Constellation Software (CSU) AI Stock Analysis

• Market Cap: C$104.03B
• Dividend Yield: 0.11%
• Average Volume (3M): 29.88K
• Price to Earnings (P/E): 100.9
• Beta (1Y): 1.10
• Revenue Growth: 20.99%
• EPS Growth: 33.05%
• Country: CA
• Employees: 45,000
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 33.60
• Shares Outstanding: 21,191,530
• 10 Day Avg. Volume: 29,377
• 30 Day Avg. Volume: 29,883
• PEG Ratio: 0.31
• Price to Book (P/B): 19.30
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 26.31
• Enterprise Value/Market Cap: 0.33
• Enterprise Value/Revenue: 0.88
• Enterprise Value/Gross Profit: 3.76
• Enterprise Value/Ebitda: 3.79
• 1Y Price Target: C$5,712.50
• Price Target Upside: 15.95% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 74 Outperform
• Price Target: C$5,555.00 ▲(12.75%Upside)

Constellation Software's strong financial performance and positive corporate events drive its overall score. However, high valuation metrics and neutral technical indicators moderate the score. The company's strategic acquisitions and robust financial health position it well for future growth, despite its current high valuation.

Positive Factors

Financial Performance

Cash flow showed a significant increase, which strengthens the company's financial position.

Investment Potential

The company's valuation is seen as attractive compared to other high-performing conglomerates, suggesting a good investment opportunity.

Management Strategy

There is greater confidence in Constellation Software's ability to continue scaling its decentralized M&A framework.

Negative Factors

Earnings Performance

EPS was well below consensus.

Organic Growth

There was a slight organic recurring revenue deceleration, which could indicate potential challenges in maintaining consistent growth.

Revenue Growth

CSU's 12.8% revenue growth was a notable deceleration from recent quarters.

Constellation Software Business Overview & Revenue Model

Company Description

Constellation Software Inc. (CSU) is a leading global provider of software and services, headquartered in Toronto, Canada. The company operates in various sectors including public and private markets, offering specialized, mission-critical software solutions. Constellation Software's core products and services are designed to support a wide range of industries, from healthcare and retail to financial services and transportation, enabling organizations to enhance their operational efficiency and customer engagement.

How the Company Makes Money

Constellation Software makes money through a diversified revenue model primarily based on the acquisition and management of vertical market software companies. The company generates income through the sale of software licenses, maintenance and support services, and professional services such as training and consulting. A significant portion of its revenue also comes from subscription-based models, which provide a steady and recurring income stream. Additionally, Constellation Software's strategy of acquiring and nurturing smaller software businesses allows it to expand its market reach and increase its revenue base. The company's focus on niche markets and its ability to integrate and grow acquired companies are key factors contributing to its financial success.

Constellation Software Financial Statement Overview

Summary

Constellation Software demonstrates impressive financial health across its income statement, balance sheet, and cash flow statement. Strong revenue and profit growth, efficient cost management, and robust cash generation are evident. The balance sheet is solid, though attention to rising debt levels could further strengthen its financial standing.

Income Statement

Constellation Software shows remarkable growth and stability in its income statement. The company has demonstrated consistent revenue growth over the years, with a notable TTM revenue of $10.367 billion, marking an increase from $10.066 billion the previous year. Gross profit margin is very strong at approximately 88.7%, reflecting efficient cost management and high profitability. The net profit margin of 7.15% and the EBIT margin of 16.59% indicate robust operational efficiency. These metrics highlight a well-managed company with sustained growth and profitability.

Balance Sheet

The balance sheet of Constellation Software reflects a strong financial position with a reasonable debt-to-equity ratio of 1.55, indicating a balanced approach to leverage. The equity ratio stands at 21.92%, suggesting a solid equity base relative to total assets. While the return on equity (ROE) at 24.33% indicates excellent returns on shareholder investments, the company should monitor its increasing debt levels to ensure continued financial health. Overall, the balance sheet is robust, with a good mix of equity and debt.

