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

2.2%

TSX:CSU

2.0%

CA Software

1.6%

CA Market


1 Year Return

36.6%

TSX:CSU

15.6%

CA Software

-0.3%

CA Market

CSU outperformed the Software industry which returned 17.1% over the past year.

CSU outperformed the Market in Canada which returned -0.5% over the past year.


Share holder returns

CSUIndustryMarket
7 Day2.2%2.0%1.6%
30 Day2.7%2.5%4.1%
90 Day5.3%1.7%1.1%
1 Year40.6%36.6%17.5%15.6%3.3%-0.3%
3 Year129.9%120.3%78.6%74.3%19.3%8.6%
5 Year407.5%376.2%167.1%159.8%21.6%4.1%

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?

50.96x

Price to Earnings (PE) ratio


Intrinsic Value Based on Future Cash Flows

Constellation Software's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).

Constellation Software's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).


Price Based on Earnings

Constellation Software is overvalued based on earnings compared to the CA Software industry average.

Constellation Software is overvalued based on earnings compared to the Canada market.


Price Based on Expected Growth

Constellation Software is poor value based on expected growth next year.


Price Based on Value of Assets

Constellation Software is overvalued based on assets compared to the CA Software industry average.


Next Steps

Future Growth

How is Constellation Software expected to perform in the next 1 to 3 years based on estimates from 7 analysts?

8.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Constellation Software's revenue is expected to grow by 14.9% yearly, however this is not considered high growth (20% yearly).

Constellation Software's earnings are expected to grow by 8.2% yearly, however this is not considered high growth (20% yearly).

Constellation Software's revenue growth is expected to exceed the Canada market average.

Constellation Software's earnings growth is positive but not above the Canada market average.

Constellation Software's earnings growth is expected to exceed the low risk savings rate of 1.9%.


Earnings per Share Growth Estimates


Future Return on Equity

Unable to establish if Constellation Software will efficiently use shareholders’ funds in the future without estimates of Return on Equity.


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

Constellation Software has delivered over 20% year on year earnings growth in the past 5 years.

Constellation Software's 1-year earnings growth exceeds its 5-year average (52.4% vs 25.6%)

Constellation Software's earnings growth has exceeded the CA Software industry average in the past year (52.4% vs 28.5%).


Return on Equity

Constellation Software made outstanding use of shareholders’ funds last year (Return on Equity greater than 40%).


Return on Assets

Constellation Software used its assets more efficiently than the CA Software industry average last year based on Return on Assets.


Return on Capital Employed

Constellation Software has improved its use of capital last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is Constellation Software's financial position?


Financial Position Analysis

Constellation Software's short term (1 year) commitments are greater than its holdings of cash and other short term assets.

Constellation Software's cash and other short term assets cover its long term commitments.


Debt to Equity History and Analysis

Constellation Software's level of debt (60.1%) compared to net worth is high (greater than 40%).

The level of debt compared to net worth has been reduced over the past 5 years (170.9% vs 60.1% today).

Debt is well covered by operating cash flow (202.1%, greater than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 18x coverage).


Balance Sheet

Low level of unsold assets.

Debt is covered by short term assets, assets are 2.7x debt.


Next Steps

Dividend

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

0.41%

Current Dividend Yield


Dividend Yield and Payments Analysis

Constellation Software's pays a lower dividend yield than the bottom 25% of dividend payers in Canada (1.99%).

Constellation Software's dividend is below the markets top 25% of dividend payers in Canada (5.8%).

Constellation Software is not paying a notable dividend for Canada, therefore no need to check if the payments are stable.

Constellation Software is not paying a notable dividend for Canada, therefore no need to check if the payments are increasing.


Current Payout to Shareholders

No need to calculate the sustainability of Constellation Software's dividends as it is not paying a notable one for Canada.


Future Payout to Shareholders

Insufficient estimate data to determine if a dividend will be paid in 3 years and that it will be sustainable.


Next Steps

Management

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

6.5yrs

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

Insufficient data for Mark to establish whether their remuneration is reasonable compared to companies of similar size in Canada.

Mark's compensation has been consistent with company performance over the past year, both up more than 20%.


Management Age and Tenure

6.5yrs

Average Tenure

The average tenure for the Constellation Software management team is over 5 years, this suggests they are a seasoned and experienced team.


Board Age and Tenure

5.5yrs

Average Tenure

59.5yo

Average Age

The tenure for the Constellation Software board of directors is about average.


Insider Trading

Constellation Software individual insiders have only sold shares in the past 3 months.


Recent Insider Transactions

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
BuyUS$6,394,16310 Dec 18
Stephen Scotchmer
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares6,889
Max PriceUS$928.17
SellUS$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: 12.1yrs
    • Compensation: US$1.10m
  • Bernard Anzarouth

    Chief Investment Officer

    • Tenure: 0yrs
  • Dexter Salna

    President of Perseus Operating Group

    • Tenure: 0yrs
    • Compensation: US$1.72m
  • Mark Dennison

    General Counsel & Secretary

    • Tenure: 0yrs
  • Mark Miller

    COO & Director

    • Tenure: 6.5yrs
    • Compensation: US$1.85m
  • John Billowits (47yo)

    Chief Executive Officer of Vela Operating Group

    • Tenure: 6.5yrs
    • Compensation: US$2.61m
  • Jamal Baksh

    Chief Financial Officer

    • Tenure: 6.5yrs
    • Compensation: US$756.98k
  • Robin van Poelje

    Director

    • Tenure: 1.6yrs

Board Members

  • Mark Leonard (63yo)

    Founder

    • Tenure: 0yrs
    • Compensation: US$1.00
  • Paul McFeeters (64yo)

    Independent Director

    • Tenure: 4.9yrs
    • Compensation: US$80.00k
  • Mark Miller

    COO & Director

    • Tenure: 6.5yrs
    • Compensation: US$1.85m
  • Jeff Bender

    Director

    • Tenure: 6.5yrs
    • Compensation: US$1.81m
  • Rob Kittel (47yo)

    Independent Director

    • Tenure: 6.2yrs
    • Compensation: US$100.00k
  • Steve Scotchmer

    Lead Independent Director

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

    Independent Director

    • Tenure: 6.7yrs
    • Compensation: US$80.00k
  • Lori O’Neill

    Director

    • Tenure: 1.5yrs
    • Compensation: US$50.00k
  • Robin van Poelje

    Director

    • Tenure: 1.6yrs
  • Larry Cunningham (56yo)

    Vice Chairman of the Board

    • Tenure: 0.5yrs
    • 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$27.309b
  • 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 Analysis2019/09/17 23:54
End of Day Share Price2019/09/17 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.