TSX:CSU

Stock Analysis Report

Constellation Software

Executive Summary

Constellation Software Inc., together with its subsidiaries, engages in the development, installation, and customization of software to various markets in the United States, Canada, the United Kingdom, Europe, and internationally.

Snowflake

Fundamentals

Outstanding 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


Market Performance


7 Day Return

-0.4%

CSU

0.8%

CA Software

-0.3%

CA Market


1 Year Return

52.2%

CSU

22.4%

CA Software

0.9%

CA Market

Return vs Industry: CSU exceeded the Canadian Software industry which returned 22.4% over the past year.

Return vs Market: CSU exceeded the Canadian Market which returned 0.9% over the past year.


Share holder returns

CSUIndustryMarket
7 Day-0.4%0.8%-0.3%
30 Day3.3%-2.3%-2.1%
90 Day7.1%1.7%-1.5%
1 Year56.7%52.2%24.3%22.4%4.4%0.9%
3 Year137.6%127.7%77.1%72.9%15.7%5.4%
5 Year402.4%371.3%163.0%155.6%26.1%7.9%

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

Valuation

Is Constellation Software undervalued based on future cash flows and its price relative to the stock market?

53x

Price to Earnings (PE) ratio


Intrinsic Value Based on Future Cash Flows

Undervalued: CSU (CA$1331.99) is trading above our estimate of fair value (CA$1128.05)

Significantly Undervalued: CSU is trading above our estimate of fair value.


Price Based on Earnings

PE vs Industry: CSU is poor value based on its PE Ratio (53x) compared to the Software industry average (25.3x).

PE vs Market: CSU is poor value based on its PE Ratio (53x) compared to the Canadian market (13.7x).


Price Based on Expected Growth

Low PEG Ratio: CSU's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price Based on Value of Assets

PB vs Industry: CSU is overvalued based on its PB Ratio (38x) compared to the CA Software industry average (2.5x).


Next Steps

Future Growth

How is Constellation Software expected to perform in the next 1 to 3 years based on estimates from 8 analysts?

-2.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Earnings vs Savings Rate: CSU's earnings are forecast to decline over the next 3 years (-2% per year).

Earnings vs Market: CSU's earnings are forecast to decline over the next 3 years (-2% per year).

High Growth Earnings: CSU's earnings are forecast to decline over the next 3 years.

Revenue vs Market: CSU's revenue (14.2% per year) is forecast to grow faster than the Canadian market (5.7% per year).

High Growth Revenue: CSU's revenue (14.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Estimates


Future Return on Equity

High Future ROE: Insufficient data to determine if CSU's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Constellation Software performed over the past 5 years?

25.6%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: CSU's earnings have grown significantly by 25.6% per year over the past 5 years.

Accelerating Growth: CSU's earnings growth over the past year (52.4%) exceeds its 5-year average (25.6% per year).

Earnings vs Industry: CSU earnings growth over the past year (52.4%) exceeded the Software industry 23.6%.


Return on Equity

High ROE: CSU's Return on Equity (71.7%) is considered outstanding.


Return on Assets

ROA vs Industry: CSU has a higher Return on Assets than the Software industry average last year.


Return on Capital Employed

ROCE Improving: CSU has improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Constellation Software's financial position?


Financial Position Analysis

Short Term Liabilities: CSU's short term assets ($915.0M) do not cover its short term liabilities ($1.5B)

Long Term Liabilities: CSU's short term assets (915.0M) exceeds its long term liabilities (913.0M)


Debt to Equity History and Analysis

Debt Level: CSU's debt to equity ratio (60.1%) is considered high

Reducing Debt: CSU's debt to equity ratio has reduced from 170.9% to 60.1% over the past 5 years.

Debt Coverage: CSU's debt is well covered by operating cash flow (202.1%).

Interest Coverage: CSU's interest payments on its debt are well covered by EBIT (18x coverage).


Balance Sheet

Inventory Level: CSU has a low level of unsold assets or inventory.

Debt Coverage by Assets: CSU's debt is covered by short term assets (assets are 2.699110x debt).


Next Steps

Dividend

What is Constellation Software's current dividend yield, its reliability and sustainability?

0.40%

Current Dividend Yield


Dividend Yield vs Market

company0.4%marketbottom25%2.0%markettop25%6.0%industryaverage1.4%forecastin3Yearsn/a

Current dividend yield vs market & industry


Dividend Yield and Payments Analysis

Notable Dividend: CSU's dividend (0.4%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (2.03%).

High Dividend: CSU's dividend (0.4%) is low compared to the top 25% of dividend payers in the Canadian market (5.98%).

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 .


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

What is the CEO of Constellation Software's salary, the management and board of directors tenure and is there insider trading?

6.6yrs

Average management tenure


CEO

Mark Leonard (63yo)

0yrs

Tenure

US$1

Compensation

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: Mark's total compensation ($USD0.00) is too low to compare against companies of similar size in the Canadian market ($USD6.89M).

Compensation vs Earnings: Mark's compensation has been consistent with company performance over the past year.


