Q: CSU market cap has grown from 55 Billion to 75 Billion over the past three months. Have the companies fundamentals improved enough to justify a 20 billion increase? This would imply transformational developments. This move seems excessive to me and I am trying to understand what is behind it.
Thanks.
Thanks.
5i Research Answer:
It is difficult to pin down. With the company's success, of course, we are sure holders are very reluctant to sell, perhaps just creating a supply imbalance. There has not really been any giant news from the company, but as a tech company it does have leverage to lower rates. It may becoming one of a 'magnificient' group of stocks, but in Canada, ala the Magnificient Seven in the US. The company has had more publicitity in investment communities over the past six months. P/E (forward 2024) is now 37X, certainly not cheap but there are much more expensive stocks out there. CIBC and RBC both raised their target prices in the last week, and this seems to have set up a quick re-rating, with the stock now up eight days in a row.