Computer Modelling Group (TSX:CMG) - Share price, News & Analysis

CMG fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	3/6
Past Performance	2/6
Financial Health	6/6
Dividends	3/6

CMG Stock Overview

Computer Modelling Group Ltd., a computer software technology company, develops and licenses reservoir simulation software in Canada and internationally.

Rewards

Trading at 30.9% below our estimate of its fair value

Earnings are forecast to grow 11.21% per year

Risk Analysis

Unstable dividend track record

Significant insider selling over the past 3 months

Computer Modelling Group Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Computer Modelling Group
Historical stock prices
Current Share Price	CA$4.50
52 Week High	CA$5.72
52 Week Low	CA$3.83
Beta	1.52
1 Month Change	-6.25%
3 Month Change	-13.13%
1 Year Change	-18.18%
3 Year Change	-38.19%
5 Year Change	-55.80%
Change since IPO	1,465.22%

Recent News & Updates

May 26

Computer Modelling Group's (TSE:CMG) Returns On Capital Not Reflecting Well On The Business

What are the early trends we should look for to identify a stock that could multiply in value over the long term? One...

Shareholder Returns

	CMG	CA Energy Services	CA Market
7D	-2.4%	-1.7%	0.3%
1Y	-18.2%	-0.4%	-4.1%

Return vs Industry: CMG underperformed the Canadian Energy Services industry which returned -0.4% over the past year.

Return vs Market: CMG underperformed the Canadian Market which returned -4.1% over the past year.

Price Volatility

Is CMG's price volatile compared to industry and market?
CMG volatility
CMG Average Weekly Movement	4.8%
Energy Services Industry Average Movement	8.0%
Market Average Movement	9.9%
10% most volatile stocks in CA Market	17.2%
10% least volatile stocks in CA Market	4.3%

Stable Share Price: CMG is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: CMG's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1978	175	Pramod Jain	https://www.cmgl.ca

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.

Computer Modelling Group Fundamentals Summary

How do Computer Modelling Group's earnings and revenue compare to its market cap?
CMG fundamental statistics
Market Cap	CA$361.51m
Earnings (TTM)	CA$18.41m
Revenue (TTM)	CA$66.20m

19.6x

P/E Ratio

5.5x

P/S Ratio

Is CMG overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
CMG income statement (TTM)
Revenue	CA$66.20m
Cost of Revenue	CA$16.00m
Gross Profit	CA$50.21m
Other Expenses	CA$31.80m
Earnings	CA$18.41m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 11, 2022

Earnings per share (EPS)	0.23
Gross Margin	75.84%
Net Profit Margin	27.80%
Debt/Equity Ratio	0%

How did CMG perform over the long term?

See historical performance and comparison

Dividends

4.4%

Current Dividend Yield

87%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is CMG undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for CMG?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for CMG. This is calculated by dividing CMG's market cap by their current preferred multiple.
What is CMG's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CA$361.51m

CMG key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	5.2x
Enterprise Value/EBITDA	12.2x
PEG Ratio	1.8x

Price to Earnings Ratio vs Peers

How does CMG's PE Ratio compare to its peers?

CMG PE Ratio vs Peers

The above table shows the PE ratio for CMG vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	22x

Forward PE

Price-To-Earnings vs Peers: CMG is good value based on its Price-To-Earnings Ratio (19.6x) compared to the peer average (22x).

Price to Earnings Ratio vs Industry

How does CMG's PE Ratio compare vs other companies in the Energy Services Industry?

Price-To-Earnings vs Industry: CMG is expensive based on its Price-To-Earnings Ratio (19.6x) compared to the Canadian Energy Services industry average (18x)

Price to Earnings Ratio vs Fair Ratio

What is CMG's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

CMG PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	19.6x
Fair PE Ratio	12.2x

Price-To-Earnings vs Fair Ratio: CMG is expensive based on its Price-To-Earnings Ratio (19.6x) compared to the estimated Fair Price-To-Earnings Ratio (12.2x).

Share Price vs Fair Value

What is the Fair Price of CMG when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: CMG (CA$4.5) is trading below our estimate of fair value (CA$6.51)

Significantly Below Fair Value: CMG is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: CMG is poor value based on its PEG Ratio (1.8x)

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Future Growth

How is Computer Modelling Group forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

11.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: CMG's forecast earnings growth (11.2% per year) is above the savings rate (1.6%).

Earnings vs Market: CMG's earnings (11.2% per year) are forecast to grow faster than the Canadian market (8.3% per year).

High Growth Earnings: CMG's earnings are forecast to grow, but not significantly.

Revenue vs Market: CMG's revenue (5.2% per year) is forecast to grow slower than the Canadian market (7.3% per year).

High Growth Revenue: CMG's revenue (5.2% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: CMG's Return on Equity is forecast to be high in 3 years time (37.2%)

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Past Performance

How has Computer Modelling Group performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-2.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: CMG has high quality earnings.

Growing Profit Margin: CMG's current net profit margins (27.8%) are lower than last year (30%).

Past Earnings Growth Analysis

Earnings Trend: CMG's earnings have declined by 2.6% per year over the past 5 years.

Accelerating Growth: CMG's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: CMG had negative earnings growth (-8.8%) over the past year, making it difficult to compare to the Energy Services industry average (-8%).

Return on Equity

High ROE: CMG's Return on Equity (39.4%) is considered high.

Discover strong past performing companies

Financial Health

How is Computer Modelling Group's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: CMG's short term assets (CA$78.9M) exceed its short term liabilities (CA$38.9M).

Long Term Liabilities: CMG's short term assets (CA$78.9M) exceed its long term liabilities (CA$39.5M).

Debt to Equity History and Analysis

Debt Level: CMG is debt free.

Reducing Debt: CMG has not had any debt for past 5 years.

Debt Coverage: CMG has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: CMG has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Computer Modelling Group current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

4.44%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: CMG's dividend (4.44%) is higher than the bottom 25% of dividend payers in the Canadian market (2.03%).

High Dividend: CMG's dividend (4.44%) is low compared to the top 25% of dividend payers in the Canadian market (5.33%).

Stability and Growth of Payments

Stable Dividend: CMG's dividend payments have been volatile in the past 10 years.

Growing Dividend: CMG's dividend payments have fallen over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: At its current payout ratio (87.3%), CMG's payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (57.4%), CMG's dividend payments are covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

4.5yrs

Average management tenure

CEO

Pramod Jain (40 yo)

0.083

Tenure

Mr. Pramod Jain is President and Chief Executive Officer of Computer Modelling Group Ltd. since May 10, 2022. Mr. Jain is a seasoned executive with experience in the software industry with a demonstrated t...

Leadership Team

Experienced Management: CMG's management team is considered experienced (4.5 years average tenure).

Board Members

Experienced Board: CMG's board of directors are seasoned and experienced ( 10.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: CMG insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/26 00:00
End of Day Share Price	2022/06/24 00:00
Earnings	2022/03/31
Annual Earnings	2022/03/31