistics

EPS (TTM)4.62

Shares Outstanding19,525,597

10 Day Avg. Volume164,307

30 Day Avg. Volume163,621

Financial Highlights & Ratios

PEG Ratio0.26

Price to Book (P/B)N/A

Price to Sales (P/S)1.32

Price to Cash Flow (P/CF)10.40

P/FCF Ratio36.70

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$31.75

Price Target Upside52.64% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering4

Consensus Cloud Solutions Business Overview & Revenue Model

Company DescriptionConsensus Cloud Solutions (CCSI) is a leading provider in the digital cloud faxing and document exchange sector. The company specializes in secure, compliant, and reliable cloud-based solutions to facilitate the electronic exchange of information. CCSI's core products and services include cloud fax technology, interoperability solutions for healthcare and other industries, and data exchange platforms that enable seamless connectivity and document transmission.

How the Company Makes MoneyConsensus Cloud Solutions makes money through a subscription-based revenue model, where customers pay recurring fees for access to its cloud fax and document exchange services. These services primarily cater to healthcare, legal, and financial industries that require secure and compliant information exchange. Additionally, CCSI generates revenue by offering customized solutions and consulting services tailored to the specific needs of its clients. Key revenue streams include monthly or annual subscription fees, usage-based charges, and professional services fees. Significant partnerships with healthcare providers, legal firms, and other enterprise clients also contribute to its earnings by expanding its market reach and driving customer acquisition.

Consensus Cloud Solutions Financial Statement Overview

Summary

Consensus Cloud Solutions shows strong cash flow generation and improved profitability margins. However, declining revenue and negative shareholders' equity raise concerns about financial stability. The significant debt reduction is positive, but the balance sheet requires improvement.

Income Statement

Positive

Consensus Cloud Solutions has shown a decline in total revenue from $362.56 million to $350.38 million, a decrease of 3.36% year-over-year. The gross profit margin remained strong at 80.10%, indicating efficient cost management. However, the net profit margin was 25.52%, which is an improvement over the previous year's 21.30%, showing progress in profitability despite declining revenues.

Balance Sheet

Negative

The company has a negative stockholders' equity of $47.94 million, which indicates financial instability. The total liabilities exceed total assets, resulting in a negative equity ratio. Despite this, the company managed to drastically reduce its debt level to zero, showing a significant reduction from the previous year's total debt of $749.23 million.

Cash Flow

Positive

Operating cash flow increased to $121.75 million, indicating robust cash generation capabilities. The free cash flow also rose significantly by 13.71% to $88.31 million, suggesting improved financial flexibility. However, the high financing cash outflow of $138.62 million could be a concern for future financing needs.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
350.38M	362.56M	362.42M	617.89M	678.46M
	Gross Profit
280.69M	294.24M	300.47M	487.19M	524.21M
	EBIT
149.40M	147.23M	151.92M	162.29M	236.73M
	EBITDA
176.74M	165.95M	166.97M	188.94M	241.28M
	Net Income Common Stockholders
89.44M	77.24M	72.71M	109.00M	152.91M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
33.55M	88.72M	94.16M	67.19M	128.19M
	Total Assets
602.20M	647.25M	636.74M	559.59M	1.49B
	Total Debt
607.15M	749.23M	810.53M	808.57M	59.12M
	Net Debt
573.61M	660.51M	716.37M	741.38M	-69.07M
	Total Liabilities
681.66M	823.38M	891.52M	893.39M	368.88M
	Stockholders Equity
47.94M	-176.12M	-254.78M	-333.80M	1.12B
Cash Flow		Free Cash Flow
88.31M	77.65M	52.28M	215.64M	203.22M
	Operating Cash Flow
121.75M	114.11M	83.32M	250.22M	238.79M
	Investing Cash Flow
-33.44M	-40.46M	-43.27M	-42.54M	-60.92M
	Financing Cash Flow
-138.62M	-81.66M	-10.62M	-880.00K	-179.09M

Consensus Cloud Solutions Technical Analysis

Technical Analysis Sentiment

Negative

Last Price20.80

Price Trends

50DMA

25.08

Negative

100DMA

24.96

Negative

200DMA

23.08

Negative

Market Momentum

MACD

-0.69

Positive

RSI

37.84

Neutral

STOCH

17.46

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CCSI, the sentiment is Negative. The current price of 20.8 is below the 20-day moving average (MA) of 22.80, below the 50-day MA of 25.08, and below the 200-day MA of 23.08, indicating a bearish trend. The MACD of -0.69 indicates Positive momentum. The RSI at 37.84 is Neutral, neither overbought nor oversold. The STOCH value of 17.46 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CCSI.

