Constellation reported third-quarter sales of $3.51 billion, up 19% year over year, with 2% organic growth. Aggregate cash consideration toward acquisitions was up about 46% to $609 million. Free cash flow available to shareholders dropped 16%, largely due to elevated Topicus revaluation charges.
The firm’s decentralized capital allocation system should enable it to identify and execute on high volumes of vertical market software at its desired rates of return.
Constellation’s growth model is reliant on higher acquisition volume as it scales. The firm will inevitably have to increase its share of large acquisitions and horizontal software, which can lower its growth prospects and returns profile.
Metric | CSU | ROP | ORCL |
|---|---|---|---|
Price/Earnings (Normalized) | 24.03 | 17.62 | 14.60 |
Price/Book Value | 11.86 | 2.45 | 5.77 |
Price/Sales | 3.96 | 5.80 | 4.83 |
Price/Cash Flow | 18.46 | 18.18 | 11.36 |
Metric | CSU | ROP | ORCL |
|---|---|---|---|
Quick Ratio | 0.82 | 0.33 | 1.02 |
Current Ratio | 0.91 | 0.43 | 1.17 |
Interest Coverage | 6.40 | 8.43 | 5.07 |
Metric | CSU | ROP | ORCL |
|---|---|---|---|
Return on Assets (Normalized) | 6.55% | 7.97% | 9.91% |
Return on Equity (Normalized) | 28.41% | 14.30% | 63.39% |
Return on Invested Capital (Normalized) | 12.30% | 10.59% | 15.17% |
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