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Is Constellation Software Inc. (TSE:CSU) Potentially Underrated?

Austin Wood

I’ve been keeping an eye on Constellation Software Inc. (TSE:CSU) because I’m attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe CSU has a lot to offer. Basically, it is a company with great financial health as well as a a great history of performance. Below, I’ve touched on some key aspects you should know on a high level. For those interested in digger a bit deeper into my commentary, take a look at the report on Constellation Software here.

Outstanding track record with adequate balance sheet

In the previous year, CSU has ramped up its bottom line by 31%, with its latest earnings level surpassing its average level over the last five years. This illustrates a strong track record, leading to a satisfying return on equity of 39%. which is an notable feat for the company. CSU appears to have made good use of debt, producing operating cash levels of 1.54x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated. Debt funding requires timely payments on interest to lenders. CSU’s earnings sufficiently covered its interest in the prior year, which indicates there’s low risk associated with the company not being able to meet these key expenses.

TSX:CSU Income Statement Export December 20th 18

Next Steps:

For Constellation Software, I’ve put together three pertinent factors you should further research:

  1. Future Outlook: What are well-informed industry analysts predicting for CSU’s future growth? Take a look at our free research report of analyst consensus for CSU’s outlook.
  2. Valuation: What is CSU worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether CSU is currently mispriced by the market.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of CSU? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.