Computer Modelling (CMG) AI Stock Analysis

• Market Cap: C$586.03M
• Dividend Yield: 3.87%
• Average Volume (3M): 175.19K
• Price to Earnings (P/E): 26.1
• Beta (1Y): 1.00
• Revenue Growth: 32.49%
• EPS Growth: -0.20%
• Country: CA
• Employees: 320
• Sector: Technology
• Sector Strength: 86
• Industry: Software - Application
• EPS (TTM): 0.06
• Shares Outstanding: 82,540,016
• 10 Day Avg. Volume: 139,263
• 30 Day Avg. Volume: 175,190
• PEG Ratio: 3.39
• Price to Book (P/B): 11.14
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 24.51
• 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: C$8.67
• Price Target Upside: 22.11% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 75 Outperform
• Price Target: ―

Computer Modelling Group demonstrates strong financial performance, particularly with impressive revenue growth and profitability. The technical analysis shows positive momentum, although the stock may be overbought. The valuation is reasonable with a supportive dividend yield. The strategic acquisition enhances growth prospects, contributing positively to the overall score.

Positive Factors

Earnings

CMG reported strong results, driven by growth in its Seismic Solutions segment.

Revenue Growth

Seismic Solutions revenue surged 26% year-over-year, boosted by the Sharp acquisition and favorable foreign exchange rates.

Strategic Focus

Management is shifting focus towards growing software sales, expected to enhance long-term recurring revenue and margins.

Negative Factors

Valuation

Valuation remains the biggest hurdle, with a maintained $12 target price and Market Perform rating.

Computer Modelling Business Overview & Revenue Model

Company Description

Computer Modelling Group Ltd., a computer software technology company, develops and licenses reservoir simulation software in Canada and internationally. The company offers CMOST-AI, an intelligent optimization and analysis tool that offers solution for reservoir by combining statistical analysis, machine learning, and non-biased data interpretation; IMEX, a black oil simulator that is used to model primary and secondary oil recovery processes in conventional and unconventional oil and gas reservoirs; GEM, an equation-of-state reservoir simulator for compositional, chemical, and unconventional reservoir modelling; STARS, a thermal and processes reservoir simulator for the modelling of steam, solvents, air, and chemical recovery processes; and CoFlow, a reservoir and production system modelling software that allows reservoir and production engineers to make informed decisions on large integrated oil and gas projects in Canada. It also provides Builder, a pre-processor that simplifies the creation of simulation models by providing a framework for data integration and workflow management between various data sources; Results, a post-processor that helps in enhancing understanding and insight into recovery processes and reservoir performance; WinProp, a fluid property characterization tool; and Autotune artificial intelligence solutions that tune the model for optimal run time. In addition, it offers professional services comprising specialized support, consulting, training, and contract research services. The company was founded in 1978 and is headquartered in Calgary, Canada.

How the Company Makes Money

CMG generates revenue primarily through the sale and licensing of its proprietary reservoir simulation software. The company's key revenue streams include software license fees, maintenance and support fees, and consulting services. Clients typically purchase licenses for CMG's software, which may be structured as perpetual licenses or subscription-based models. Ongoing maintenance and support contracts provide a steady income stream, ensuring that clients receive updates, technical support, and software enhancements. Additionally, CMG offers consulting services that assist clients in maximizing the value of their software solutions, further contributing to the company's revenue. Strategic partnerships with major oil and gas companies and ongoing investment in research and development are significant factors that bolster CMG's market position and financial performance.

Computer Modelling Financial Statement Overview

Summary

Computer Modelling Group shows strong financials with robust revenue and profit growth, excellent profitability margins, and efficient cash flow management. The balance sheet is stable, indicating effective leverage and equity management.

Income Statement

The company's revenue growth has been strong, particularly evident with a 17.8% increase in revenue for the TTM compared to the previous annual period. Gross profit margin remains high at 77.8%, and the net profit margin has increased to 19.2% for the TTM, reflecting excellent cost management and profitability. The EBIT and EBITDA margins are also robust at 26.2% and 34.3%, respectively, indicating efficient operations. Overall, the income statement reflects a healthy and growing company.

