Constellation Software is “misunderstood” right now, this investor says

In an appearance on BNN Bloomberg Market Call on April 14, Raymond James Investment Counsel portfolio manager Chris Blumas said Constellation Software (Constellation Software Stock Quote, Chart, News, Analysts, Financials TSX:CSU) looks like a compelling buying opportunity, arguing the market is underestimating the durability of its software model in an AI-driven environment.

Blumas said Constellation’s valuation has fallen to levels he has not seen in about a decade, even as its competitive position remains intact. He argued that while large language model providers are focused on selling expensive tools to large enterprises, Constellation’s role is different. With more than 1,500 enterprise software businesses under its umbrella, he said the company is well placed to help customers integrate new AI capabilities into their existing workflows and products.

In his view, that makes Constellation’s moat stronger than many investors currently appreciate.

“I think the moat on Constellation is a little bit misunderstood,” Blumas said. “It’s just such an attractive buying opportunity.”

Among analysts covering the stock, nine rate it “Buy,” three rate it “Hold” and none rate it “Sell,” with a consensus price target of $4,116.08.

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