Constellation Software (CSU) AI Stock Analysis

• Market Cap: C$80.15B
• Dividend Yield: 0.16%
• Average Volume (3M): 66.01K
• Price to Earnings (P/E): 92.6
• Beta (1Y): 1.14
• Revenue Growth: 19.29%
• EPS Growth: -1.42%
• Country: CA
• Employees: 45,000
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 35.54
• Shares Outstanding: 21,191,530
• 10 Day Avg. Volume: 56,132
• 30 Day Avg. Volume: 66,014
• PEG Ratio: 3.05
• Price to Book (P/B): 23.43
• Price to Sales (P/S): 6.50
• P/FCF Ratio: 30.74
• 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$5,525.71
• Price Target Upside: 54.05% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7

• Rating: 61 Neutral
• Price Target: C$3,644.00 ▲(1.59% Upside)

Constellation Software's strong financial performance is the primary driver of its stock score, supported by consistent revenue growth and robust cash flow. However, technical indicators suggest a bearish trend, and the high P/E ratio indicates potential overvaluation, which weigh down the overall score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, enhancing long-term financial stability.

Cash Generation

Strong cash generation capabilities provide financial flexibility and support for future investments and acquisitions.

Strategic Acquisitions

Strategic acquisitions expand product offerings and market reach, strengthening competitive position and driving long-term growth.

Negative Factors

High Leverage

High leverage can increase financial risk and limit flexibility, potentially impacting the company's ability to invest in growth opportunities.

Profit Margin Pressure

Decreasing profit margins may indicate rising costs or pricing pressures, which could affect long-term profitability if not addressed.

Leadership Transition

Leadership changes can create uncertainty and disrupt strategic direction, potentially impacting operational execution and company culture.

Constellation Software Business Overview & Revenue Model

Company Description

Constellation Software Inc. (CSU) is a Canadian company that specializes in acquiring, managing, and building software businesses across various sectors, including public and private sectors, healthcare, and financial services. Founded in 1998, CSU operates through numerous subsidiaries, each focusing on specific vertical markets, providing tailored software solutions that enhance operational efficiency and customer engagement. The company's core offerings include enterprise resource planning (ERP) systems, customer relationship management (CRM) tools, and other specialized software solutions designed to meet the needs of diverse industries.

How the Company Makes Money

Constellation Software generates revenue primarily through software licensing, maintenance, and subscription services from its subsidiaries. The company follows a business model focused on acquiring established software firms and leveraging their products and client bases to drive growth. Key revenue streams include recurring revenue from maintenance contracts and subscriptions, as well as one-time fees from software sales and implementation services. Additionally, CSU benefits from cross-selling opportunities among its subsidiaries and strategic partnerships that enhance its product offerings and market reach, contributing to its overall financial performance.

Constellation Software Financial Statement Overview

Summary

Constellation Software exhibits strong financial performance with consistent revenue growth and robust cash flow generation. While profitability margins are solid, the high leverage poses a potential risk. Overall, the company demonstrates effective operational management and financial stability.

Income Statement

Constellation Software has demonstrated consistent revenue growth, with a TTM revenue growth rate of 3.63%. The gross profit margin remains robust at approximately 88.78%, indicating strong cost management. However, the net profit margin has slightly decreased to 5.77% in the TTM, reflecting some pressure on profitability. The EBIT and EBITDA margins are healthy, showcasing operational efficiency.

Balance Sheet

The company's debt-to-equity ratio is relatively high at 1.57, indicating significant leverage. However, the return on equity is strong at 21.03%, suggesting effective use of equity to generate profits. The equity ratio stands at 22.37%, reflecting a moderate level of equity financing.

Cash Flow

Constellation Software's free cash flow growth rate is impressive at 8.46% TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio is 3.67, suggesting efficient cash conversion. The free cash flow to net income ratio is nearly 97%, highlighting robust cash profitability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	10.74B	10.07B	8.41B	6.62B	5.11B	3.97B
Gross Profit	3.97B	3.62B	2.95B	2.32B	1.88B	1.49B
EBITDA	2.38B	1.97B	1.60B	1.25B	1.11B	859.00M
Net Income	641.00M	731.00M	565.00M	512.00M	310.00M	436.00M
Balance Sheet
Total Assets	14.70B	12.86B	10.78B	7.95B	5.71B	4.37B
Cash, Cash Equivalents and Short-Term Investments	2.57B	1.99B	1.29B	935.08M	794.46M	765.46M
Total Debt	5.15B	4.53B	4.46B	2.31B	1.38B	723.54M
Total Liabilities	10.72B	9.57B	8.84B	6.00B	4.21B	3.32B
Stockholders Equity	3.29B	2.79B	1.86B	1.73B	1.05B	1.05B
Cash Flow
Free Cash Flow	2.28B	1.89B	1.63B	1.15B	1.22B	1.19B
Operating Cash Flow	2.36B	1.95B	1.68B	1.19B	1.24B	1.21B
Investing Cash Flow	-1.57B	-1.52B	-1.67B	-1.65B	-1.22B	-540.06M
Financing Cash Flow	-153.11M	277.98M	456.28M	540.42M	-983.21K	-225.90M

Constellation Software Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3586.89
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CSU, the sentiment is Negative. The current price of 3586.89 is below the 20-day moving average (MA) of 3812.18, below the 50-day MA of 4110.28, and below the 200-day MA of 4626.32, indicating a bearish trend. The MACD of -133.51 indicates Positive momentum. The RSI at 37.75 is Neutral, neither overbought nor oversold. The STOCH value of 22.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CSU.

