Constellation Software Inc. (CSU.TO) Buy,…

Constellation Software Inc. (CSU.TO)

3,408.57

+172.51 (5.33%)

as of Oct 22, 2026, 8:00:00 pm Market Closed.

642 watching

BUY

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Comfortable with the most recent results. Revenues missed estimates marginally. Revenue rose 27%. Cash flow was $341M. Acquisitions have slowed down this year. Unlock Premium - Try 5i Free

DON'T BUY

Many tech sector companies trading at extreme valuations. Even well run/profitable companies will be negatively affected by rising interest rates. Company has grown large which makes it hard to grow. Not a good time to buy into the tech sector.

TOP PICK

Fantastic management team. 12-month target $2665. Acquire software startups. Separate business divisions targeting various industries. The beauty of this diversification is that it protects them. ROIC is 32%. Great Canadian story. Yield is 0.23%. (Analysts’ price target is $2441.25)

DON'T BUY

A high-growth stock, but have been excellent at acquiring to build their business. However, today's prices are hard to justify from a valuation standpoint. (He's a value investor.) Their PE is over 100x.

BUY

It is a great stock. His firm tends to buy software stocks on the U.S. side. There is a good opportunity to buy CSU once we get the buyers back.

TOP PICK

Largest position and believes company is very well run. Predictable business with very good capital allocation record. Founder led company. Financial metrics very strong (return on equity, cash flow). Good time to buy with recent selloff.

BUY

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. A steady and historically solid performer. The business model is strong and the management team is good. They reinvest free cash flow into acquiring more businesses to generate free cash flow. Low volatility. Unlock Premium - Try 5i Free

PAST TOP PICK

(A Top Pick Nov 25/20, Up 47%) Still plans for acquisitions. High free cashflow. Still opportunities. Spun off Topicus.com. Many speculate there will be more spinoffs.

HOLD

Fabulous management. Its companies are spread through 6 operating segments. Acquires software startups and holds for the long term. 10-year ROIC of 32%. Money machine. 12-month price target of $2600. Terrific Canadian company.

DON'T BUY

Likes it. A top pick in the past. Has done very well but it is no longer cheap. As expensive as Microsoft. Likes Topicus a lot. Would not chase CSU at these levels.

PAST TOP PICK

(A Top Pick Jul 06/20, Up 35%) Canadians should be really proud of this one. It stacks up with the best. Extremely well run. Founder is still involved. Doesn't spend a lot of money. Not a lot of debt. High and consistent ROIC. Doesn't issue shares. His largest position.

COMMENT

SHOP vs. Constellation Software E-commerce continues to proliferate our economy, and SHOP grows organically. In contrast, CSU is more of a growth-by-acquisition story, buying software companies to grow in size. Therefore, CSU is safer, but SHOP has much better growth prospects. SHOP recently did a deal with Facebook. SHOP and CSU are apples vs. oranges. SHOP has more pricing power in the stock than people think as they gain market share, but he isn't sure about this with CSU. CSU has great managers and acquire well.

BUY ON WEAKNESS

A wonderful software company. They focus on buying smaller companies. They are disciplined and buy a lot of companies and integrate them well. They compound capital very well over time. Loves it. The only caveat is its high valuation. They tend to have lumpy quarters, disappoint shareholders, so that is the moment to swoop in and buy. Because it has bought so many companies, it doesn't offer a dominant software, so it's not vulnerable if something happens to a particular software.

HOLD

Business model is great, scalable, and repeatable. Disciplined process for capital investment. With high tech valuations, he was scared off by the growth by acquisition model, but shouldn't have been. A good long-term hold.

PAST TOP PICK

(A Top Pick Jul 06/20, Up 13%) The best capital-allocating managers in the world anywhere. A Canadian gem. Still holds and likes it.

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Constellation Software Inc. (CSU.TO)