CSGS has revealed a strategic collaboration with NetLync, focusing on the launch of CSG Entitlements-as-a-Service. This innovative SaaS platform, driven by NetLync's entitlement server expertise, aims to offer operators enhanced speed and flexibility. With this service, operators are empowered to implement iOS and Android functionalities within weeks, significantly improving their user experience offerings.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 8 analysts, the average target price for CSG Systems International Inc (CSGS, Financial) is $73.50 with a high estimate of $85.00 and a low estimate of $58.00. The average target implies an upside of 23.78% from the current price of $59.38. More detailed estimate data can be found on the CSG Systems International Inc (CSGS) Forecast page.
Based on the consensus recommendation from 10 brokerage firms, CSG Systems International Inc's (CSGS, Financial) average brokerage recommendation is currently 1.6, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for CSG Systems International Inc (CSGS, Financial) in one year is $60.63, suggesting a upside of 2.11% from the current price of $59.38. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the CSG Systems International Inc (CSGS) Summary page.
CSGS Key Business Developments
Release Date: February 05, 2025
- Quarterly Revenue: $317 million, a 7% year-over-year growth.
- Organic Revenue Growth: 5% year-over-year.
- Operating Income: Increased 32% year-over-year, reaching 20.1% of revenue.
- Adjusted EBITDA: Grew 21% year-over-year, with a margin of 24.8%.
- Non-GAAP EPS: $1.65, a 79% year-over-year increase.
- Free Cash Flow: $113 million, a 9% year-over-year growth.
- Dividend Increase: Approximately 7% to $1.28 per year.
- Net Debt: $389 million with a leverage ratio of 1.5 times adjusted.
- 2025 Revenue Guidance: $1.21 billion to $1.25 billion.
- 2025 Non-GAAP EPS Guidance: $4.55 to $4.80.
- 2025 Free Cash Flow Guidance: $110 million to $150 million.
- Capital Expenditures Guidance: $20 million to $30 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- CSG Systems International Inc (CSGS, Financial) achieved record-setting results in 2024, with a 7% total revenue growth and a new quarterly revenue record of $317 million.
- The company reported a significant increase in profitability, with operating income growing 32% year-over-year in Q4 and adjusted EBITDA reaching a high margin of 24.8%.
- CSG Systems International Inc (CSGS) announced a 7% increase in its dividend, marking the 12th consecutive annual increase, demonstrating a commitment to shareholder returns.
- The company secured several significant new contracts and renewals, including a six-year contract renewal with Comcast and new deals with MTN South Africa and Mobiley.
- CSG Systems International Inc (CSGS) is diversifying its revenue streams, targeting new industry verticals such as media, financial services, healthcare, and retail, aiming for these to constitute over 35% of total revenue by 2026.
Negative Points
- Despite strong Q4 results, CSG Systems International Inc (CSGS) experienced sub-2% organic growth for the full year 2024, indicating challenges in maintaining consistent growth.
- The company faces a competitive market environment, which is reflected in its conservative guidance of 2% to 4% organic growth for 2025.
- CSG Systems International Inc (CSGS) is still in the early stages of its SaaS and cloud transition, with no specific revenue breakdown provided, leaving some uncertainty about the scale and impact of these initiatives.
- The company anticipates modest operating margin expansion in 2025, with a more significant increase expected by 2026, suggesting that cost adjustments and investments are still needed.
- CSG Systems International Inc (CSGS) acknowledges the tough market conditions and competitive intensity, particularly in the telecom sector, which could impact future growth and profitability.