Management Age and Tenure

6.6yrs

Average Tenure

Experienced Management: CSU's management team is seasoned and experienced (6.6 years average tenure).


Board Age and Tenure

5.6yrs

Average Tenure

59.5yo

Average Age

Experienced Board: CSU's board of directors are considered experienced (5.6 years average tenure).


Insider Trading

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


Recent Insider Transactions

SellUS$130,30024 Sep 19
Mark Leonard
EntityIndividual
Role
Chief Executive Officer
Founder
Shares100
Max PriceUS$1,303.00
SellUS$126,49212 Sep 19
Mark Leonard
EntityIndividual
Role
Chief Executive Officer
Founder
Shares100
Max PriceUS$1,264.92
SellUS$302,86909 Sep 19
Jamal Baksh
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares230
Max PriceUS$1,316.82
SellUS$1,313,93206 Sep 19
Barry Symons
EntityIndividual
Role
Unit CEO
Chief Executive Officer of Jonas Operating Group
Shares1,000
Max PriceUS$1,315.19
SellUS$1,616,83222 May 19
Mark Dennison
EntityIndividual
Role
Chief Legal Officer
General Counsel & Secretary
Shares1,344
Max PriceUS$1,203.00
SellUS$2,335,00008 May 19
John Billowits
EntityIndividual
Role
Unit CEO
Chief Executive Officer of Vela Operating Group
Shares2,000
Max PriceUS$1,167.50
SellUS$1,339,87325 Jan 19
Stephen Scotchmer
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares1,450
Max PriceUS$924.05
BuyUS$1,339,87325 Jan 19
Stephen Scotchmer
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares1,450
Max PriceUS$924.05
SellUS$6,394,16310 Dec 18
Stephen Scotchmer
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares6,889
Max PriceUS$928.17
BuyUS$6,394,16310 Dec 18
Stephen Scotchmer
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares6,889
Max PriceUS$928.17
SellUS$819,10823 Nov 18
Jamal Baksh
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares900
Max PriceUS$910.12
SellUS$439,27019 Nov 18
Mark Dennison
EntityIndividual
Role
Chief Legal Officer
General Counsel & Secretary
Shares500
Max PriceUS$878.54

Ownership Breakdown


Management Team

  • Mark Leonard (63yo)

    Founder

    • Tenure: 0yrs
    • Compensation: US$1.00
  • Barry Symons

    Chief Executive Officer of Jonas Operating Group

    • Tenure: 12.2yrs
    • Compensation: US$1.10m
  • Bernard Anzarouth

    Chief Investment Officer

    • Tenure: 0yrs
  • Dexter Salna

    President of Perseus Operating Group & Director

    • Tenure: 0.08yrs
    • Compensation: US$1.72m
  • Mark Dennison

    General Counsel & Secretary

    • Tenure: 0yrs
  • Mark Miller

    COO & Director

    • Tenure: 6.6yrs
    • Compensation: US$1.85m
  • John Billowits (47yo)

    Chief Executive Officer of Vela Operating Group

    • Tenure: 6.6yrs
    • Compensation: US$2.61m
  • Jamal Baksh

    Chief Financial Officer

    • Tenure: 6.6yrs
    • Compensation: US$756.98k
  • Robin van Poelje

    Director

    • Tenure: 1.7yrs

Board Members

  • Mark Leonard (63yo)

    Founder

    • Tenure: 0yrs
    • Compensation: US$1.00
  • Dexter Salna

    President of Perseus Operating Group & Director

    • Tenure: 0.08yrs
    • Compensation: US$1.72m
  • Paul McFeeters (64yo)

    Independent Director

    • Tenure: 5yrs
    • Compensation: US$80.00k
  • Mark Miller

    COO & Director

    • Tenure: 6.6yrs
    • Compensation: US$1.85m
  • Jeff Bender

    Director

    • Tenure: 6.6yrs
    • Compensation: US$1.81m
  • Rob Kittel (47yo)

    Independent Director

    • Tenure: 6.3yrs
    • Compensation: US$100.00k
  • Steve Scotchmer

    Lead Independent Director

    • Tenure: 0yrs
    • Compensation: US$80.00k
  • Sam Hayes

    Independent Director

    • Tenure: 6.8yrs
    • Compensation: US$80.00k
  • Robin van Poelje

    Director

    • Tenure: 1.7yrs
  • Larry Cunningham (56yo)

    Independent Vice Chairman of the Board

    • Tenure: 0.6yrs
    • Compensation: US$60.00k

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$28.227b
  • 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

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CSUTSX (The Toronto Stock Exchange)YesCommon SharesCACADMay 2006
CNSW.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDMay 2006
W9CDB (Deutsche Boerse AG)YesCommon SharesDEEURMay 2006

Biography

Constellation Software Inc., together with its subsidiaries, engages in the development, installation, and customization of software to various markets in the United States, Canada, the United Kingdom, Eur ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/14 01:52
End of Day Share Price2019/10/11 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.

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