Opinions Jason Del Vicario
Constellation Software Inc.CSU.TOBUYDec 23, 2025
Jason Del VicarioStock price when the opinion was issued
As of May 29, 2026. Market Open.
You might be interested:
He just bought. It buys software businesses, and the price for those is a lot lower than a year ago. Doesn't agree that customers will rip and replace products with AI, especially with no tech support. One of the most interesting risk/reward opportunities today.
Historical valuation was in the 30s; today it's in the teens.
Martin Cobb, ASIP
Mea culpa, not a timely pick. The AI bear was let out of the cage almost immediately after this pick. Still holds because his firm just doesn't believe AI will totally disrupt these vertical-market software firms.
Brian MaddenDemise of software is a narrative right now, but no evidence in the fundamentals. Not all of its business units will be displaced by AI, and some will actually benefit. Tends to buy companies at low multiples and earn back its money in short order.
He continues to add. Everything that could go wrong did last year. Nothing wrong with fundamentals.
Barry SchwartzLooking at the chart, he exited his remaining position at the plateau at $3500. Technically, it has to get back to that and that's $900 away (a lot of water under that bridge).
Tough over next 6 months. Need a couple of quarters under new leadership. Still expensive at 74x PE. Business model needs to do bigger deals, which means more risk; though a lot of software stocks are on sale (but for good reason).
The dip now is a phenomenal opportunity. Metrics haven't been this low in a decade. LLM's like Anthropic are chasing big companies like CSU, which will help LLM's customers to integrate with their product. The moat around CSU is misunderstood.
(Analysts’ price target is $4116.08)
Chris BlumasVertical software segments such as transit system scheduling or golf course management. Obvious fears of AI, and there is some legitimacy there. Its advantage is that it’s had to resolve all these “edge” issues over the years -- all the little exceptions to the rules that crop up. A new company would have to start from scratch on that front.
New strategy of acquiring smaller stakes in larger companies -- acts as a defence against AI. Trades at 15x forward PE, cheapest in 13 years. Yield is 0.23%.
Never owned it due to high PE and they grow by acquisition, whereas she wants to see some organic growth in a company. Are concerns after the CEO resigned, and now there are AI concerns, since they buy software companies. To maintain their growth rate, they have to buy larger and larger companies.
It has changed its business model from its storied days. It used to buy small software companies in the $5 to $7 million range, but has changed to bigger companies and getting more competition with other bidders and which are taking longer to play out. It more recently started buying public companies. Their selection is more limited and it is buying companies that other companies are often interested in. It is time to move on to something else since there is not the same rate of return. However it has had a tremendous run and is one of the most successful stocks on the TSX.
Probably one of the highest compounding rates of return over last 15 years. AI concerns are probably overdone. Earnings reported today continue to be strong. Acquisition targets now much cheaper.
Before buying, he'd want to see the price stabilize and more positive technical metrics. Value investors can start building a position.
Was spun-out from Constellation Software, which he owns. He sold TOI to buy more Constellation, which owns large stakes of TOI anyway. He wanted to keep things simple. His kids own TOI, which trades at $120 vs. $3,300 for Constellation, so TOI is more accessible to investors. Also, it's easier to grow the smaller TOI than Constellation through acquisitions. Both are great businesses to own. Shares of both are down a lot now on fears that AI will replace software. (He doesn't know either way.)