Research Alert: CFRA Maintains Hold Rating On Shares Of Constellation Software Inc.
CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:We trim our target price to CAD2,692 from CAD3,233, based on a P/E of 32x our 2027 EPS estimate, below its three-year average. We raise our 2026 EPS projection to USD57.58 from USD42.76 and increase our 2027 EPS view to USD61.41 from USD60.60. CSU reported Q1 2026 revenue of $3.18B, up 20% Y/Y, driven primarily by acquisitions, with organic growth of 6% (2% FX-adjusted). License revenue declined 9%, while Maintenance and recurring revenue, representing 77% of total revenue, grew 22% with strong 9% organic growth. Operating expenses increased 21%, slightly outpacing revenue growth and resulting in modest margin compression, while newly acquired businesses in Q1 2026 were also notably margin-dilutive, running at negative margins. Management expects margins to improve over time, though this warrants monitoring given its growth by acquisition strategy. Free cash flow available to shareholders rose 44% to $733M, reflecting a 380-bp expansion from Q1 2025.
