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CSG Systems International (CSGS) AI Stock Analysis

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CSGS

CSG Systems International

(NASDAQ:CSGS)

Rating:72Outperform
Price Target:
$71.00
▲(14.33%Upside)
CSG Systems International shows solid financial performance and strong earnings call results, reflecting robust operational and financial health. While technical indicators present mixed signals, the company's valuation remains moderate. The positive outcomes from the recent corporate events further support investor confidence.
Positive Factors
Market Positioning
The company is well positioned to continue growing market share as it moves into adjacent industry verticals and expands beyond the US CSPs to International CSPs.
Revenue Growth
Charter buying Cox likely a positive, as it could lead to Cox subscribers moving to CSGS's billing platform, potentially adding $12M to revenues.
Strategic Partnerships
CSG is gaining importance as a strategic partner for high profile technology companies, as manifested by its expanded collaboration with AWS to accelerate cloud transformation in telecommunications & financial services.
Negative Factors
Financial Performance
Valuation at 13.3x our 2025 adj EPS estimate looks attractive with growth poised to improve, yet reflects a below peer group 16x P/E multiple.
Revenue Guidance
Organic revenue growth guidance was lowered to the range +2-3% y/y, from +2-4% y/y previously.
Revenue Mix Shift
The ongoing firmwide revenue mix shift to cloud is expected to drive adjusted operating and free cash flow margins much higher, but presents a transition challenge.

CSG Systems International (CSGS) vs. SPDR S&P 500 ETF (SPY)

CSG Systems International Business Overview & Revenue Model

Company DescriptionCSG 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 MoneyCSG Systems International generates revenue through the sale of its software solutions and professional services. Its primary revenue streams include recurring revenue from long-term contracts for software-as-a-service (SaaS) solutions, which involve providing cloud-based billing and customer management platforms to telecommunications and media companies. Additionally, the company earns money from professional services, including consulting and implementation services, which help clients optimize and integrate CSG's solutions into their operations. Significant partnerships with major telecommunications providers and media companies enhance the company's ability to secure long-term contracts and maintain a stable revenue flow.

CSG Systems International Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q1-2025)
|
% Change Since: 1.99%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
The earnings call reflected strong operational discipline and financial performance, evidenced by improved margins, revenue diversification, and increased shareholder returns. However, challenges in the cable market and broader economic uncertainties were noted, balancing the positive achievements.
Q1-2025 Updates
Positive Updates
Improved Operating Margin
CSG delivered a 19.0% non-GAAP operating margin in Q1 2025, a 240 basis point improvement from 16.6% in Q1 2024.
Revenue Diversification
33% of CSG's Q1 revenue came from industry verticals outside of cable and telecom, up from 30% in Q1 2024, marking a new quarterly record.
Strong Free Cash Flow
CSG reported its best first quarter non-GAAP adjusted free cash flow performance since 2018, generating $7 million compared to a negative $34 million in Q1 2024.
Increased Shareholder Returns
CSG announced a 7% annual dividend increase for the 12th consecutive year and returned $32 million to shareholders in Q1 through dividends and share repurchases.
New Sales Wins
CSG secured new deals and extensions with major customers, including Mediacom, Liberty Latin America, PLDT, JPMorgan Chase, and North Texas Tolling Authority.
Negative Updates
Comcast and Charter Revenue Dynamics
Comcast's revenue was flat year-over-year but down sequentially, and Charter's revenue was down both year-over-year and quarter-over-quarter, reflecting challenges in the cable market.
Macroeconomic Uncertainty
Global macroeconomic uncertainty has led to some belt-tightening across industry verticals and extended decision-making cycles for major deals.
Company Guidance
During the first quarter of 2025, CSG Corporation reported impressive financial performance, with a non-GAAP operating margin of 19.0%, a 240 basis point increase compared to the previous year. The company achieved a record first-quarter revenue of $299 million, driven by strong sales of high-margin SaaS solutions and successful diversification into industry verticals outside of cable and telecom, which accounted for 33% of total revenue. CSG's top two customers, Charter and Comcast, represented 37% of Q1 revenue, down from 49% in 2017, due to growth in other business areas. Notably, CSG generated $7 million in non-GAAP adjusted free cash flow, a significant improvement over the previous year's $34 million outflow. The company also increased its annual dividend by 7% for the 12th consecutive year and returned $32 million to shareholders through dividends and share repurchases in Q1. Looking ahead, CSG reiterated its full-year 2025 revenue guidance with a midpoint of $1.23 billion, reflecting approximately 2.7% growth, and aims to achieve a non-GAAP adjusted operating margin range of 18% to 20% in the coming years.

