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A Look At CSG Systems International (CSGS) Valuation After Its Strong 1 Year Shareholder Return

Simply Wall St · 4d ago

Event overview and recent share performance

CSG Systems International (CSGS) has drawn fresh attention after recent share price moves, with the stock showing gains over the past week, month, and past 3 months, while also posting a positive 1 year total return.

For context, the company reports revenue of US$1,216.8m and net income of US$83.3m. Both revenue and net income growth figures are available, which helps frame how the current share price around US$79.40 relates to its underlying business.

See our latest analysis for CSG Systems International.

The recent 22.82% 3 month share price return, coupled with a 60.28% 1 year total shareholder return, suggests momentum has been building as investors reassess CSG Systems International’s growth profile and risk outlook at its US$79.40 share price.

If CSG Systems International has caught your eye, this could be a moment to widen your search to other software and billing names and see how they compare using high growth tech and AI stocks.

So, with CSG Systems International delivering a 60.28% 1-year total return and trading near its US$80.70 analyst target, yet with a reported intrinsic discount of about 43%, is there still an opportunity here or is potential future performance already reflected in the current price?

Most Popular Narrative: 1.6% Undervalued

With CSG Systems International closing at US$79.40 against a narrative fair value of US$80.70, the valuation gap is small but still present.

The analysts have a consensus price target of $77.286 for CSG Systems International based on their expectations of its future earnings growth, profit margins and other risk factors.

In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $1.2 billion, earnings will come to $120.4 million, and it would be trading on a PE ratio of 20.8x, assuming you use a discount rate of 7.6%.

Read the complete narrative.

Curious what has to happen to margins, earnings and the P/E all at once to support that fair value? The full narrative lays out those exact hurdles.

Result: Fair Value of $80.70 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, there are still watchpoints, including heavy reliance on Charter and Comcast for 36% of revenue, as well as ongoing telecom consolidation that could pressure pricing and renewals.

Find out about the key risks to this CSG Systems International narrative.

Build Your Own CSG Systems International Narrative

If you look at the numbers and come to a different conclusion, or simply prefer your own framework, you can build a full view in minutes with Do it your way.

A great starting point for your CSG Systems International research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

If CSG Systems International is on your radar, do not stop there. A broader watchlist of quality ideas can help you stay prepared for the next move.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.