The Canadian inventory market has been on an upward trajectory up to now this yr, supported by the general resilience of the economic system. The S&P TSX Composite Index has posted a stable 9.9% achieve year-to-date, with a number of top-performing Canadian shares main the cost. Nonetheless, the story is a bit completely different within the know-how sector. The S&P TSX Capped Info Know-how Index has climbed solely 6% in the identical interval, lagging the broader benchmark. This means that whereas some tech shares have surged, others stay undervalued and proceed to commerce at enticing valuations.
One such under-the-radar inventory is Laptop Modelling Group (TSX:CMG). Regardless of its robust fundamentals, CMG shares have declined by roughly 27.4% up to now in 2025 and are down 44.5% over the previous yr. But, the long-term outlook for this software program and consulting agency stays compelling, given its superior modelling and simulation options for the power sector.
What’s behind the decline in Laptop Modelling Group inventory?
Because the complexity of power property grows, the necessity for exact simulation and forecasting instruments turns into much more crucial. CMG supplies software program for seismic interpretation, reservoir simulation, and manufacturing optimization, important instruments that assist operators scale back threat, enhance effectivity, and maximize useful resource restoration. Thus, the long-term demand for its tech and options stays stable.
Nonetheless, short-term macroeconomic pressures have taken a toll. With oil costs softening, many power corporations, particularly smaller and mid-sized gamers, are tightening their budgets. This has led to a slowdown in spending on new know-how, which has impacted CMG’s current gross sales efficiency and weighed on its share value.
The corporate had skilled encouraging progress via the acquisition of latest clients, the growth of relationships with present ones, and its entry into the power transition house. However that momentum has cooled within the present surroundings.
One other headwind has been the shifting panorama round carbon seize and storage (CCS). Initially boosted by beneficial tax incentives from the U.S. Inflation Discount Act, CCS exercise noticed a surge. Nonetheless, extra lately, that momentum has pale, and exercise within the U.S. has slowed considerably, posing one other short-term problem for CMG.
CMG Inventory is a stable long-term funding
Laptop Modelling Group is navigating short-term headwinds, however for long-term buyers, the present dip in its inventory value might be a shopping for alternative. The current pullback in its share value has pushed valuations to enticing ranges, providing a possible entry level for buyers with a long-term view.
Regardless of near-term challenges, CMG’s core know-how performs a key position within the power sector, primarily in subsurface modelling and reservoir simulation. These areas stay integral to innovation and operational effectivity within the oil and fuel trade. As trade budgets start to stabilize and the main target shifts again to technological development, CMG is well-positioned to profit.
Though macroeconomic pressures proceed to weigh on its reservoir and manufacturing enterprise, its current acquisitions of Bluware and Sharp are anticipated to reinforce its capabilities and broaden its market attain. Moreover, its seismic options enterprise is rising as a promising progress engine, supported by early market adoption, a aggressive edge with product differentiation, and enhancing gross sales momentum.
Financially, CMG is on stable footing. The corporate maintains a robust web money place and continues to generate sturdy free money move, which helped it to self-fund its two current acquisitions.
Trying forward, CMG’s mid- to long-term outlook stays promising. Its present options are deeply built-in into shoppers’ crucial workflows, making certain recurring demand. Mixed with an ongoing deal with operational effectivity, this positions the corporate properly for sustainable progress as soon as present market circumstances start to enhance.