CSG Systems International Financial Statement Overview

Summary
CSG Systems International exhibits solid financial health with stable revenue growth, strong profitability margins, and effective cash flow management. Despite the moderate level of leverage, the company's ability to generate cash and return on equity are commendable. Opportunities exist to strengthen its equity base.
Income Statement
75
Positive
CSG Systems International shows a steady growth in revenue, with a Revenue Growth Rate of 0.36% for the TTM (Trailing-Twelve-Months) period. The Gross Profit Margin remains strong at 48.7%, and the Net Profit Margin is a healthy 6.95%. EBIT and EBITDA margins are 11.41% and 17.23% respectively, indicating solid operational efficiency. However, the slight decline in Net Income from the previous period suggests potential areas for improvement.
Balance Sheet
70
Positive
The company maintains a manageable Debt-to-Equity Ratio of 2.00, indicating a moderate level of leverage. The Return on Equity (ROE) for the TTM period is 29.50%, reflecting effective use of equity. However, the Equity Ratio stands at 19.95%, suggesting lower equity financing relative to total assets, which could imply higher financial risk.
Cash Flow
80
Positive
CSG Systems International displays strong cash flow management with an Operating Cash Flow to Net Income Ratio of 2.11, indicating robust cash generation relative to net earnings. The Free Cash Flow to Net Income Ratio is 1.85, highlighting the company's ability to convert earnings into free cash flow efficiently. Furthermore, the Free Cash Flow Growth Rate of 36.36% suggests a positive cash flow trajectory.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.20B1.17B1.09B1.05B990.53M
Gross Profit582.78M554.22M524.58M503.28M454.94M
EBITDA215.25M194.78M149.04M189.55M170.71M
Net Income86.85M66.25M44.06M72.33M58.71M
Balance Sheet
Total Assets1.50B1.44B1.35B1.39B1.33B
Cash, Cash Equivalents and Short-Term Investments161.79M186.26M150.44M233.67M240.30M
Total Debt574.58M592.80M487.19M468.06M469.79M
Total Liabilities1.22B1.17B993.30M946.90M909.61M
Stockholders Equity282.57M273.33M355.25M436.61M422.39M
Cash Flow
Free Cash Flow113.30M103.92M26.61M113.66M143.62M
Operating Cash Flow135.72M131.90M63.60M140.22M173.02M
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
Negative
Last Price62.10
Price Trends
50DMA
63.90
Negative
100DMA
62.08
Positive
200DMA
57.91
Positive
Market Momentum
MACD
-0.37
Positive
RSI
44.17
Neutral
STOCH
62.01
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CSGS, the sentiment is Negative. The current price of 62.1 is below the 20-day moving average (MA) of 63.58, below the 50-day MA of 63.90, and above the 200-day MA of 57.91, indicating a neutral trend. The MACD of -0.37 indicates Positive momentum. The RSI at 44.17 is Neutral, neither overbought nor oversold. The STOCH value of 62.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CSGS.

CSG Systems International Risk Analysis

CSG Systems International disclosed 27 risk factors in its most recent earnings report. CSG Systems International reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

CSG Systems International Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
$5.96B22.0022.19%-1.62%36.57%
74
Outperform
$4.72B17.7219.69%13.11%91.21%
74
Outperform
$9.83B18.5015.45%2.29%-4.37%7.18%
73
Outperform
$1.35B28.1324.36%1.29%4.90%9.91%
72
Outperform
$1.83B21.5930.24%2.00%3.08%34.87%
72
Outperform
$5.23B64.4510.13%19.46%16.20%
63
Neutral
$34.70B5.15-11.38%1.67%5.54%-17.15%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CSGS
CSG Systems International
62.10
16.98
37.63%
ACIW
ACI Worldwide
44.80
1.65
3.82%
DOX
Amdocs
87.85
2.90
3.41%
SPSC
SPS Commerce
136.49
-69.31
-33.68%
WEX
WEX
175.62
-11.01
-5.90%
ATEN
A10 Networks
18.58
4.69
33.77%

CSG Systems International Corporate Events

Executive/Board ChangesShareholder Meetings
CSG Systems International Annual Stockholders Meeting Outcomes
Positive
May 16, 2025

On May 14, 2025, CSG Systems International, Inc. held its Annual Meeting of Stockholders where key proposals were voted upon. The election of Class I Directors saw high approval rates, with Gregory Conley, Marwan Fawaz, and Samantha Greenberg receiving 98.3%, 97.0%, and 99.1% of votes, respectively. Additionally, the compensation of CSG’s Named Executive Officers was approved with 78.8% in favor, and KPMG LLP was ratified as the independent registered public accounting firm for fiscal 2025 with 96.5% approval. These outcomes indicate strong shareholder support for the company’s leadership and strategic direction.

The most recent analyst rating on (CSGS) stock is a Buy with a $75.00 price target. To see the full list of analyst forecasts on CSG Systems International stock, see the CSGS Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 24, 2025