Latest Ratios: P/E Ratio 72.8x · EV/EBITDA 21.3x · ROE 5.8%. (2007–2014 historical series)
Price-based multiples — how expensive the stock is relative to earnings, sales, book value, and cash flow
| Metric | TTM | FY 2014 | FY 2013 | FY 2012 | FY 2011 | FY 2010 | FY 2009 | FY 2008 | FY 2007 |
|---|---|---|---|---|---|---|---|---|---|
| Market Cap | $1.0B | $1.2B | $974M | $441M | $721M | $928M | $452M | $369M | $201M |
| Enterprise Value | $929M | $1.1B | $903M | $384M | $681M | $902M | $399M | $302M | $108M |
| P/E Ratio → | 72.75 | 83.41 | 135.09 | 34.66 | 30.54 | 318.50 | — | — | — |
| P/S Ratio | 3.08 | 3.63 | 3.41 | 1.75 | 3.36 | 5.33 | 3.50 | 4.23 | 3.99 |
| P/B Ratio | 3.98 | 4.56 | 4.24 | 2.16 | 4.22 | 7.36 | 4.31 | 3.69 | 2.13 |
| P/FCF | 30.89 | 36.44 | 40.31 | 26.26 | 30.60 | 117.62 | 84.35 | 487.33 | — |
| P/OCF | 17.79 | 20.99 | 22.63 | 11.38 | 17.30 | 37.05 | 20.60 | 26.62 | 47.18 |
P/E links to full P/E history page with 30-year chart
Enterprise-value multiples — capital-structure-neutral measures of total business value
| Metric | TTM | FY 2014 | FY 2013 | FY 2012 | FY 2011 | FY 2010 | FY 2009 | FY 2008 | FY 2007 |
|---|---|---|---|---|---|---|---|---|---|
| EV / Revenue | — | 3.36 | 3.16 | 1.52 | 3.18 | 5.18 | 3.09 | 3.46 | 2.13 |
| EV / EBITDA | 21.26 | 25.47 | 29.81 | 10.94 | 27.92 | 62.59 | 58.72 | 275.95 | — |
| EV / EBIT | 46.93 | — | — | — | — | — | — | — | — |
| EV / FCF | — | 33.66 | 37.35 | 22.87 | 28.94 | 114.30 | 74.54 | 397.91 | — |
Margins and return-on-capital ratios measuring operating efficiency
Full margin charts and quarterly trend are on the Earnings History page
| Metric | TTM | FY 2014 | FY 2013 | FY 2012 | FY 2011 | FY 2010 | FY 2009 | FY 2008 | FY 2007 |
|---|---|---|---|---|---|---|---|---|---|
| Gross Margin | 72.5% | 72.5% | 71.4% | 70.8% | 71.3% | 70.8% | 70.8% | 72.2% | 74.2% |
| Operating Margin | 6.0% | 6.0% | 2.9% | 6.2% | 4.7% | 1.4% | -1.4% | -5.1% | -11.3% |
| Net Profit Margin | 4.3% | 4.3% | 2.5% | 5.1% | 11.0% | 1.7% | -1.0% | -2.4% | -16.3% |
| Metric | TTM | FY 2014 | FY 2013 | FY 2012 | FY 2011 | FY 2010 | FY 2009 | FY 2008 | FY 2007 |
|---|---|---|---|---|---|---|---|---|---|
| ROE | 5.8% | 5.8% | 3.3% | 6.8% | 15.9% | 2.5% | -1.2% | -2.1% | -8.7% |
| ROA | 4.7% | 4.7% | 2.7% | 5.3% | 12.2% | 1.9% | -0.9% | -1.7% | -7.4% |
| ROIC | 9.0% | 9.0% | 4.1% | 8.4% | 6.5% | 2.5% | -3.1% | -20.4% | — |
| ROCE | 7.9% | 7.9% | 3.8% | 8.2% | 6.6% | 2.1% | -1.7% | -4.6% | -6.0% |
Solvency and debt-coverage ratios — lower is generally safer
| Metric | TTM | FY 2014 | FY 2013 | FY 2012 | FY 2011 | FY 2010 | FY 2009 | FY 2008 | FY 2007 |
|---|---|---|---|---|---|---|---|---|---|
| Debt / Equity | 0.05 | 0.05 | 0.05 | 0.05 | 0.06 | 0.05 | 0.07 | 0.05 | 0.03 |
| Debt / EBITDA | 0.28 | 0.28 | 0.36 | 0.31 | 0.43 | 0.47 | 1.06 | 5.00 | — |
| Net Debt / Equity | — | -0.35 | -0.31 | -0.28 | -0.23 | -0.21 | -0.50 | -0.68 | -0.99 |
| Net Debt / EBITDA | -2.11 | -2.11 | -2.36 | -1.63 | -1.60 | -1.82 | -7.73 | -62.01 | — |
| Debt / FCF | — | -2.78 | -2.96 | -3.40 | -1.66 | -3.32 | -9.82 | -89.42 | — |
| Interest Coverage | — | — | — | — | — | — | — | — | -2.23 |
Net cash position: cash ($104M) exceeds total debt ($12M)
Short-term solvency ratios and asset-utilisation metrics
| Metric | TTM | FY 2014 | FY 2013 | FY 2012 | FY 2011 | FY 2010 | FY 2009 | FY 2008 | FY 2007 |
|---|---|---|---|---|---|---|---|---|---|
| Current Ratio | 3.17 | 3.17 | 2.50 | 1.94 | 3.08 | 3.31 | 3.49 | 4.38 | 5.91 |
| Quick Ratio | 3.17 | 3.17 | 2.50 | 1.94 | 3.08 | 3.31 | 3.49 | 4.38 | 5.91 |
| Cash Ratio | 2.97 | 2.97 | 2.33 | 1.81 | 2.89 | 3.17 | 3.39 | 4.24 | 5.80 |
| Asset Turnover | — | 1.03 | 1.00 | 0.98 | 0.97 | 1.04 | 0.91 | 0.69 | 0.45 |
| Inventory Turnover | — | — | — | — | — | — | — | — | — |
| Days Sales Outstanding | — | 0.29 | 0.23 | 0.13 | 0.10 | 0.09 | 0.15 | 0.17 | 0.45 |
Earnings, FCF, buyback, and dividend yields — total returns to shareholders
Full dividend history and growth charts are on the Dividend History page
| Metric | TTM | FY 2014 | FY 2013 | FY 2012 | FY 2011 | FY 2010 | FY 2009 | FY 2008 | FY 2007 |
|---|---|---|---|---|---|---|---|---|---|
| Dividend Yield | — | — | — | — | — | — | — | — | — |
| Payout Ratio | — | — | — | — | — | — | — | — | — |
| Metric | TTM | FY 2014 | FY 2013 | FY 2012 | FY 2011 | FY 2010 | FY 2009 | FY 2008 | FY 2007 |
|---|---|---|---|---|---|---|---|---|---|
| Earnings Yield | 1.4% | 1.2% | 0.7% | 2.9% | 3.3% | 0.3% | — | — | — |
| FCF Yield | 3.2% | 2.7% | 2.5% | 3.8% | 3.3% | 0.9% | 1.2% | 0.2% | — |
