CSG Systems International (CSGS) AI Stock Analysis

• Market Cap: $1.70B
• Dividend Yield: 2.06%
• Average Volume (3M): 338.55K
• Price to Earnings (P/E): 19.4
• Beta (1Y): 0.64
• Revenue Growth: 2.39%
• EPS Growth: 39.20%
• Country: US
• Employees: 5,800
• Sector: Technology
• Sector Strength: 62
• Industry: Software - Infrastructure
• EPS (TTM): 3.04
• Shares Outstanding: 28,773,312
• 10 Day Avg. Volume: 287,723
• 30 Day Avg. Volume: 338,548
• PEG Ratio: 0.49
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.44
• Price to Cash Flow (P/CF): 5.20
• P/FCF Ratio: 5.20
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $70.00
• Price Target Upside: 18.44% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7

CSG Systems International scores an 80, reflecting strong financial performance, a stable technical outlook, reasonable valuation metrics, and a positive earnings call outlook. The new credit agreement further strengthens its financial flexibility. However, challenges in market conditions and modest organic growth in 2024 are factors to monitor.

Positive Factors

Client Engagement

CSG announced a six-year renewal with Comcast; the renewal did not include any discounts and includes annual price escalators starting in 2026.

Financial Performance

Adjusted revenue grew 6.3% year-over-year and was driven by extensions with Fortune 1000 companies and new wins with global clients.

Negative Factors

Market Uncertainty

An anonymous source did not rule out the potential for additional suitors to enter the conversation about a potential sale of CSG Systems.

Revenue Guidance

Management is now guiding to the low end of the revenue guidance range due to budget tightening at clients, headwinds in North American broadband markets, and timing on certain services-based.

CSG Systems International Business Overview & Revenue Model

Company Description

CSG Systems International, Inc. provides revenue management and digital monetization, customer engagement, and payment solutions primarily to the communications industry in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It offers Advanced Convergent Platform, a private SaaS based platform; related solutions, including field force automation, analytics, electronic bill presentment, ACH, etc. to the North American cable and satellite markets. The company also provides managed services; and professional services to implement, configure, and maintain its solutions, as well as licenses various solutions, such as mediation, partner management, rating, and charging. It serves retail, financial services, healthcare, insurance, and government entities. The company was incorporated in 1994 and is headquartered in Greenwood Village, Colorado.

How the Company Makes Money

CSG Systems International generates revenue primarily through the sale of its software solutions and related services. The company's revenue model includes licensing fees for its software products, subscription fees for cloud-based services, and professional services fees for implementation, customization, and consulting. A significant portion of CSG's earnings is derived from long-term contracts with major telecommunications and media companies, ensuring steady, recurring revenue streams. Additionally, strategic partnerships and acquisitions help to expand CSG's product offerings and market reach, further contributing to its financial performance.

CSG Systems International Financial Statement Overview

Summary

CSG Systems International demonstrates strong financial health with consistent revenue growth, improved profitability, and efficient cash flow management. The balance sheet shows reduced leverage, enhancing financial stability and shareholder value, although asset growth remains modest.

Income Statement

The income statement reflects strong financial performance with consistent revenue growth, increasing from $1,169.3M in 2023 to $1,197.2M in 2024, marking a revenue growth rate of 2.39%. The gross profit margin remains robust at 48.68%, and the net profit margin has improved to 7.26%, indicating effective cost management. However, the EBIT and EBITDA margins have slightly decreased, suggesting areas for potential operational efficiency improvements.

Balance Sheet

The balance sheet indicates a solid equity position with a debt-to-equity ratio of 0.15, significantly improved from previous levels, reflecting reduced leverage. The equity ratio stands at 18.83%, and ROE at 30.74%, which is a strong return for shareholders. However, the company's total assets have grown modestly, which may limit future expansion without additional financing.

Cash Flow

Cash flow analysis shows a positive trajectory with a free cash flow growth rate of 9.02%, reflecting enhanced cash generation capabilities. The operating cash flow to net income ratio of 1.56 indicates strong cash earnings, supporting operational stability. The free cash flow to net income ratio of 1.30 further confirms the company's ability to generate cash relative to its net income, although capital expenditures should be monitored to sustain this trend.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.20B	1.17B	1.09B	1.05B	990.53M
	Gross Profit
582.78M	554.22M	524.58M	503.28M	454.94M
	EBIT
131.33M	123.88M	130.98M	124.19M	105.56M
	EBITDA
215.25M	194.78M	149.04M	189.55M	170.71M
	Net Income Common Stockholders
86.85M	66.25M	44.06M	72.33M	58.71M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
161.79M	186.26M	150.44M	233.67M	240.30M
	Total Assets
1.50B	1.44B	1.35B	1.39B	1.33B
	Total Debt
43.59M	592.80M	487.19M	468.06M	469.79M
	Net Debt
-118.20M	406.54M	336.82M	262.42M	281.10M
	Total Liabilities
1.22B	1.17B	993.30M	946.90M	909.61M
	Stockholders Equity
282.57M	273.33M	355.25M	436.61M	422.39M
Cash Flow		Free Cash Flow
113.30M	103.92M	26.61M	113.66M	143.62M
	Operating Cash Flow
135.72M	131.90M	63.60M	140.22M	173.02M
	Investing Cash Flow
-5.13M	-27.91M	-9.04M	-66.71M	-66.26M
	Financing Cash Flow
-79.92M	-31.30M	-51.69M	-33.39M	-76.97M

CSG Systems International Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 59.10
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CSGS, the sentiment is Positive. The current price of 59.1 is below the 20-day moving average (MA) of 59.15, below the 50-day MA of 61.10, and above the 200-day MA of 52.53, indicating a neutral trend. The MACD of -0.40 indicates Negative momentum. The RSI at 48.05 is Neutral, neither overbought nor oversold. The STOCH value of 36.87 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CSGS.

CSG Systems International Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CSGS	80 Outperform	$1.70B	19.37	31.25%	2.06%	2.39%	39.20%
ACIW	79 Outperform	$5.51B	27.38	14.78%	―	9.76%	73.38%
ATEN	77 Outperform	$1.22B	24.52	22.81%	1.45%	3.97%	25.83%
SPSC	73 Outperform	$5.23B	64.46	10.13%	―	19.46%	16.20%
DOX	71 Outperform	$9.65B	19.82	14.13%	2.28%	-1.55%	-7.26%
WEX	64 Neutral	$4.45B	17.31	18.71%	―	3.15%	21.82%
Sector *	59 Neutral	$10.72B	10.22	-6.67%	3.02%	7.42%	-11.38%

CSG Systems International Corporate Events

CSG Systems International Secures New $600M Credit Agreement

On March 14, 2025, CSG Systems International entered into a new $600 million five-year credit agreement with Royal Bank of Canada and other financial institutions, replacing a previous agreement from 2021. The new arrangement extends the loan tenor to 2030, consolidates the loan into a revolving facility, and offers more flexible terms with fewer financial covenants, enhancing CSG’s operational flexibility and financial positioning.