Constellation Software

CSU.TO

Software - Application · Technology

Also trades as: CNSWF

Price

C$3041.21

-34.68 (-1.13%)

Market Cap

C$64.45B

Exchange

Toronto Stock Exchange

Winston Score

Winston is curious

A decent business — some strong pillars, some weaker.

Data as of Aug 23, 2026 · filings through Jun 30, 2026

How the score breaks down

Quality

Good

Growth

Strong

Cash Flow

Exceptional

Stability

Good

Valuation

Good

Dividends

Weak

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Winston Score History

The full picture

Constellation Software is a Canadian technology company that buys and operates small software businesses. These businesses make specialized software for specific industries — like public transit systems, golf courses, libraries, and local governments. Constellation owns hundreds of these niche software brands and serves customers across dozens of vertical markets.

The company makes money by collecting recurring software licenses and maintenance fees from its customers, who tend to stay for a long time because switching software is costly and disruptive. Constellation operates mainly in North America and Europe and has a market cap of around $59 billion, making it one of Canada's largest technology companies. Its main competitive advantage is its disciplined process for acquiring and improving small, sticky software businesses — but the key risk is that as Constellation grows larger, finding enough attractive acquisition targets at reasonable prices becomes increasingly difficult.

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+14.2% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

+377.3% YoY

YoY Growth Rate

EPS growth accelerating

R&D Spend

$1.7B/ year

↓ Declining (-21% vs prior year)

14.4% of revenue

In line with sector average (15%)

R&D spend declining — could signal cost-cutting or efficiency

Insider Activity

6.6%ownership

→ Flat

Insider ownership roughly steady over the past year

Cash Position

Cash flow positive

$3.5B cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth + cash flow

Constellation Software is a rare growth stock that's already generating positive cash flow while growing at 14%. The Winston Score doesn't fully credit this transition from "burner" to "earner."

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Share count broadly stable

0.0% over 4y

The share count has stayed roughly flat over this period — little dilution or buyback activity.

Diluted shares outstanding: 21.2M (2021) → 21.2M (2025)

Score breakdown

Every number that matters to educated investors.

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Quality

Profit per sale

Gross Margin

25.1%

Modest — 25.1% gross margin

Profit after running costs

Operating Margin

15.1%

Healthy — 15.1% operating margin

Return on the money invested

ROCE

21.2%

Exceptional — 21.2% return on capital

ROIC between 15% and 25%. Every dollar invested in the business earns 15 to 25 cents back per year.

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Growth

Sales growth

Sales YoY

+16.8%

Fast-growing sales (+16.8% YoY)

Profit growth

EPS YoY

+48.1%

Earnings growing fast (+48.1% YoY)

Earnings growing 25%+ a year. The compounder zone.

How steady the profit is

EPS Consistency

5/8 quarters

Mixed — about half the quarters showed growth

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Cash Flow

Profit that turns into cash

Cash Conversion

294%

Turns 294% of profit into real cash

Spare cash per sale

FCF Margin

21.6%

Converts sales into free cash efficiently (21.6%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

What it owes vs what it owns

Debt / Equity

1.34

Elevated debt (1.34)

Covers its interest

Interest Cover

6.66x

Adequate interest coverage (6.7x)

Interest coverage between 3 and 8. Profits cover interest several times over.

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Valuation

Price vs profit

P/E Ratio (TTM)

49.3x

Expensive — P/E 49.3

P/E over 35. The market is pricing in heavy, sustained growth.

Cheaper or dearer next year

P/E vs Forward

+29.9

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (49.3 → 19.5)

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Dividends

Dividend

Dividend Yield

0.17%

Small dividend — 0.17% yield

Modest yield. The bulk of any return needs to come from price appreciation.

Dividend record

Dividend Growth

-0.6%

Dividend cut (-0.6% YoY) — warning sign

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