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Computer Modelling
(TSX:CMG)
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Rating:65Neutral
Price Target:
C$4.00
▼(-0.50% Downside)
Action:Reiterated
Date:08/17/26
The score is driven primarily by solid underlying profitability and manageable leverage, but is held back by decelerating fundamentals (negative revenue growth, margin/ROE downshift, and sharply weaker free cash flow). Technicals are neutral-to-slightly positive near term but the stock remains below its longer-term trend. Valuation is reasonable rather than compelling, and the latest call reaffirmed full-year targets but highlighted continued near-term pressure and execution/seasonality risk.
Positive Factors
High-Margin Software Model
CMG's proprietary software model generates strong gross and operating margins, supporting reinvestment in product development and resilience through moderate demand cycles, provided customer retention and recurring revenue stabilize.
Negative Factors
Organic Revenue Contraction
The scale of organic contraction indicates that underlying customer demand and renewals remain weak despite acquisitions. Sustained weakness would limit operating leverage and make growth increasingly dependent on further M&A.
Read all positive and negative factors
Positive Factors
Negative Factors
High-Margin Software Model
CMG's proprietary software model generates strong gross and operating margins, supporting reinvestment in product development and resilience through moderate demand cycles, provided customer retention and recurring revenue stabilize.
Read all positive factors
Computer Modelling (CMG) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$295.60M
Dividend Yield1.06%
Average Volume (3M)134.82K
Price to Earnings (P/E)20.1
Beta (1Y)0.95
Revenue Growth-3.23%
EPS Growth-27.76%
CountryCA
Employees295
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.19
Shares Outstanding77,994,000
10 Day Avg. Volume97,222
30 Day Avg. Volume134,824
Financial Highlights & Ratios
PEG Ratio-0.92
Price to Book (P/B)4.50
Price to Sales (P/S)2.80
P/FCF Ratio12.29
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$5.00Price Target Upside24.38% Upside
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)0.24
Revenue Forecast (FY)C$126.70M
Computer Modelling Business Overview & Revenue Model
Company Description
Computer Modelling Group Ltd. (CMG) is a technology firm that develops and licenses advanced software solutions for reservoir simulation, serving clients worldwide with a significant presence in Canada. Its comprehensive product portfolio aids in ...
How the Company Makes Money
CMG primarily makes money by licensing its proprietary simulation software to customers, typically energy producers and related technical organizations. Revenue is generated through software license sales and related ongoing payments for maintenan...
Computer Modelling Earnings Call Summary
Earnings Call Date:Aug 12, 2026
(Q1-2027)
| % Change Since: |
Next Earnings Date:Nov 12, 2026
Earnings Call Sentiment Neutral
The call presented a mixed but controlled picture: the company faces notable near-term challenges (double-digit organic declines, softer professional services, lower adjusted EBITDA and reduced free cash flow this quarter) yet has several offsetting positives—acquisition contributions, a clarified capital deployment plan including a $20M SIB, active AI and product development, and management's reaffirmed full-year guidance with expectations of sequential improvement in recurring revenue and improved free cash flow for the year. Management emphasized strategy continuity, international opportunity, and confidence in stabilization, but results remain dependent on renewals, seasonality and successful integration of acquisitions.Positive Updates
Acquisition-driven growth and strategic deployment
Over the past ~2.5 years CMG deployed >$90M completing 4 major acquisitions. Acquisitions contributed +10% to total revenue growth and +9% to recurring revenue this quarter; SeisWare and Rose (closed in fiscal 2026) contributed positively to adjusted EBITDA despite seasonality.
Negative Updates
Organic recurring revenue decline
Organic recurring revenue declined 12% in the quarter (management identified this as the final quarter of lapping a lost contract from last year). Overall recurring revenue was down 3% for the quarter.
Read all updates
Q1-2027 Updates
Positive
Negative
Acquisition-driven growth and strategic deployment
Over the past ~2.5 years CMG deployed >$90M completing 4 major acquisitions. Acquisitions contributed +10% to total revenue growth and +9% to recurring revenue this quarter; SeisWare and Rose (closed in fiscal 2026) contributed positively to adjusted EBITDA despite seasonality.
