Csg Systems International Inc (NASDAQ: CSGS)

Sector: Technology Industry: Software - Infrastructure CIK: 0001005757
P/B 7.44
P/E 25.85
P/S 1.77
Market Cap 2.15 Bn
ROIC (Qtr) 11.99
Div Yield % 1.64
Rev 1y % (Qtr) 2.87
Total Debt (Qtr) 566.30 Mn
Debt/Equity (Qtr) 1.96

About

CSG Systems International Inc., or CSG, operates as a leading SaaS platform company in the technology industry, providing solutions that enable global companies to manage business complexities in the digital age. With a presence in over 20 countries and serving customers worldwide, CSG has established itself as a trusted technology leader for some of the biggest and most innovative brands. CSG's primary business activities involve the provision of cloud-first architecture and customer-centric solutions aimed at optimizing and monetizing transactions,...

Read more

Stock Price Chart

Analysis

Pros

  • Healthy cash reserves of 158.38M provide 26.48x coverage of short-term debt 5.98M, demonstrating strong liquidity position and minimal refinancing risk.
  • Robust free cash flow of 162.52M exceeds capital expenditure of 16.72M by 9.72x, indicating strong organic growth funding capability.
  • Tangible assets of 1.03B provide exceptional 11.77x coverage of deferred revenue 87.11M, showing strong service capability backing.
  • Robust tangible asset base of 1.03B provides 3.56x coverage of working capital 287.95M, indicating strong operational backing.
  • Retained earnings of 1.04B provide full 1.86x coverage of long-term debt 560.32M, indicating strong internal capital position.

Cons

  • Operating cash flow of 179.24M barely covers its investment activities of (16.72M), with a coverage ratio of -10.72, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (16.72M) provide weak support for R&D spending of 163.64M, which is -0.10x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 179.24M provides thin coverage of dividend payments of (27.43M) with a -6.54 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Operating earnings of 138.24M show weak coverage of depreciation charges of 72.72M, with a 1.90 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 162.52M represents just -15.31x of debt issuance (10.62M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer Comparison

Companies in the Software - Infrastructure
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MSFT Microsoft Corp 3,542.10 Bn 33.76 12.06 60.56 Bn
2 ORCL Oracle Corp 533.93 Bn 34.61 8.75 124.39 Bn
3 PLTR Palantir Technologies Inc. 437.56 Bn 399.47 112.31 0.24 Bn
4 PANW Palo Alto Networks Inc 125.16 Bn 112.03 13.10 0.35 Bn
5 CRWD CrowdStrike Holdings, Inc. 120.85 Bn -384.67 26.47 0.82 Bn
6 SNPS Synopsys Inc 71.69 Bn 35.89 11.14 15.14 Bn
7 NET Cloudflare, Inc. 67.84 Bn -658.43 33.70 3.50 Bn
8 FTNT Fortinet, Inc. 63.33 Bn 33.80 9.66 1.00 Bn

Industry Comparisons

Current Valuation

Metric Value Industry Percentile
EV to Assets 1.75 2.56
EV to Cash from Ops. 14.36 38.32
EV to Debt 4.54 -11.37
EV to EBIT 18.61 -12.79
EV to EBITDA 12.57 7.72
EV to Free Cash Flow [EV/FCF] 15.83 24.22
EV to Market Cap 1.19 0.58
EV to Revenue 2.11 -35.00
Price to Book Value [P/B] 7.44 3.74
Price to Earnings [P/E] 25.85 -18.61

Dividend Metrics

Metric Value Industry Percentile
Dividend Coverage Ratio 3.04 -0.30
Dividend Payout Ratio % 42.30 2.69
Dividend per Basic Share 1.26 0.10
FCF Dividend Payout Ratio % 21.42 1.67
Interest Coverage 4.69 -13.15

Growth Metrics

Metric Value Industry Percentile
Capex Growth (1y) % 22.47 -404.11
Cash and Equivalents Growth (1y) % 33.72 226.02
Dividend Growth (1y) % 6.78 -0.27
EBIAT Growth (1y) % 20.36 31.15
EBITDA Growth (1y) % 9.39 49.02
EBIT Growth (1y) % 16.02 25.85
EBT Growth (1y) % 23.50 17.82
EPS Growth (1y) % 30.70 70.69
FCF Growth (1y) % 46.18 295.45
Gross Profit Growth (1y) % 6.94 49.96

Liquidity Ratios

Metric Value Industry Percentile
Asset Utilization Ratio 0.83 0.68
Cash Payout Ratio 0.14 0.02
Cash Ratio 0.28 1.21
Current Ratio 1.50 2.57
Debt to Equity Ratio 1.96 -0.93
Interest Cover Ratio 4.69 -13.15
Times Interest Earned 4.69 -13.15

Profitability

Metric Value Industry Percentile
EBITDA Margin % 17.30 -544.82
EBIT Margin % 11.36 -197.78
EBT Margin % 8.94 -602.74
Gross Margin % 49.30 52.06
Net Profit Margin % 6.80 -605.52