Constellation Software Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SHOP	―	$324.55B	101.23	22.02%	―	32.77%	84.83%
ENGH	―	$1.12B	15.40	12.56%	6.42%	0.03%	-10.21%
OTEX	―	$13.47B	23.06	10.73%	2.80%	-7.77%	-1.03%
KXS	―	C$5.08B	146.89	5.93%	―	15.81%	22.17%
DSG	―	$10.75B	52.98	10.54%	―	15.63%	18.47%
Sector *	―	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
CSU	―	C$80.15B	92.55	22.00%	0.16%	19.29%	-1.42%

Constellation Software Corporate Events

Constellation Software to Release Q3 Results with New Q&A Approach

Constellation Software Inc. announced it will release its third quarter results on November 7, 2025, after markets close. The company has discontinued conference calls for quarterly financial results, opting instead for a Q&A facility on its website where shareholders can submit questions. This initiative aims to provide ongoing access to information about the company’s strategy and operations, potentially enhancing transparency and engagement with stakeholders.

The most recent analyst rating on (TSE:CSU) stock is a Buy with a C$6000.00 price target. To see the full list of analyst forecasts on Constellation Software stock, see the TSE:CSU Stock Forecast page.

Constellation Software’s Harris Group to Acquire TECVIA Holding GmbH

Constellation Software’s Harris operating group has entered into an agreement to acquire TECVIA Holding GmbH, pending closing conditions. This acquisition is expected to enhance Constellation’s portfolio in the vertical market software industry, potentially strengthening its market position and offering new opportunities for growth.

The most recent analyst rating on (TSE:CSU) stock is a Buy with a C$6000.00 price target. To see the full list of analyst forecasts on Constellation Software stock, see the TSE:CSU Stock Forecast page.

Topicus.com Completes Strategic Acquisition of Asseco Poland Shares

Topicus.com Inc., a subsidiary of Constellation Software Inc., has completed the acquisition of 14.84% of treasury shares in Asseco Poland S.A., following regulatory approvals. This acquisition, along with a previously acquired 9.99% stake, strengthens Topicus’ influence in Asseco, with a shareholders’ agreement now effective, potentially enhancing its strategic positioning in the European software market.

The most recent analyst rating on (TSE:CSU) stock is a Hold with a C$3825.00 price target. To see the full list of analyst forecasts on Constellation Software stock, see the TSE:CSU Stock Forecast page.

Topicus.com Completes Strategic Acquisition in Asseco Poland

Constellation Software Inc. and Topicus.com Inc. have announced the completion of Topicus’ acquisition of 14.84% of treasury shares in Asseco Poland S.A. This follows a previous acquisition of 9.99% of issued shares and the signing of a shareholders’ agreement with the Adam Góral Family Foundation. The acquisition solidifies Topicus’ position in the European software market, enhancing its strategic influence within Asseco and potentially impacting its growth trajectory.

The most recent analyst rating on (TSE:CSU) stock is a Hold with a C$3825.00 price target. To see the full list of analyst forecasts on Constellation Software stock, see the TSE:CSU Stock Forecast page.

Leadership Transition at Constellation Software: Mark Leonard Resigns, Mark Miller Appointed President

Constellation Software Inc. announced the resignation of Mark Leonard from his position as President due to health reasons, with Mark Miller, the current Chief Operating Officer, appointed as the new President. Leonard will remain on the Board of Directors, and the transition is expected to be seamless, with confidence expressed in Miller’s leadership to continue the company’s successful trajectory.

The most recent analyst rating on (TSE:CSU) stock is a Buy with a C$5700.00 price target. To see the full list of analyst forecasts on Constellation Software stock, see the TSE:CSU Stock Forecast page.

Constellation Software to Host AI Impact Q&A Webcast

Constellation Software Inc. has announced a live shareholder Q&A webcast to discuss the impact of Artificial Intelligence on software businesses, scheduled for September 22, 2025. The session, prompted by a shareholder’s inquiry, aims to address uncertainties surrounding AI for employees, shareholders, and customers, featuring a panel of AI specialists from within the company to provide insights.

The most recent analyst rating on (TSE:CSU) stock is a Buy with a C$6000.00 price target. To see the full list of analyst forecasts on Constellation Software stock, see the TSE:CSU Stock Forecast page.

Constellation Software Reports Q2 2025 Results with Revenue Growth Amid Profit Decline

Constellation Software Inc. reported a 15% increase in revenue for the second quarter of 2025, driven largely by acquisitions and organic growth. Despite this revenue growth, net income attributable to common shareholders saw a significant decline of 68% compared to the previous year, reflecting challenges in profitability. The company completed several acquisitions with a total consideration of $469 million, which contributed to the revenue increase. Cash flows from operations increased by 63%, indicating strong operational performance, while free cash flow available to shareholders also saw a 20% increase. The company declared a quarterly dividend of $1.00 per share, reinforcing its commitment to returning value to shareholders.

The most recent analyst rating on (TSE:CSU) stock is a Hold with a C$4250.00 price target. To see the full list of analyst forecasts on Constellation Software stock, see the TSE:CSU Stock Forecast page.