data analytics, chart and graph icons with female hands typing on laptop in background
Shares of Topicus (TSXV:TOI) climbed 16% to end out the week as the company reported an amazing quarter and full-year results. The software company continues to run a strong streak and climb towards all-time highs.
What happened
Topicus stock continued to impress investors this week as it reported both fourth quarter and full-year 2023 earnings. The tech stock reported revenue was up 17% year over year, reaching â¬309.7 million in the fourth quarter. Net income also increased to â¬42.5 million, reaching â¬0.31 on a diluted per share basis.
Meanwhile, Topicus stock reported a strong year as well, with revenue up 23% compared to 2022 levels. This allowed revenue to reach â¬1,125 million, compared to â¬916.7 million in 2022. Net income also came in far higher, reaching â¬115.4 million or â¬0.88 on a diluted per share basis. What’s more, free cash flow surged, up 126% year over year to â¬123.4 million.
While the stock hasn’t come out with any forward-looking guidance for the software acquisition company, this might change once parent company Constellation Software (TSX:CSU) comes out with earnings next week.
Continued success
Topicus stock hasn’t been on the market very long, but has proven once again with this earnings report that it is set up for success. That success is meant to replicate the same success seen by Constellation stock over the last two decades.
Constellation came on the scene and acquired essential software companies across North America. These include everything from subway service to library access, and everything in between. The company acquires these for usually under $5 million, while revenue increases again and again as they put companies under the Constellation brand.
Now, that success is aiming to be replicated in Europe. And as we’ve seen, it has already proven to be quite successful. Yet the company still remains in value status, if you were to compare it with the growth we’ve seen from Constellation stock. That company started trading at $35 per share, and is now over $3,000 per share. And if Topicus stock is similar, the current share price of $120 still looks like a steal.
Stable growth ahead
The bottom line here is that Topicus stock isn’t starting from scratch. Instead, the company is using the play book that Constellation stock has made up over the last two decades. What’s more, some European companies acquired by Constellation stock have since been put under the Topicus stock name.
With Constellation management behind the scenes for now, Topicus stock offers an opportunity similar to picking up Constellation at the ground floor. Shares are already up 29% in the last year alone. And despite being an acquisition company, the tech stock only has a debt-to-equity ratio of 48%.
The company also looks likely to eventually produce a dividend, just as Constellation stock has done. So while we continue to seek out strong companies offering value on the TSX today, certainly consider Topicus stock. It has managed to provide strength even during a volatile period of time. And when that volatility is gone, the company is likely to surge even higher.
Should You Invest $1,000 In Constellation Software?
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 32 percentage points.*
They just revealed what they believe are the 10 best Starter Stocks for investors to buy right now⦠and Constellation Software made the list — but there are 9 other stocks you may be overlooking.
Get Our 10 Starter Stocks Today
* Returns as of 12/22/23
More reading
- This is the 8th Wonder of the World, According to Albert Einstein: Utilizing it Correctly Can Help Make Saving for Retirement an Absolute Breeze
Fool contributor Amy Legate-Wolfe has positions in Topicus.com. The Motley Fool has positions in and recommends Topicus.com. The Motley Fool recommends Constellation Software. The Motley Fool has a disclosure policy.
News Related-
The best Walmart Cyber Monday deals 2023
-
Jordan Poole took time to showboat and got his shot blocked into the stratosphere
-
The Top Canadian REITs to Buy in November 2023
-
OpenAI’s board might have been dysfunctional–but they made the right choice. Their defeat shows that in the battle between AI profits and ethics, it’s no contest
-
Russia-Ukraine Drone Warfare Rages With Dozens Headed for Moscow, Amid Deadly Winter Storm
-
Trump tells appeals court that threats to judge and clerk in NY civil fraud trial do not justify gag order
-
Can Anyone Take Paxlovid for Covid? Doctors Explain.
-
Google this week will begin deleting inactive accounts. Here's how to save yours.
-
How John Tortorella's Culture Extends from the Philadelphia Flyers to the AHL Phantoms
-
Tri-Cities' hatcheries report best Coho return in years
-
Wild release Dean Evason of head coaching duties
-
Air New Zealand’s Cyber Monday Sale Has the 'Lowest Fares of 2023' to Auckland, Sydney, and More
-
NDP tells Liberals to sweeten the deal if pharmacare legislation is delayed
-
'1,000 contacts with a club': Tiger Woods breaks down his typical tournament prep to college kids in fascinating video