Executive Summary
Constellation Software Inc., together with its subsidiaries, acquires, builds, and manages vertical market software businesses in the United States, Canada, Italy, Germany, India, United Kingdom, Brazil, Switzerland, Austria, Israel, and internationally. More Details
Rewards
Risk Analysis
Snowflake Analysis
Solid track record with adequate balance sheet.
Similar Companies
Share Price & News
How has Constellation Software's share price performed over time and what events caused price changes?
Latest Share Price and Events
Stable Share Price: CSU is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 4% a week.
Volatility Over Time: CSU's weekly volatility (4%) has been stable over the past year.
Market Performance
7 Day Return
4.7%
CSU
4.6%
CA Software
0.9%
CA Market
1 Year Return
45.6%
CSU
83.6%
CA Software
39.2%
CA Market
Return vs Industry: CSU underperformed the Canadian Software industry which returned 83.6% over the past year.
Return vs Market: CSU exceeded the Canadian Market which returned 39.2% over the past year.
Shareholder returns
| CSU | Industry | Market | |
|---|---|---|---|
| 7 Day | 4.7% | 4.6% | 0.9% |
| 30 Day | 10.1% | 6.2% | 3.0% |
| 90 Day | 14.1% | 9.8% | 7.5% |
| 1 Year | 56.9%45.6% | 92.4%83.6% | 43.9%39.2% |
| 3 Year | 144.2%119.1% | 100.8%89.5% | 32.5%19.8% |
| 5 Year | 297.7%251.0% | 206.4%186.4% | 59.3%35.1% |
Long-Term Price Volatility Vs. Market
How volatile is Constellation Software's share price compared to the market and industry in the last 5 years?
Simply Wall St News
5 days ago | Simply Wall St
Constellation Software (TSE:CSU) Has Gifted Shareholders With A Fantastic 284% Total Return On Their Investment3 months ago | Simply Wall St
Many Would Be Jealous Of Constellation Software's (TSE:CSU) Returns On Capital3 months ago | Simply Wall St
Who Has Been Selling Constellation Software Inc. (TSE:CSU) Shares?Valuation
Is Constellation Software undervalued compared to its fair value and its price relative to the market?
1.4%
Undervalued compared to fair value
Share Price vs. Fair Value
Below Fair Value: CSU (CA$1834.75) is trading below our estimate of fair value (CA$1906.97)
Significantly Below Fair Value: CSU is trading below fair value, but not by a significant amount.
Price To Earnings Ratio
PE vs Industry: CSU is poor value based on its PE Ratio (70.9x) compared to the CA Software industry average (47.2x).
PE vs Market: CSU is poor value based on its PE Ratio (70.9x) compared to the Canadian market (16.5x).
Price to Earnings Growth Ratio
PEG Ratio: CSU is poor value based on its PEG Ratio (5.4x)
Price to Book Ratio
PB vs Industry: CSU is overvalued based on its PB Ratio (29.5x) compared to the CA Software industry average (10.7x).
Future Growth
How is Constellation Software forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?
13.1%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: CSU's forecast earnings growth (13.1% per year) is above the savings rate (1.5%).
Earnings vs Market: CSU's earnings (13.1% per year) are forecast to grow slower than the Canadian market (21.7% per year).
High Growth Earnings: CSU's earnings are forecast to grow, but not significantly.
Revenue vs Market: CSU's revenue (16% per year) is forecast to grow faster than the Canadian market (7.2% per year).
High Growth Revenue: CSU's revenue (16% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: Insufficient data to determine if CSU's Return on Equity is forecast to be high in 3 years time
Past Performance
How has Constellation Software performed over the past 5 years?
17.9%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: CSU has high quality earnings.
Growing Profit Margin: CSU's current net profit margins (11%) are higher than last year (9.5%).
Past Earnings Growth Analysis
Earnings Trend: CSU's earnings have grown by 17.9% per year over the past 5 years.
Accelerating Growth: CSU's earnings growth over the past year (30.9%) exceeds its 5-year average (17.9% per year).
Earnings vs Industry: CSU earnings growth over the past year (30.9%) underperformed the Software industry 37%.
Return on Equity
High ROE: CSU's Return on Equity (41.6%) is considered outstanding.
Financial Health
How is Constellation Software's financial position?
Financial Position Analysis
Short Term Liabilities: CSU's short term assets ($1.6B) do not cover its short term liabilities ($2.0B).
Long Term Liabilities: CSU's short term assets ($1.6B) exceed its long term liabilities ($1.3B).
Debt to Equity History and Analysis
Debt Level: CSU's debt to equity ratio (42.9%) is considered high.
Reducing Debt: CSU's debt to equity ratio has reduced from 105.4% to 42.9% over the past 5 years.
Debt Coverage: CSU's debt is well covered by operating cash flow (263.6%).
Interest Coverage: CSU's interest payments on its debt are well covered by EBIT (16.4x coverage).
Balance Sheet
Dividend
What is Constellation Software current dividend yield, its reliability and sustainability?
0.27%
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: CSU's dividend (0.27%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (1.47%).
High Dividend: CSU's dividend (0.27%) is low compared to the top 25% of dividend payers in the Canadian market (4.73%).
Stability and Growth of Payments
Stable Dividend: CSU is not paying a notable dividend for the Canadian market, therefore no need to check if payments are stable.
Growing Dividend: CSU is not paying a notable dividend for the Canadian market, therefore no need to check if payments are increasing.
Current Payout to Shareholders
Dividend Coverage: CSU is not paying a notable dividend for the Canadian market.
Future Payout to Shareholders
Future Dividend Coverage: No need to calculate the sustainability of CSU's dividend in 3 years as they are not forecast to pay a notable one for the Canadian market.
Next Steps
Management
How experienced are the management team and are they aligned to shareholders interests?
1.6yrs
Average management tenure
CEO
Mark Leonard (64 yo)
no data
Tenure
Mr. Mark Henri Leonard founded Constellation Software Inc. in 1995 and serves as its President. Mr. Leonard worked in the venture capital business for eleven years. He served in the United States and Canad...
CEO Compensation Analysis
Compensation vs Market: Insufficient data to establish whether Mark's total compensation is reasonable compared to companies of similar size in the Canadian market.
Compensation vs Earnings: Mark's compensation has been consistent with company performance over the past year.
Leadership Team
Experienced Management: CSU's management team is not considered experienced ( 1.6 years average tenure), which suggests a new team.
Board Members
Experienced Board: CSU's board of directors are considered experienced (3.1 years average tenure).
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: CSU 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.
Top Shareholders
Company Information
Constellation Software Inc.'s company bio, employee growth, exchange listings and data sources
Key Information
- Name: Constellation Software Inc.
- Ticker: CSU
- Exchange: TSX
- Founded: 1995
- Industry: Application Software
- Sector: Software
- Market Cap: CA$38.881b
- Shares outstanding: 21.19m
- Website: https://www.csisoftware.com
Number of Employees
Location
- Constellation Software Inc.
- 20 Adelaide Street East
- Suite 1200
- Toronto
- Ontario
- M5C 2T6
- Canada
Listings
Biography
Constellation Software Inc., together with its subsidiaries, acquires, builds, and manages vertical market software businesses in the United States, Canada, Italy, Germany, India, United Kingdom, Brazil, S...
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2021/04/09 23:00 |
| End of Day Share Price | 2021/04/09 00:00 |
| Earnings | 2020/12/31 |
| Annual Earnings | 2020/12/31 |
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.