Constellation Software Inc.
Constellation Software Inc. Fundamental Analysis
Constellation Software Inc. (CNSWF) shows moderate financial fundamentals with a PE ratio of 61.27, profit margin of 5.92%, and ROE of 20.82%. The company generates $11.1B in annual revenue with strong year-over-year growth of 19.73%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 68.6/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze CNSWF's fundamental strength across five key dimensions:
Efficiency Score
WeakCNSWF struggles to generate sufficient returns from assets.
Valuation Score
WeakCNSWF trades at a premium to fair value.
Growth Score
ExcellentCNSWF delivers strong and consistent growth momentum.
Financial Health Score
ModerateCNSWF shows balanced financial health with some risks.
Profitability Score
ModerateCNSWF maintains healthy but balanced margins.
Key Financial Metrics
Is CNSWF Expensive or Cheap?
P/E Ratio
CNSWF trades at 61.27 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, CNSWF's PEG of 8.34 indicates potential overvaluation.
Price to Book
The market values Constellation Software Inc. at 11.60 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 13.54 times EBITDA. This signals the market has high growth expectations.
How Well Does CNSWF Make Money?
Net Profit Margin
For every $100 in sales, Constellation Software Inc. keeps $5.92 as profit after all expenses.
Operating Margin
Core operations generate 16.05 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $20.82 in profit for every $100 of shareholder equity.
ROA
Constellation Software Inc. generates $4.29 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Constellation Software Inc. produces operating cash flow of $2.52B, showing steady but balanced cash generation.
Free Cash Flow
Constellation Software Inc. generates strong free cash flow of $2.44B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $115.33 in free cash annually.
FCF Yield
CNSWF converts 6.06% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
61.27
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
8.34
vs 25 benchmark
P/B Ratio
Price to book value ratio
11.60
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.63
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.57
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.02
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.21
vs 25 benchmark
ROA
Return on assets percentage
0.04
vs 25 benchmark
ROCE
Return on capital employed
0.18
vs 25 benchmark
How CNSWF Stacks Against Its Sector Peers
| Metric | CNSWF Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 61.27 | 35.87 | Worse (Expensive) |
| ROE | 20.82% | 1175.00% | Weak |
| Net Margin | 5.92% | -136937.00% (disorted) | Weak |
| Debt/Equity | 1.57 | 0.45 | Weak (High Leverage) |
| Current Ratio | 1.02 | 4.81 | Neutral |
| ROA | 4.29% | -312685.00% (disorted) | Weak |
CNSWF outperforms its industry in 0 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Constellation Software Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
188.42%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
119.52%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
164.05%
Industry Style: Growth, Innovation, High Beta
High Growth