Constellation Software (CSU) AI Stock Analysis

• Market Cap: C$82.00B
• Dividend Yield: 0.14%
• Average Volume (3M): 61.50K
• Price to Earnings (P/E): 94.7
• Beta (1Y): 1.12
• Revenue Growth: 19.29%
• EPS Growth: -1.42%
• Country: CA
• Employees: 45,000
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 35.62
• Shares Outstanding: 21,191,530
• 10 Day Avg. Volume: 86,146
• 30 Day Avg. Volume: 61,502
• 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$5,521.43
• Price Target Upside: 39.78% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7

• Rating: 59 Neutral
• Price Target: C$3,825.00 ▼(-3.16% Downside)

Constellation Software's strong financial performance is a significant positive factor, supported by consistent revenue growth and robust cash flow generation. However, the technical analysis indicates a bearish trend, with the stock being oversold. The high P/E ratio suggests overvaluation, and the low dividend yield offers limited income potential. These factors collectively result in a moderate overall stock score.

Positive Factors

Revenue Growth

Consistent revenue growth highlights the company's ability to expand its market reach and enhance its product offerings, ensuring long-term sustainability.

Cash Flow Generation

Strong cash flow generation provides financial flexibility, enabling the company to invest in growth opportunities and weather economic downturns.

Strategic Acquisitions

Strategic acquisitions like ClarityRFID strengthen the company's portfolio, allowing it to enter new markets and leverage synergies for growth.

Negative Factors

High Leverage

High leverage can increase financial risk, potentially impacting the company's ability to invest in growth and manage economic fluctuations.

Leadership Change

Leadership changes can lead to strategic shifts and uncertainty, potentially affecting the company's long-term strategic direction and operational execution.

Profit Margin Pressure

Decreasing profit margins may indicate rising costs or pricing pressures, which could affect the company's ability to maintain profitability over time.

Constellation Software Business Overview & Revenue Model

Company Description

Constellation Software Inc., together with its subsidiaries, acquires, builds, and manages vertical market software businesses in Canada, the United States, the United Kingdom, and rest of Europe. Its industry specific software businesses provide specialized and mission-critical software solutions. The company serves public and private sector markets. Constellation Software Inc. was incorporated in 1995 and is headquartered in Toronto, Canada.

How the Company Makes Money

Constellation Software Inc. makes money primarily through the acquisition and operation of vertical market software (VMS) businesses. These businesses generate revenue by providing specialized software solutions that are essential to the operations of their clients across various industries. The company's revenue streams include software license sales, maintenance and support fees, professional services such as consulting and implementation, and subscription-based services. Constellation Software's growth strategy heavily relies on acquiring VMS companies with stable customer bases and recurring revenue models. This acquisition-driven approach allows the company to expand its portfolio and increase its revenue by leveraging the expertise and market presence of the acquired businesses. Additionally, the company benefits from economies of scale and cross-selling opportunities within its diverse portfolio, further enhancing its profitability. Strategic partnerships and long-term customer relationships also play a significant role in sustaining and growing its revenue streams.

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: 3949.97
• 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:CSU, the sentiment is Negative. The current price of 3949.97 is below the 20-day moving average (MA) of 4017.48, below the 50-day MA of 4325.29, and below the 200-day MA of 4666.28, indicating a bearish trend. The MACD of -140.88 indicates Negative momentum. The RSI at 42.86 is Neutral, neither overbought nor oversold. The STOCH value of 57.83 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	79 Outperform	C$298.78B	85.69	22.02%	―	32.77%	84.83%
DSG	73 Outperform	$11.67B	57.66	10.54%	―	15.63%	18.47%
ENGH	71 Outperform	$1.14B	15.25	12.56%	6.39%	0.03%	-10.21%
OTEX	70 Outperform	$13.72B	23.39	10.73%	2.74%	-7.77%	-1.03%
KXS	70 Outperform	C$5.23B	148.27	5.93%	―	15.81%	22.17%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
CSU	59 Neutral	C$82.00B	94.68	22.00%	0.14%	19.29%	-1.42%

Constellation Software Corporate Events

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.

Constellation Software to Release Q2 Results on August 8, 2025

Constellation Software Inc. has announced that it will release its second quarter results on August 8, 2025, after market close. The company has transitioned from holding conference calls to a Q&A facility on its website, allowing shareholders to submit questions and access archived responses, which aims to provide ongoing access to information about the company’s strategy and operations.

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.

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.