Cash Flow

The cash flow statement reveals Constellation Software's strong cash generation capabilities, with a TTM operating cash flow of $2.287 billion and an impressive free cash flow of $2.215 billion. The free cash flow to net income ratio is 2.99, indicating excellent cash conversion from profits. The company's free cash flow growth rate of 4.03% compared to the previous period showcases steady cash flow growth. These metrics reflect a healthy cash position, supporting ongoing operations and potential growth opportunities.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	10.37B	10.07B	8.40B	6.62B	5.11B	3.97B
Gross Profit	9.19B	8.94B	7.44B	5.86B	4.58B	3.54B
EBITDA	2.62B	2.48B	1.45B	1.63B	1.07B	1.15B
Net Income	741.00M	731.00M	565.00M	512.00M	168.00M	436.00M
Balance Sheet
Total Assets	13.90B	12.86B	10.90B	7.88B	5.77B	4.38B
Cash, Cash Equivalents and Short-Term Investments	2.49B	1.99B	1.30B	926.00M	802.00M	767.00M
Total Debt	4.72B	4.53B	3.68B	2.29B	1.39B	725.00M
Total Liabilities	10.26B	9.58B	8.94B	5.95B	4.25B	3.33B
Stockholders Equity	3.05B	2.79B	1.88B	1.71B	1.06B	1.05B
Cash Flow
Free Cash Flow	2.21B	2.13B	1.74B	1.26B	1.27B	1.16B
Operating Cash Flow	2.29B	2.20B	1.78B	1.30B	1.30B	1.19B
Investing Cash Flow	-1.56B	-1.57B	-1.64B	-1.69B	-1.24B	-512.00M
Financing Cash Flow	-328.00M	114.00M	316.00M	483.00M	-41.00M	-247.00M

Constellation Software Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4926.79
• 50DMA: Positive
• 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 TSE:CSU, the sentiment is Positive. The current price of 4926.79 is above the 20-day moving average (MA) of 4902.57, above the 50-day MA of 4920.45, and above the 200-day MA of 4645.73, indicating a bullish trend. The MACD of 7.06 indicates Negative momentum. The RSI at 56.56 is Neutral, neither overbought nor oversold. The STOCH value of 76.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CSU.

Constellation Software Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SHOP	79 Outperform	$202.61B	91.30	16.15%	―	30.60%	―
DSG	75 Outperform	$11.84B	60.27	10.66%	―	17.42%	22.81%
KXS	74 Outperform	C$5.69B	407.58	2.32%	―	15.14%	-31.45%
CSU	74 Outperform	C$104.03B	100.93	27.41%	0.11%	20.99%	33.05%
OTEX	74 Outperform	C$10.19B	11.57	15.87%	5.01%	-8.74%	307.82%
ENGH	73 Outperform	$1.27B	16.22	13.26%	7.15%	5.12%	-2.77%
Sector *	63 Neutral	$33.22B	5.99	-11.76%	1.92%	5.54%	-19.87%

Constellation Software Corporate Events

Topicus.com Expands European Footprint with Cipal Schaubroeck Acquisition

Topicus.com Inc., through its subsidiary Total Specific Solutions (TSS) B.V., has successfully acquired Cipal Schaubroeck NV in Belgium. This acquisition aligns with Topicus.com’s strategy of expanding its portfolio of mission-critical software solutions across Europe, potentially enhancing its market position and offering new growth opportunities in the region.

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.

Constellation Software Elects New Board Members at AGM

Constellation Software Inc. announced the election of nine directors at its annual general shareholders’ meeting held on May 13, 2025. The meeting saw the election of all nominees listed in the management proxy circular, with significant support from shareholders. The company also acknowledged the contributions of directors who did not stand for re-election, indicating a transition in its board composition. This election is pivotal for Constellation Software as it continues to strengthen its governance and strategic direction.

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.

Constellation Software Reports Strong Q1 2025 Results and Declares Dividend

Constellation Software Inc. reported a 13% increase in revenue for Q1 2025, reaching $2,654 million, driven primarily by acquisitions. The company declared a $1.00 per share dividend and reported a net income of $115 million, reflecting a positive financial performance. The acquisition of shares in Asseco Poland S.A. and increased cash flows from operations highlight Constellation’s strategic growth and robust financial health.

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.

Constellation Software to Release Q1 Results on May 12, 2025

Constellation Software Inc. announced it will release its first quarter results on May 12, 2025, after market close. The company has stopped holding conference calls for quarterly financial results and instead offers a Q&A facility on its website for shareholders to submit questions, aiming to provide ongoing access to information about its strategy and operations.

Constellation Software and Subsidiaries Announce Virtual Annual Meetings

Constellation Software Inc., along with its subsidiaries Topicus.com Inc. and Lumine Group Inc., announced their upcoming annual general meetings scheduled for May 13, 2025, which will be conducted virtually via live audio webcast. Shareholders will have the opportunity to participate in a joint question and answer session with senior management following the meetings. This approach reflects the companies’ ongoing commitment to engaging with stakeholders and adapting to digital formats, potentially enhancing shareholder participation and transparency.