Read all positive updates
Company Guidance
The company guided that Q1 revenue was $27.8M (total revenue down YoY as 10% acquisition growth was more than offset by a 16% organic decline), recurring revenue was down 3% (organic recurring revenue down 12% this quarter while acquisitions added ~9%), adjusted EBITDA and margin declined, and free cash flow fell to $3.5M (free cash flow conversion weakened) with current income tax of $1.5M vs. $0.9M a year ago; looking ahead, management expects organic recurring revenue to increase sequentially in Q2 (Q1 is typically the lightest quarter, Q4 the heaviest), Q2 professional services to be the lowest quarter of the year and adjusted EBITDA to decline both sequentially and YoY in Q2 (driven by lower professional services and higher sales & marketing/commission timing), full-year guidance reaffirms stable organic recurring revenue and no reduction in adjusted EBITDA versus fiscal 2026, free cash flow is expected to improve year-over-year in FY2027, professional services revenue is now expected to decline $6–7M (trending to the higher end), and the company will draw up to $20M on its credit facility to fund a substantial issuer bid while preserving capital for M&A.Computer Modelling Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
72
Positive
Cash Flow
62
Positive
| Breakdown | TTM | Mar 2026 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 124.40M | 126.19M | 108.68M | 73.85M | 66.20M | 67.36M |
| Gross Profit | 94.40M | 93.76M | 91.45M | 56.69M | 49.92M | 51.67M |
| EBITDA | 36.50M | 36.71M | 42.47M | 29.51M | 30.22M | 34.84M |
| Net Income | 15.43M | 17.42M | 26.26M | 19.80M | 18.41M | 20.19M |
Balance Sheet | ||||||
| Total Assets | 183.74M | 197.31M | 172.37M | 137.13M | 125.15M | 122.49M |
| Cash, Cash Equivalents and Short-Term Investments | 21.52M | 27.95M | 63.08M | 66.85M | 59.66M | 49.07M |
| Total Debt | 43.74M | 43.27M | 36.96M | 37.98M | 39.59M | 40.96M |
| Total Liabilities | 104.20M | 118.97M | 104.56M | 84.68M | 78.43M | 79.07M |
| Stockholders Equity | 79.54M | 78.33M | 67.81M | 52.45M | 46.72M | 43.42M |
Cash Flow | ||||||
| Free Cash Flow | 18.13M | 28.71M | 35.43M | 23.83M | 28.01M | 26.03M |
| Operating Cash Flow | 20.43M | 31.27M | 36.08M | 25.88M | 28.71M | 26.43M |
| Investing Cash Flow | -26.84M | -27.11M | -23.46M | -2.05M | -703.00K | -397.00K |
| Financing Cash Flow | -21.23M | -23.58M | -16.38M | -16.64M | -17.42M | -17.47M |
Computer Modelling Technical Analysis
Negative
4.02
Price Trends
3.80
Negative
3.84
Negative
4.21
Negative
Market Momentum
0.01
Positive
45.86
Neutral
10.00
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CMG, the sentiment is Negative. The current price of 4.02 is above the 20-day moving average (MA) of 3.89, above the 50-day MA of 3.80, and below the 200-day MA of 4.21, indicating a bearish trend. The MACD of 0.01 indicates Positive momentum. The RSI at 45.86 is Neutral, neither overbought nor oversold. The STOCH value of 10.00 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CMG.
Computer Modelling Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
65 Neutral | C$295.60M | 20.10 | 18.44% | 1.06% | -3.23% | -27.76% | |
63 Neutral | C$130.57M | 224.22 | 8.75% | ― | 13.07% | -16.88% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
50 Neutral | C$420.97M | 105.84 | 5.99% | 1.22% | 10.55% | -9.36% | |
45 Neutral | C$72.31M | -4.91 | -43.54% | ― | -66.56% | -940.17% | |
42 Neutral | C$832.80M | -12.20 | -93.80% | ― | 303.70% | -1.45% |
* Technology Sector Average
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Computer Modelling Corporate Events
Business Operations and StrategyStock Buyback
Computer Modelling Group Launches C$20 Million Share Buyback via Dutch Auction
Positive
Aug 14, 2026
Computer Modelling Group Ltd., a Calgary-headquartered energy software specialist listed on the TSX, operates a global footprint serving oil and gas producers with reservoir modelling solutions and related services. The company’s business mo...
Business Operations and StrategyStock Buyback
Computer Modelling Group Launches C$20 Million Share Buyback via Dutch Auction
Positive
Aug 12, 2026
Computer Modelling Group Ltd. has launched a substantial issuer bid to repurchase and cancel up to C$20 million of its common shares, using a modified Dutch auction structure with an expected price range between C$4.00 and C$4.50 per share. The of...
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
Computer Modelling Group Posts Lower Q1 Revenue, Launches $20 Million Share Buyback
Negative
Aug 12, 2026
Computer Modelling Group Ltd., a Calgary-based software provider of modelling, simulation and related professional services for energy industry clients, derives most of its income from recurring annuity and maintenance licenses. The company has br...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.