Constellation Software (CSU) AI Stock Analysis

• Market Cap: C$105.47B
• Dividend Yield: 0.11%
• Average Volume (3M): 26.55K
• Price to Earnings (P/E): 103.6
• Beta (1Y): 1.12
• Revenue Growth: 20.99%
• EPS Growth: 33.05%
• Country: CA
• Employees: 45,000
• Sector: Technology
• Sector Strength: 93
• Industry: Software - Application
• EPS (TTM): 33.40
• Shares Outstanding: 21,191,530
• 10 Day Avg. Volume: 20,912
• 30 Day Avg. Volume: 26,549
• PEG Ratio: 72.17
• Price to Book (P/B): 24.94
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 34.30
• Enterprise Value/Market Cap: 0.74
• Enterprise Value/Revenue: 1.99
• Enterprise Value/Gross Profit: 8.51
• Enterprise Value/Ebitda: 8.58
• 1Y Price Target: C$5,712.50
• Price Target Upside: 13.34% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 74 Outperform
• Price Target: C$5,555.00 ▲(10.22%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

Company Management

Constellation is considered very well-managed with a strong balance sheet, mitigating potential risks.

Financial Health

Cash flow was significantly higher than consensus, showing strong financial health.

Mergers and Acquisitions

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

Constellation Software Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5040.07
• 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 5040.07 is above the 20-day moving average (MA) of 4951.48, above the 50-day MA of 4947.20, and above the 200-day MA of 4686.28, indicating a bullish trend. The MACD of 17.25 indicates Negative momentum. The RSI at 58.45 is Neutral, neither overbought nor oversold. The STOCH value of 59.32 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
OTEX	78 Outperform	$10.06B	11.61	15.87%	3.70%	-8.74%	307.82%
SHOP	76 Outperform	$212.93B	103.14	16.15%	―	30.60%	―
KXS	74 Outperform	C$5.68B	410.58	2.32%	―	15.14%	-31.45%
CSU	74 Outperform	C$105.47B	103.62	27.41%	0.11%	20.99%	33.05%
DSG	74 Outperform	$12.19B	62.63	10.66%	―	17.42%	22.81%
ENGH	72 Outperform	$1.29B	16.71	13.26%	5.11%	5.12%	-2.77%
Sector *	50 Neutral	C$3.01B	2.40	-63.12%	2.48%	4.49%	-6.07%

Constellation Software Corporate Events

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.