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CSG Systems (CSGS)
:CSGS

CSG Systems International (CSGS) AI Stock Analysis

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CSG Systems International

(NASDAQ:CSGS)

Rating:76Outperform
Price Target:
$71.00
▲(7.51%Upside)
CSG Systems International presents a balanced investment opportunity with solid financial health, positive earnings call insights, and supportive corporate events. While the stock's valuation is moderate, the company's strong cash flow management and operational efficiency provide a stable outlook despite challenges in specific market segments.
Positive Factors
Earnings
CSG reported first-quarter results that slightly beat consensus estimates for adjusted revenue and comfortably beat on EPS.
Market Position
CSGS is considered a high-quality company with a strong competitive product offering, sticky customers, good growth prospects, and visibility into 90% of its revenues over the next 12 months due to long-term contracts.
Revenue Growth
Results have confirmed CSG’s ability to accelerate revenue growth, a key part of the investment thesis.
Negative Factors
Business Operations
There are concerns about concentration mix and headwinds in the core operations.
Regional Performance
Growth in the APAC region declined by 20% year over year.
Revenue Guidance
Organic revenue growth guidance was lowered to the range +2-3% y/y, from +2-4% y/y previously.

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: 8.46%|
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. The company's financial performance is marked by a strong gross profit margin of 48.7% and a healthy net profit margin of 6.95%. Despite moderate leverage, the firm demonstrates commendable cash generation and return on equity.
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.20B1.20B1.17B1.09B1.05B990.53M
Gross Profit585.15M582.78M554.22M524.58M503.28M454.94M
EBITDA207.04M215.25M194.78M149.04M189.55M170.71M
Net Income83.52M86.85M66.25M44.06M72.33M58.71M
Balance Sheet
Total Assets1.42B1.50B1.44B1.35B1.39B1.33B
Cash, Cash Equivalents and Short-Term Investments136.02M161.79M186.26M150.44M233.67M240.30M
Total Debt566.13M574.58M592.80M487.19M468.06M469.79M
Total Liabilities1.14B1.22B1.17B993.30M946.90M909.61M
Stockholders Equity283.10M282.57M273.33M355.25M436.61M422.39M
Cash Flow
Free Cash Flow154.49M113.30M103.92M26.61M113.66M143.62M
Operating Cash Flow176.54M135.72M131.90M63.60M140.22M173.02M
Investing Cash Flow-4.60M-5.13M-27.91M-9.04M-66.71M-66.26M
Financing Cash Flow-73.24M-79.92M-31.30M-51.69M-33.39M-76.97M

CSG Systems International Technical Analysis

Technical Analysis Sentiment
Positive
Last Price66.04
Price Trends
50DMA
63.34
Positive
100DMA
62.18
Positive
200DMA
56.71
Positive
Market Momentum
MACD
0.56
Negative
RSI
61.37
Neutral
STOCH
82.77
Negative
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 66.04 is above the 20-day moving average (MA) of 64.12, above the 50-day MA of 63.34, and above the 200-day MA of 56.71, indicating a bullish trend. The MACD of 0.56 indicates Negative momentum. The RSI at 61.37 is Neutral, neither overbought nor oversold. The STOCH value of 82.77 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
DODOX
77
Outperform
$10.30B19.3815.45%2.28%-4.37%7.18%
76
Outperform
$1.91B22.5230.24%1.94%3.08%34.87%
73
Outperform
$1.45B30.2524.36%1.19%4.90%9.91%
72
Outperform
$5.37B66.1210.13%19.46%16.20%
WEWEX
70
Outperform
$5.18B19.4724.37%0.90%26.13%
67
Neutral
$4.85B18.2119.69%13.11%91.21%
63
Neutral
$34.04B6.14-11.52%1.82%5.53%-18.79%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CSGS
CSG Systems International
66.04
26.45
66.81%
ACIW
ACI Worldwide
46.21
6.94
17.67%
DOX
Amdocs
92.60
16.02
20.92%
SPSC
SPS Commerce
141.36
-48.49
-25.54%
WEX
WEX
151.23
-27.64
-15.45%
ATEN
A10 Networks
20.14
6.81
51.09%

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: Jun 24, 2025