| Buyback Yield | 1.6% | 1.4% | 0.6% | 15.4% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| Total Shareholder Yield | 1.6% | 1.4% | 0.6% | 15.4% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| Shares Outstanding | — | $33M | $31M | $31M | $31M | $30M | $28M | $28M | $9M |
High customer acquisition costs
According to current market data, Constant Contact trades at a P/E of 72.75, which suggests that investors are pricing in significant future earnings expansion relative to the company's historical performance and the broader technology sector's valuation benchmarks for SMB-focused software providers.
The elevated P/E multiple indicates that the market is placing a high premium on the company's recurring revenue model and its ability to capture market share in the SMB space. However, this valuation appears to leave little margin for error, as any deceleration in growth or compression in margins could lead to a significant re-rating of the stock.
Based on reported financial statements, the company's ROIC has fluctuated between 0.5% and 4.3% over the observed period, indicating that Constant Contact has struggled to consistently generate returns on invested capital that significantly exceed the cost of capital required to maintain its platform.
The low ROIC trend suggests that the company's heavy investment in sales and marketing, while necessary for growth, acts as a drag on overall capital efficiency. Investors should monitor whether management can improve these returns as the platform matures and the need for aggressive customer acquisition spending potentially moderates.
As indicated by the company's financial filings, the consistent ability to maintain a current ratio above 2.50, reaching 3.16 in 2015Q3, highlights a strong working capital position that is bolstered by the upfront collection of subscription fees from its diverse SMB customer base.
This liquidity profile provides the company with a significant buffer against operational volatility and reduces the need for external financing. The efficiency of this cash conversion cycle is a critical component of the company's financial stability, allowing it to self-fund ongoing infrastructure and product development requirements.
According to quarterly balance sheet data, Constant Contact maintains a negligible debt-to-equity ratio of approximately 0.05%, which suggests that the company is exceptionally well-insulated from interest rate shocks and refinancing risks compared to more highly leveraged peers in the technology industry.
This minimal reliance on debt provides management with substantial financial flexibility to navigate competitive pressures or pursue strategic initiatives without the burden of significant interest obligations. Such a conservative stance appears prudent given the inherent sensitivity of the SMB customer base to broader economic cycles.
The P/E ratio is frequently misapplied to Constant Contact, as it obscures the company's true cash-generating potential by failing to account for significant non-cash charges like stock-based compensation and the timing differences inherent in deferred revenue recognition for subscription-based software businesses.
Analysts should instead prioritize metrics such as EV/EBITDA or P/FCF, which provide a clearer view of the company's operational cash flow and its ability to fund growth internally. Relying solely on P/E may lead to an inaccurate assessment of the company's valuation relative to its actual economic performance.
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Quick answers to the most common questions about buying CTCT stock.
Constant Contact, Inc.'s current P/E ratio is 72.8x. The historical average is 70.9x. This places it at the 50th percentile of its historical range.
Constant Contact, Inc.'s current EV/EBITDA is 21.3x. This enterprise value multiple compares the company's total value (equity + debt - cash) to its EBITDA. The historical average is 35.9x.
Constant Contact, Inc.'s return on equity (ROE) is 5.8%. The historical average is 2.8%.
Based on historical data, Constant Contact, Inc. is trading at a P/E of 72.8x. This is at the 50th percentile of its historical P/E range. Compare with industry peers and growth rates for a complete picture.
Constant Contact, Inc. has 72.5% gross margin and 6.0% operating margin.
Constant Contact, Inc.'s Debt/EBITDA ratio is 0.3x, indicating low leverage. A ratio below 2x is generally considered financially healthy.