Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Constellation Software had a gross margin of 35.37% for the quarter that ended in Mar. 2026 => Competition eroding margins
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Constellation Software Gross Margin % Related Terms
Constellation Software Gross Margin % Historical Data
* Premium members only.
The historical data trend for Constellation Software's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
MEX:CSUN vs CRM, SHOP, UBER: Gross Margin % Comparison
For the Software - Application subindustry, Constellation Software's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Constellation Software Gross Margin % vs Software Industry
For the Software industry and Technology sector, Constellation Software's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Constellation Software's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Constellation Software (MEX:CSUN) has a Gross Margin % of 35.37% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Constellation Software and its competitors. This is near median its historical median of 37.04. Over the past decade, Constellation Software's Gross Margin % has ranged from 35.03 to 37.80. According to the industry distribution chart, Constellation Software ranks #1441 out of 2683 companies in the Software industry, placing it in the top 53.7%.
Is Constellation Software's Gross Margin % too high?
Constellation Software's current Gross Margin % of 35.37% is near median its 10-year median of 37.04. Over the past 10 years, this metric has ranged from a low of 35.03 to a high of 37.80. The Software industry median Gross Margin % is 40.45. Constellation Software's value of 35.37% is 12.6% below this industry median. Based on the distribution chart, Constellation Software ranks #1441 out of 2683 companies in the Software industry, which is below the industry midpoint. Overall, Constellation Software has a GF Score™ of 65/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Constellation Software's Gross Margin % compare to CRM and SHOP?
According to the Software industry distribution chart, Constellation Software ranks #1441 out of 2683 companies for Gross Margin %. This places Constellation Software in the lower half of its industry. The industry median Gross Margin % is 40.45. Constellation Software's value of 35.37% is 12.6% below this benchmark. Historically, Constellation Software's own Gross Margin % has ranged from 35.03 to 37.80 over the past decade. While the company's 10-year median is 37.04 vs. the industry median of 40.45, Constellation Software has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Software company?
The median Gross Margin % among Software companies is 40.45, based on 2,683 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Constellation Software's current Gross Margin % of 35.37% is 12.6% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Constellation Software and its competitors. For the Software industry, the median Gross Margin % is 40.45 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Constellation Software's current Gross Margin % is 35.37%, which is near median its own 10-year median of 37.04. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Constellation Software stock overvalued right now?
Based on GuruFocus' analysis, Constellation Software (MEX:CSUN) is currently considered Significantly Undervalued. The stock's GF Value™ is MXN67,444.26, compared to a current price of MXN33,833.42 — trading 49.8% below its estimated fair value. The current Gross Margin % is 35.37%, which is near median its 10-year median of 37.04 and 12.6% below the Software industry median of 40.45. Constellation Software's overall GF Score™ is 65/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Constellation Software (MEX:CSUN), the current Gross Margin % is 35.37% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Constellation Software (MEX:CSUN) Overvalued in 2026?
Based on GuruFocus' analysis, Constellation Software stock appears to be undervalued.
The current stock price of MXN33,833.42 is trading 49.8% below its estimated GF Value™ of MXN67,444.26.
GuruFocus considers Constellation Software to be Significantly Undervalued.
Key valuation signals for MEX:CSUN:
Gross Margin %: 35.37% (near median its 10-year median of 37.04)
GF Value™: MXN67,444.26 vs. price of MXN33,833.42 (49.8% below fair value)
Industry Position: 12.6% below the Software median (#1441 of 2683)
No single metric tells the full story. See the MEX:CSUN stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Constellation Software is an acquirer, manager, and developer of vertical market software, or VMS, businesses globally. VMS differentiates from horizontal software in that it provides mission critical solutions within a specific industry for customers in a particular market. Constellation operates through a decentralized model in which each business operates as its own independent entity. Managers of individual businesses are incentivized to optimize their business for returns on invested capital and revenue growth. Excess cash generated by the individual businesses is repatriated to portfolio managers who focus on allocating as much capital as possible on new acquisitions. As of 2026, Constellation consisted of over 1,000 individual businesses.
65GF Score
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