- Price
- CA$2853.79
- Fair value
- CA$3500.00
- Discount
- 18.5%
- Uncertainty
- High
- LSEG rating
- 2.00
- Moat
- Narrow
- Next earnings
- 2026-10-21
- Next earnings is estimate
- No
- Company name
- Constellation Software
- Sector
- Diversified software
- About
- Constellation Software buys small software companies. Each company makes software for one specific industry, such as public transit, libraries, or local government. Customers depend on this software to run daily operations, so they rarely switch to a new system. Constellation earns most of its money from maintenance fees and recurring subscriptions. It almost never sells a company after it buys it.
- Thesis
- Investors worry that AI tools will let competitors build cheap replacements for Constellation's niche software products. This fear has weighed on the stock, along with a slowdown in organic growth and the health-related resignation of founder Mark Leonard. But Constellation's software runs core, regulated operations for its customers, such as billing systems for utilities or case management for courts. Customers rarely remove this kind of system, since a failure would disrupt critical operations. A cheap AI clone is unlikely to displace software with decades of embedded workflows and compliance history. The new CEO, Mark Miller, worked inside Constellation for more than 30 years before taking over, and he has kept the acquisition pace steady since the leadership change.
- Risks
- Founder Mark Leonard resigned for health reasons in September 2025 and left the board in 2026. Constellation's decentralized model depended heavily on his capital-allocation judgment. It is not yet proven under the new CEO over a full cycle.
Organic growth fell to 3% in Q2 2026, its weakest pace in nearly six years, due to large-contract losses and customer attrition in some operating groups. If growth does not recover, the compounding math behind the stock weakens.
Competition for acquisition targets remains intense, and private-market valuations for larger software assets have not come down. If Constellation cannot keep buying enough companies at attractive prices, it must deploy more cash into lower-return uses, which slows long-term compounding.
- Recent events
- 2026-08-11: Constellation reported Q2 2026 revenue of $3,335 million, up 17% from last year. Organic growth was 3%, the softest rate in almost six years.
2025-09-25: Mark Leonard resigned as President for health reasons. The board appointed Mark Miller, a 30-year Constellation employee and the company's Chief Operating Officer, to replace him.