Constellation Software Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

As you might know, Constellation Software Inc. (TSE:CSU) recently reported its full-year numbers. The result was positive overall - although revenues of US$10b were in line with what the analysts predicted, Constellation Software surprised by delivering a statutory profit of US$34.48 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Constellation Software

Taking into account the latest results, the current consensus from Constellation Software's ten analysts is for revenues of US$12.0b in 2025. This would reflect a meaningful 19% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 34% to US$46.31. In the lead-up to this report, the analysts had been modelling revenues of US$12.0b and earnings per share (EPS) of US$47.07 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 5.6% to CA$5,247. It looks as though they previously had some doubts over whether the business would live up to their expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Constellation Software, with the most bullish analyst valuing it at CA$5,752 and the most bearish at CA$3,274 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Constellation Software's past performance and to peers in the same industry. The period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 19% growth on an annualised basis. That is in line with its 22% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 15% per year. So it's pretty clear that Constellation Software is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Constellation Software going out to 2027, and you can see them free on our platform here..

You still need to take note of risks, for example - Constellation Software has 1 warning sign we think you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.