Constellation Software has no way to benefit from AI and little organic growth, so 21x GAAP EBIT looks fair, with perhaps a downside skew if churn rises across its portfolio in the next five years. The market's negative reaction is rational. Its small vertical software businesses were run financially rather than for product, many still on-prem, with no central AI strategy as software gets cheaper to build. Organic growth was 2% in constant currency; inorganic growth is fundamentally different. … Show more

TransDigm's valuation has normalized to roughly the same multiple as 10 years ago, which looks reasonable, even cheap. Organic growth prospects are probably as good as before and COVID proved the business is a cockroach. Against that, M&A is less of an opportunity now given the law of large numbers, and rates are higher. It is probably less undervalued today than a decade ago, but not by much. x.com  x.com 

Constellation Software's post-earnings selloff is myopic, reflecting a market unwilling to look beyond one quarter. Results are driven by lumpy capital deployed into acquisitions, which analysts can't forecast, so performance must be judged over years rather than against quarterly estimates. This quarter's organic growth deceleration feeds the bear case, but it was not a normal quarter, and management explained it well on the call; the market may stay in show-me mode until Q3. x.com  x.com  x.com  … Show more