Balance Sheet

The balance sheet is strong, with a debt-to-equity ratio of 0.48 in the TTM, suggesting a balanced leverage strategy. The return on equity is impressive at 30.1%, showing strong profitability relative to shareholder equity. The equity ratio is 40.9%, indicating a solid equity base. The balance sheet indicates financial stability and effective capital management, with no significant risks in leverage.

Cash Flow

The company's free cash flow grew by 45.1% in the TTM, a sign of strong cash generation capabilities. The operating cash flow to net income ratio stands at 1.44, reflecting efficient conversion of income into cash. However, the free cash flow to net income ratio is slightly lower at 1.41, suggesting some investment in capital expenditures. Overall, cash flows are healthy, supporting operational needs and potential future growth.

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement
Total Revenue	128.05M	108.68M	73.85M	66.20M	67.36M	75.79M
Gross Profit	99.62M	91.45M	56.69M	49.92M	51.67M	57.66M
EBITDA	43.79M	42.47M	31.46M	29.35M	32.60M	37.44M
Net Income	24.56M	26.26M	19.80M	18.41M	20.19M	23.48M
Balance Sheet
Total Assets	199.68M	172.37M	137.13M	125.15M	122.49M	120.87M
Cash, Cash Equivalents and Short-Term Investments	39.73M	63.08M	66.85M	59.66M	49.07M	40.51M
Total Debt	38.91M	36.96M	37.98M	39.59M	40.96M	42.38M
Total Liabilities	117.97M	104.56M	84.68M	78.43M	79.07M	82.50M
Stockholders Equity	81.70M	67.81M	52.45M	46.72M	43.42M	38.37M
Cash Flow
Free Cash Flow	34.59M	35.43M	23.83M	28.01M	26.03M	19.54M
Operating Cash Flow	35.44M	36.08M	25.88M	28.71M	26.43M	20.53M
Investing Cash Flow	-29.46M	-23.46M	-2.05M	-703.00K	-397.00K	-990.00K
Financing Cash Flow	-13.47M	-16.38M	-16.64M	-17.42M	-17.47M	-33.33M

Computer Modelling Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 7.10
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CMG, the sentiment is Neutral. The current price of 7.1 is above the 20-day moving average (MA) of 6.98, below the 50-day MA of 7.39, and below the 200-day MA of 9.29, indicating a neutral trend. The MACD of -0.07 indicates Negative momentum. The RSI at 49.49 is Neutral, neither overbought nor oversold. The STOCH value of 44.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:CMG.

Computer Modelling Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CMG	75 Outperform	C$586.03M	26.12	29.19%	3.87%	32.49%	-0.20%
KXS	74 Outperform	C$5.69B	407.58	2.32%	―	15.14%	-31.45%
DCBO	74 Outperform	$1.14B	36.42	41.12%	―	20.52%	246.69%
ENGH	73 Outperform	$1.27B	16.19	13.26%	7.17%	5.12%	-2.77%
TCS	71 Outperform	C$540.03M	120.61	6.39%	0.93%	2.61%	46.26%
BLN	69 Neutral	C$611.63M	―	-13.97%	―	26.80%	69.67%
Sector *	49 Neutral	C$2.90B	2.14	-80.91%	2.95%	6.62%	-18.96%

Computer Modelling Corporate Events

Computer Modelling Group Reports Strong Q3 Results Post-Acquisition

Computer Modelling Group Ltd. announced its third-quarter results for fiscal 2025, highlighting a revenue increase to $35.8 million, driven by its recent acquisition of Sharp Reflections GmbH. The company also reported a significant 71% rise in net income to $9.6 million due to increased operating profit and foreign exchange gains. The acquisition of Sharp has notably contributed to the growth in the Seismic Solutions segment, positioning the company for enhanced market competitiveness.

Computer Modelling Group Reports Strong Q3 2025 Results and Strategic Acquisition Impact

Computer Modelling Group Ltd. reported its financial results for the third quarter of fiscal 2025, marking a notable increase in its financial performance compared to the previous year. The recent acquisition of Sharp Reflections GmbH contributed significantly to the company’s Seismic Solutions segment, resulting in a 9% contribution to total revenue and a substantial increase in operating profit and net income. The company’s strategic acquisition and robust growth in software and service revenues have positioned it favorably in the market, enhancing stakeholder value through increased earnings per share and cash flow.