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Constellation Software, Inc.

  • Market Cap: Large Cap
  • Industry: Software Products
  • ISIN: CA21037X1006
  • TSE: CSU
CAD
2,770.26
-16.71 (-0.6%)

Sep 22

TSE

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  • Price Points
  • Score
  • Mojo Parameters
  • Total Return
  • News and Corporate Actions
  • Key factors
  • Shareholding
  • Financials
  • CompanyCV
stock-recommendationScore
Click here to find our call on this stock
Strong Sell
Sell
Hold
Buy
Strong Buy

Comparison

Company
Score
Quality
Valuation
Financial
Technical
Open Text Corp.
The Descartes Systems Group, Inc.
Enghouse Systems Ltd.
Constellation Software, Inc.
BlackBerry Ltd.
Kinaxis, Inc.
Lumine Group, Inc.
Topicus.com, Inc.
Lightspeed Commerce, Inc.
Dye & Durham Ltd.
Docebo, Inc.

Why is Constellation Software, Inc. ?

1
Strong Long Term Fundamental Strength with an average Return on Capital Employed (ROCE) of 40.20%
  • Healthy long term growth as Net Sales has grown by an annual rate of 24.89% and Operating profit at 22.78%
  • Company's ability to service its debt is strong with a healthy EBIT to Interest (avg) ratio of 9.15
2
The company has declared Positive results for the last 5 consecutive quarters
  • OPERATING CASH FLOW(Y) Highest at CAD 3,809.32 MM
  • DEBT-EQUITY RATIO (HY) Lowest at 71.05 %
  • NET PROFIT(Q) Highest at CAD 435.58 MM
3
With ROE of 25.35%, it has a very expensive valuation with a 11.22 Price to Book Value
  • The stock is trading at a premium compared to its peers' average historical valuations
  • Over the past year, while the stock has generated a return of -34.30%, its profits have risen by 2.8% ; the PEG ratio of the company is 15.7
4
Majority shareholders : FIIs
5
Underperformed the market in the last 1 year
  • Even though the market (S&P/TSX 60) has generated returns of 30.16% in the last 1 year, the stock has hugely underperformed and has generate negative returns of -34.30% returns
stock-recommendationReal-Time Research Report

Verdict Report

How much should you hold?

  1. Overall Portfolio exposure to Constellation Software, Inc. should be less than 10%
  2. Overall Portfolio exposure to Software Products should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Software Products)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Constellation Software, Inc. for you?

High Risk, High Return

Absolute
Risk Adjusted
Volatility
Constellation Software, Inc.
-34.05%
4.44
46.95%
S&P/TSX 60
20.36%
2.51
12.02%
stock-recommendationQuality
stock-summaryManagement Risk
stock-summaryGrowth
stock-summaryCapital Structure
stock-recommendation
Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor
Value
Sales Growth (5y)
24.89%
EBIT Growth (5y)
22.78%
EBIT to Interest (avg)
6.98
Debt to EBITDA (avg)
0.87
Net Debt to Equity (avg)
0.65
Sales to Capital Employed (avg)
1.34
Tax Ratio
18.63%
Dividend Payout Ratio
16.46%
Pledged Shares
0
Institutional Holding
0.10%
ROCE (avg)
29.09%
ROE (avg)
40.38%
stock-recommendationValuation

Valuation Scorecard stock-summary

stock-recommendation
Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors stock-summary

Factor
Value
P/E Ratio
44
Industry P/E
Price to Book Value
11.22
EV to EBIT
23.48
EV to EBITDA
13.54
EV to Capital Employed
7.46
EV to Sales
3.81
PEG Ratio
15.72
Dividend Yield
NA
ROCE (Latest)
31.77%
ROE (Latest)
25.35%
stock-recommendationTechnicals

Technical key factors

Indicator
Weekly
Monthly
MACD
Mildly Bullish
Bearish
RSI
No Signal
Bullish
Bollinger Bands
Bearish
Bearish
Moving Averages
Bearish (Daily)
KST
Mildly Bullish
Bearish
Dow Theory
No Trend
No Trend
OBV
No Trend
No Trend
stock-recommendation Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish  Turned 
Technical Movement
Analyse All Technical Factors stock-recommendation
stock-recommendationFinancial Trend

Financial Trend Scorecard stock-summary

stock-recommendation
Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

17What is working for the Company
OPERATING CASH FLOW(Y)

Highest at CAD 3,809.32 MM

DEBT-EQUITY RATIO (HY)

Lowest at 71.05 %

NET PROFIT(Q)

Highest at CAD 435.58 MM

CASH AND EQV(HY)

Highest at CAD 8,307.82 MM

DIVIDEND PER SHARE(HY)

Highest at CAD 5.54

NET SALES(Q)

Highest at CAD 4,616.92 MM

-1What is not working for the Company
DIVIDEND PAYOUT RATIO(Y)

Lowest at 7.92%

Here's what is working for Constellation Software, Inc.

Operating Cash Flow
Highest at CAD 3,809.32 MM and Grown
In each year in the last three years
MOJO Watch
The company has generated higher cash revenues from business operations

Operating Cash Flows (CAD MM)

Net Profit
Highest at CAD 435.58 MM and Grown
In each period in the last five periods
MOJO Watch
Near term Net Profit trend is very positive

Net Profit (CAD MM)

Net Profit
At CAD 435.58 MM has Grown at 151.17%
Year on Year (YoY)
MOJO Watch
Near term Net Profit trend is very positive

Net Profit (CAD MM)

Debt-Equity Ratio
Lowest at 71.05 % and Grown
In each half year in the last five Semi-Annual periods
MOJO Watch
The company has been reducing its borrowing as compared to equity capital

Debt-Equity Ratio

Net Sales
Highest at CAD 4,616.92 MM
in the last five periods
MOJO Watch
Near term sales trend is positive

Net Sales (CAD MM)

Cash and Eqv
Highest at CAD 8,307.82 MM
in the last six Semi-Annual periods
MOJO Watch
Short Term liquidity is improving

Cash and Cash Equivalents

Dividend per share
Highest at CAD 5.54
in the last five years
MOJO Watch
Company is distributing higher dividend from profits generated

DPS (CAD)

Depreciation
Highest at CAD 559.29 MM
in the last five periods
MOJO Watch
The expenditure on assets done by the company may have gone into operation

Depreciation (CAD MM)

Here's what is not working for Constellation Software, Inc.

Dividend Payout Ratio
Lowest at 7.92%
in the last five years
MOJO Watch
Company is distributing lower proportion of profits generated as dividend

DPR (%)

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