Constellation Software Inc. (CSU.TO) | Investment Case

1. Company Snapshot

1.a. Company Description

Constellation Software Inc., together with its subsidiaries, acquires, builds, and manages vertical market software businesses in Canada, the United States, the United Kingdom, and rest of Europe.Its industry specific software businesses provide specialized and mission-critical software solutions.The company serves public and private sector markets.

Constellation Software Inc.was incorporated in 1995 and is headquartered in Toronto, Canada.

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1.b. Last Insights on CSU

Constellation Software's recent performance was driven by strong full-year 2024 earnings, with EPS beating expectations. Revenue reached $10.1 billion, a 20% increase from the previous year. The company also declared a $1.00 per share dividend, payable on April 15, 2025. Additionally, the acquisition of treasury shares by Topicus.com Inc. and Constellation Software's partnership with Topicus.com Inc. are positive developments. The company's strong financial performance and dividend declaration likely contributed to its recent success.

1.c. Company Highlights

Last Price	3322.3
Change Percentage	0.37%
Open	3342.63
Previous Close	3309.98
Market Cap ( Millions)	70405
Volume	10760
Year High	5300
Year Low	3155.6
M A 50	3585.77
M A 200	4459.26

FCF Yield	4.92%
Dividend Yield	0.17%
ROE	21.78%
Debt / Equity	156.85%
Net Debt / EBIDTA	113.95%
Price To Book	14.66
Price Earnings Ratio	74.03
Price To FCF	20.33
Price To sales	4.56
EV / EBITDA	22.84

2. Transcript Summary

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3. NewsRoom

TSX Value Stocks Estimated To Be Trading Below Intrinsic Worth October 2025

Oct -14

Source:

Constellation Software Up 1.3% as Its MAJIQ unit Launches Ether Product for Pulp and Paper Companies

Oct -08

Source:

MAJIQ Unveils Ether: A Next-Gen, Small-Footprint MES

Oct -08

Source:

Constellation Software Sector Perform Rating, C$4,500 Price Target, Confirmed at National Bank of Canada

Oct -02

Source:

Is Constellation Software Inc. (TSE:CSU) Trading At A 24% Discount?

Oct -01

Source:

Volaris Group Acquires AskCody, Expanding Portfolio in Workplace and Meeting Management Solutions

Oct -01

Source:

Joint Press Release of Constellation Software Inc. and Topicus.com Inc.

Oct -01

Source:

Joint Press Release of Constellation Software Inc. and Topicus.com Inc. — Topicus.com Inc. completes Agreement to acquire 14.84% of Treasury Shares in the capital of Asseco Poland S.A.

Oct -01

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.90%)

6. Segments

Software & Programming

Expected Growth: 10.9%

Constellation Software's growth is driven by increasing demand for industry-specific software solutions, strategic acquisitions, and a strong track record of organic growth.

7. Detailed Products

Vela Operations

Vela Operations provides software solutions for the public sector, including case management, licensing, and permitting.

Harris ERP

Harris ERP offers enterprise resource planning software for the public sector, including financial management, human resources, and procurement.

Jonas Construction Software

Jonas Construction Software provides ERP solutions for the construction industry, including project management, accounting, and service management.

GHG Corporation

GHG Corporation offers software solutions for the healthcare industry, including practice management, billing, and electronic health records.

Volaris Group

Volaris Group provides software solutions for the communications industry, including billing, customer management, and network management.

Perseus Operating Group

Perseus Operating Group offers software solutions for the hospitality industry, including property management, point-of-sale, and revenue management.

8. Constellation Software Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Constellation Software Inc. operates in a niche market with specialized software solutions, making it difficult for substitutes to emerge.

Bargaining Power Of Customers

While customers have some bargaining power due to the availability of alternative software solutions, Constellation Software Inc.'s strong brand reputation and customer loyalty mitigate this power.

Bargaining Power Of Suppliers

Constellation Software Inc. has a diversified supplier base, reducing dependence on individual suppliers and minimizing their bargaining power.

Threat Of New Entrants

While there are barriers to entry in the software industry, new entrants can still emerge, especially with the rise of cloud-based solutions and open-source software.

Intensity Of Rivalry

The software industry is highly competitive, with many established players and new entrants vying for market share, leading to intense rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	66.25%
Debt Cost	7.94%
Equity Weight	33.75%
Equity Cost	7.94%
WACC	7.94%
Leverage	196.27%

11. Quality Control: Constellation Software Inc. passed 5 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Intuit

A-Score: 5.5/10

Value: 1.2

Growth: 8.2

Quality: 8.6

Yield: 1.0

Momentum: 6.5

Volatility: 7.7

1-Year Total Return ->

Salesforce

A-Score: 5.0/10

Value: 2.2

Growth: 8.9

Quality: 8.4

Yield: 1.0

Momentum: 2.5

Volatility: 7.0

1-Year Total Return ->

Cadence Design Systems

A-Score: 4.9/10

Value: 0.0

Growth: 7.3

Quality: 8.4

Yield: 0.0

Momentum: 8.0

Volatility: 5.7

1-Year Total Return ->

ServiceNow

A-Score: 4.6/10

Value: 0.0

Growth: 9.1

Quality: 8.0

Yield: 0.0

Momentum: 4.0

Volatility: 6.3

1-Year Total Return ->

Constellation Software

A-Score: 4.4/10

Value: 1.2

Growth: 8.8

Quality: 6.1

Yield: 0.0

Momentum: 3.0

Volatility: 7.3

1-Year Total Return ->

FICO

A-Score: 4.0/10

Value: 2.0

Growth: 8.1

Quality: 7.6

Yield: 0.0

Momentum: 2.0

Volatility: 4.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

10.32%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

7.94%

Constellation Software Inc. - CA21037X1006

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on CSU

1.c. Company Highlights

Less Volatile

Expensive

Higher Growth

Earnings Miss

Revenues Beats

Strong Momentum

Revenues Miss

Earnings Beats

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.90%)

6. Segments

Software & Programming

Expected Growth: 10.9%

7. Detailed Products

Vela Operations

Harris ERP

Jonas Construction Software

GHG Corporation

Volaris Group

Perseus Operating Group

8. Constellation Software Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Constellation Software Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

3322.3$

Current Price

3322.3$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA