Results: Constellation Software Inc. Beat Earnings Expectations And Analysts Now Have New Forecasts

Investors in Constellation Software Inc. (TSE:CSU) had a good week, as its shares rose 2.8% to close at CA$2,468 following the release of its first-quarter results. Revenues were US$3.2b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$17.32, an impressive 74% ahead of estimates. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Taking into account the latest results, the most recent consensus for Constellation Software from eleven analysts is for revenues of US$13.8b in 2026. If met, it would imply a solid 14% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to leap 66% to US$58.31. Before this earnings report, the analysts had been forecasting revenues of US$13.6b and earnings per share (EPS) of US$50.50 in 2026. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the nice increase in earnings per share expectations following these results.

Check out our latest analysis for Constellation Software

There's been no major changes to the consensus price target of CA$3,954, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Constellation Software analyst has a price target of CA$5,556 per share, while the most pessimistic values it at CA$3,196. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The period to the end of 2026 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 20% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 16% annually. It's clear that while Constellation Software's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Constellation Software following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Constellation Software. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Constellation Software going out to 2028, and you can see them free on our platform here..

Even so, be aware that Constellation Software is showing 2 warning signs in our investment analysis , you should know about...

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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.