Constellation Software (CSU)
Shares of CSU are now down over 43% in the past year after investors reacted to a recent management change and thanks to a general fear of how AI might impact their underlying software-based business. However, this dip is looking like a very good time to get into CSU thanks to its better valuation, strong fundamentals, and it’s stellar earnings projections.
| CSU | |
| Share Price | $2,441.27 |
| Earnings Per Share | $33.69 |
| EPS (Analyst Forward 1yr) | $261.19 |
| EPS (WSX Forward 1yr) | $79.19 |
| Price to Earnings | 72.5 |
| EPS Growth (Projected) | 675.3% |
| PEG | 0.1 |
Potential impact of AI aside, analysts are expecting Constellation Software to improve its EPS from $33.69 TTM to around $261.19 in the next year – a massive 675% increase over where it is today. And despite its high valuation at a 72 PE, such incredibly high EPS growth forecasts give this stock a PEG ratio of just 0.1. The average analyst estimate is a Strong Buy with a +67% one year price estimate.
| WSX Forecasted PE (1 yr) | 39 |
| WSX Forecasted Price (1 yr) | $3,088.41 |
| WSX Forecasted Increase (1 yr) | 27% |
However, instead of 675% we have forecasted their EPS to improve 35% to $79.19 while anticipating a drop in their PE to 39 over the next year. Using our 35% YOY estimate, it changes their PEG to a 2.1 which makes it more in line with peers and the overall market. We have rated CSU a high risk, high reward play because of its volatility, overall market sentiment, and growth forecasts; and we currently rate it a Buy with a 27% one year forecast with a $3,088.41 price prediction for mid 2027.
Topics: CSU stock analysis, CSU price prediction, Constellation Software stock review and price forecast
