Constellation Software Inc

Constellation Software Inc maintains a capital structure with a debt-to-equity ratio of 1.85, indicating a relatively high leverage position. The company's liquidity is assessed as medium, with a current ratio of 0.92, suggesting limited short-term liquidity cushion. Free cash flow of $328 million supports operational flexibility, but net cash is negative after subtracting total debt, signaling potential refinancing or liquidity management needs.

Profitability metrics show a return on equity of 4.5%, which is below the typical performance of software firms, and a return on assets of 0.87%, indicating underutilization of asset base. Operating income of $245 million and a gross profit of $2.32 billion suggest strong gross margin performance, but net income of $104 million reflects high operating expenses or interest costs.

The company's revenue is concentrated in a single business model, with no disclosed geographic or segment breakdown in the provided data. This lack of diversification may expose the company to sector-specific risks.

Looking ahead, the company is expected to maintain a stable growth trajectory, with no specific numeric deltas provided in the outlook. However, historical revenue growth and the company's acquisition strategy suggest a long-term growth orientation.

Risk factors include medium liquidity risk and low dilution potential, with no immediate pressure for equity issuance. The company's high debt load and low net cash position may increase refinancing risk, particularly in a rising interest rate environment.

Recent events include no specific filings or transcripts provided in the input data. Analysts have assigned a mean price target of $4,111.82 and a median of $4,080, with a mean recommendation of 2.08, indicating a generally positive outlook.

Revenue grew at a 22.8% CAGR over four years, demonstrating strong top-line expansion capabilities.

Analysts project 39.9% upside to a mean price target of $4,111.82, signaling strong market confidence.

Cash conversion ratio of 7.09 ranks best-in-class compared to the 0.92 software cohort median.

Operating income surged 34.1% year-over-year, highlighting robust operational leverage and efficiency gains.

Debt-to-equity ratio of 1.85 places the company in the bottom quartile of the software cohort.

High credit risk flags indicate potential vulnerabilities in the company's financial stability or debt management.

Long-term debt increased to $5.3 billion in FY2026, reflecting a substantial and growing leverage burden.

Free cash flow declined 1.2% year-over-year, suggesting weakening cash generation relative to prior periods.

Revenue $3.18B, +17,5% YoY; Operating income +18,9% YoY.

• ▍Revenue $3.18B, +17,5% YoY
• ▍Operating income +18,9% YoY
• ▍Net income −61,3% YoY
• ▍Free cash flow −18,4% YoY
• ▍Net margin 3.5%

Revenue $2.95B, +16,0% YoY; Operating income +26,7% YoY.

• ▍Revenue $2.95B, +16,0% YoY
• ▍Operating income +26,7% YoY
• ▍Net income +28,1% YoY
• ▍Free cash flow +4,3% YoY
• ▍Net margin 7.1%

Revenue $2.84B, +15,2% YoY; Operating income +50,0% YoY.

• ▍Revenue $2.84B, +15,2% YoY
• ▍Operating income +50,0% YoY
• ▍Net income −68,4% YoY
• ▍Free cash flow −16,0% YoY
• ▍Net margin 2.0%

Revenue $2.65B, +12,8% YoY; Operating income +54,7% YoY.

• ▍Revenue $2.65B, +12,8% YoY
• ▍Operating income +54,7% YoY
• ▍Net income +11,5% YoY
• ▍Free cash flow +28,7% YoY
• ▍Net margin 4.4%

Revenue $2.70B; Operating income $445.0M.

• ▍Revenue $2.70B
• ▍Operating income $445.0M
• ▍Net margin 10.5%

Revenue $2.54B; Operating income $386.0M.

• ▍Revenue $2.54B
• ▍Operating income $386.0M
• ▍Net margin 6.5%

Revenue $2.47B; Operating income $310.0M.

• ▍Revenue $2.47B
• ▍Operating income $310.0M
• ▍Net margin 7.2%

Revenue $2.35B; Operating income $245.0M.

• ▍Revenue $2.35B
• ▍Operating income $245.0M
• ▍Net margin 4.4%

Revenue $11.62B, +15,5% YoY; Operating income +34,1% YoY.

• ▍Revenue $11.62B, +15,5% YoY
• ▍Operating income +34,1% YoY
• ▍Net income −29,9% YoY
• ▍Free cash flow −1,2% YoY
• ▍Net margin 4.4%

Revenue $10.07B, +19,7% YoY; Operating income +124,2% YoY.

• ▍Revenue $10.07B, +19,7% YoY
• ▍Operating income +124,2% YoY
• ▍Net income +29,4% YoY
• ▍Free cash flow +94,0% YoY
• ▍Net margin 7.3%

Revenue $8.41B, +27,0% YoY; Operating income −30,5% YoY.

• ▍Revenue $8.41B, +27,0% YoY
• ▍Operating income −30,5% YoY
• ▍Net income +10,2% YoY
• ▍Free cash flow −22,7% YoY
• ▍Net margin 6.7%

Revenue $6.62B, +29,7% YoY; Operating income +56,9% YoY.

• ▍Revenue $6.62B, +29,7% YoY
• ▍Operating income +56,9% YoY
• ▍Net income +65,2% YoY
• ▍Free cash flow +78,3% YoY
• ▍Net margin 7.7%