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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

CSG (CSGS): Buy, Sell, or Hold Post Q2 Earnings?

CSGS Cover Image

While the S&P 500 is up 15.9% since March 2025, CSG (currently trading at $64.67 per share) has lagged behind, posting a return of 5.8%. This might have investors contemplating their next move.

Is there a buying opportunity in CSG, or does it present a risk to your portfolio? Check out our in-depth research report to see what our analysts have to say, it’s free.

Why Do We Think CSG Will Underperform?

We're swiping left on CSG for now. Here are three reasons why CSGS doesn't excite us and a stock we'd rather own.

1. Long-Term Revenue Growth Disappoints

A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Unfortunately, CSG’s 4.3% annualized revenue growth over the last five years was mediocre. This was below our standard for the business services sector.

CSG Quarterly Revenue

2. Fewer Distribution Channels Limit its Ceiling

With $1.21 billion in revenue over the past 12 months, CSG is a small player in the business services space, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and numerous distribution channels.

3. New Investments Fail to Bear Fruit as ROIC Declines

ROIC, or return on invested capital, is a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Over the last few years, CSG’s ROIC averaged 4.9 percentage point decreases each year. Paired with its already low returns, these declines suggest its profitable growth opportunities are few and far between.

CSG Trailing 12-Month Return On Invested Capital

Final Judgment

We cheer for all companies making their customers lives easier, but in the case of CSG, we’ll be cheering from the sidelines. With its shares lagging the market recently, the stock trades at 13.1× forward P/E (or $64.67 per share). While this valuation is reasonable, we don’t see a big opportunity at the moment. There are superior stocks to buy right now. We’d recommend looking at a dominant Aerospace business that has perfected its M&A strategy.

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