Consensus Cloud Solutions Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DOCU	77 Outperform	$15.91B	15.37	68.18%	―	7.78%	1345.45%
ZM	77 Outperform	$21.92B	22.43	11.92%	―	3.05%	55.96%
ADBE	75 Outperform	$155.41B	24.01	47.28%	―	10.65%	44.84%
BOX	72 Outperform	$4.36B	22.56	189.40%	―	5.05%	103.11%
CCSI	63 Neutral	$406.13M	4.50	-94.58%	―	-3.36%	17.62%
RNG	60 Neutral	$2.21B	―	16.58%	―	8.99%	63.84%
Sector *	57 Neutral	$20.24B	9.51	-13.28%	2.72%	5.43%	-24.54%

* Technology Sector Average

Performance Comparison

CCSI

Consensus Cloud Solutions

19.51

6.15

46.03%

ADBE

Adobe

350.05

-134.23

-27.72%

RNG

RingCentral

23.09

-9.30

-28.71%

BOX

Box

30.02

2.73

10.00%

DOCU

DocuSign

73.22

13.74

23.10%

Zoom Video Communications

69.61

7.09

11.34%

Consensus Cloud Solutions Earnings Call Summary

Earnings Call Date: Feb 19, 2025 | % Change Since: -25.79% | Next Earnings Date: May 7, 2025

Earnings Call Sentiment Neutral

The earnings call reflects strong performance in corporate revenue growth, significant debt reduction, and robust free cash flow. However, challenges persist in the SoHo channel with declining revenues and ARPA. The company's outlook for 2025 anticipates growth, albeit with some impact on margins due to strategic investments.

Highlights

Record Corporate Revenue Growth

Corporate revenue increased by 7.1% in Q4 2024 and reached $209.1 million for the year, representing a 4.8% growth rate year-over-year.

Successful Debt Repurchase

Repurchased approximately $144 million of debt during the year, bringing total repurchases to $207 million since the program's inception.

Strong Free Cash Flow

Achieved a record $88 million in free cash flow for 2024.

Significant Customer Acquisition

Added more than 3,000 customers to the corporate account base in Q4, achieving a record high corporate customer count of approximately 59,000.

Improved Revenue Retention

Corporate revenue retention rate improved to 100.5% for fiscal year 2024, a notable improvement of 170 basis points from the previous year.

Lowlights

Decline in SoHo Revenue

SoHo channel revenue declined by 11.1% in Q4 2024 and by 13.3% for the fiscal year.

Lower ARPA in SoHo

Full year ARPA for SoHo decreased to $14.92 from $15.31 in fiscal year 2023.

Impact on EBITDA Margins

Investment in go-to-market operations expected to negatively impact EBITDA margin by approximately 1 percentage point in 2025.

Company Guidance

During the Consensus Q4 2024 Earnings Call, the company provided detailed guidance for 2025. The company expects full-year revenue to range between $343 million and $357 million, with a midpoint of $350 million. Adjusted EBITDA is projected to be between $179 million and $190 million, with a midpoint of $185 million. The adjusted EPS is anticipated to range from $5.03 to $5.42, with a midpoint of $5.22. The company plans to maintain a tax rate between 20.5% and 22.5%, and the estimated share count is around 20 million shares. For Q1 2025, Consensus expects revenue between $85 million and $89 million, adjusted EBITDA between $44.8 million and $47.8 million, and adjusted EPS between $1.26 and $1.36. The company's strategy includes increased marketing spend and personnel additions to its go-to-market operations, which is expected to negatively impact EBITDA margins by approximately 1 percentage point in 2025, but is aimed at driving future revenue growth.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.