Last Updated on August 16, 2025
Computer Modelling Group stock (TSX: CMG) is quietly becoming a standout in the world of energy tech. Specializing in advanced reservoir simulation software used by oil and gas companies globally, CMG blends niche technology with a recurring revenue model.
As energy markets digitize and sustainability pressures grow, CMG’s role in optimizing oilfield efficiency makes it a compelling stock to watch. In this article, we’ll explore what CMG does, its stock performance, market outlook, and whether it deserves a place in your 2025 portfolio.
Company Overview – What Does Computer Modelling Group Do?
Computer Modelling Group Ltd. is a Canadian software company that develops and sells reservoir simulation tools for oil and gas exploration and production companies.
Key Offerings:
- CMOST-AI: Machine-learning-based production forecasting tool
- IMEX, GEM, STARS: Flagship simulation software for different reservoir types
- Cloud Simulation: Scalable SaaS solutions for digital oilfields
Headquartered in Calgary, CMG has clients in over 60 countries and earns over 90% of revenue from recurring software licensing.
💡 Think of CMG as a hybrid between a SaaS company and an energy services provider.
CMG Stock Performance and Financial Highlights
When evaluating Computer Modelling Group stock, it’s essential to look beyond the company’s niche market and examine the numbers driving investor interest. CMG has consistently demonstrated strong financial discipline, recurring revenues, and a stable dividend—all traits that appeal to both growth and income investors.
Stock Snapshot (as of mid-2025):
- Ticker: TSX: CMG
- Market Cap: ~$515 million CAD
- Dividend Yield: ~0.64%
- P/E Ratio: ~23.91x
- 5-Year Return: +75% (2020–2025)
Financials (Q2 2025):
- Revenue: $29.6 million CAD ($30.5 million CAD in 2024 for the same period)
- Net Income: $3.3 million CAD ($3.9 million CAD in 2024 for the same period)
- Recurring Revenue: ~95% or around 20.9 million CAD
- Profit Margin: 24%
- Free cash flow: $4.5 million CAD
Ongoing uncertainty in the energy sector and the shift toward cleaner energy sources continues to affect the company’s operations. This challenging environment has resulted in longer sales cycles, extended procurement timelines, and a slower pace in securing new business opportunities.
The decline in organic recurring revenue from reservoir and production solutions, first observed in the fourth quarter, carried over into this quarter, leading to a year-over-year drop. Although acquisitions provided strong recurring revenue growth, this was partly offset by weaker organic performance.
As a result, both Net income and Free Cash Flow fell this quarter, driven mainly by reduced recurring revenue from core operations and lower professional services revenue.
Looking ahead to the third quarter, management expects a mid-single-digit decline in recurring revenue compared to Q2. This will likely have a similar impact on Adjusted EBITDA, primarily due to the non-renewal of a contract in the reservoir and production solutions segment.
For the full year—excluding contributions from SeisWare and any future acquisitions—Adjusted EBITDA is expected to come in lower than in fiscal 2024. However, the company anticipates stronger revenue and margins in the second half of the year compared to the first. This improvement should be fueled by seasonal contract renewals, timing of revenue recognition, and continued strong performance in seismic solutions.
For investors watching Computer Modelling Group stock, these trends highlight both the current headwinds facing the business and the potential for a rebound in the latter half of the year.
Growth Potential and Industry Trends
CMG’s growth trajectory ties closely to energy digitization and the push for operational efficiency in oil and gas.
Growth Drivers:
- Adoption of AI-driven oilfield modeling
- Shift toward cloud-based simulation
- Global expansion in the Middle East and Asia-Pacific
Market Trends:
- The digital oilfield market is projected to grow at 10.2% CAGR through 2030
- CMG has little direct competition in its niche, giving it strong pricing power
Its loyal customer base and mission-critical software mean high switching costs and low churn—ideal traits for long-term investors.
Risks and Challenges of Investing in CMG
Despite its strengths, investing in CMG isn’t without its risks:
- Narrow industry focus: Tied to oil & gas, which can be cyclical
- Limited growth runway compared to larger tech firms
- Currency and global exposure risks, especially in emerging markets
- Potential slowdown in E&P investments due to environmental regulations
Still, CMG’s recurring revenue and conservative management help mitigate volatility.
How to Buy Computer Modelling Group Stock
Interested in adding Computer Modelling Group stock (TSX: CMG) to your portfolio? Whether you’re based in Canada, the U.S., or Europe, buying shares of CMG is relatively straightforward if you know which platforms to use.
Ticker: CMG (Toronto Stock Exchange)
Available Through:
- Canada: Questrade, Wealthsimple, RBC Direct Investing
- US: Interactive Brokers, Fidelity (international markets enabled)
- Europe: DEGIRO, Saxo Bank
Tips:
- Use a broker that supports TSX trading
- Consider buying via TFSA or RRSP in Canada for tax benefits
- Set alerts for earnings reports and dividend announcements
Conclusion
Computer Modelling Group stock represents an opportunity to invest in a profitable, recurring-revenue software company serving a specialized segment of the energy market when on the cheap as the stock price is 40 percent lower than at the same time last year. With strong financials, niche market dominance, and increasing digital oilfield demand, CMG may be a solid long-term buy and hold—especially for investors seeking exposure beyond traditional tech or energy plays. This however is not without any risks as the revenue and the other financials are a little lower than the results from last year which can signal some developing problems at least for the short term. Our team believes the stock is a buy rather than a sell and the strong fundamentals will keep it profitable in the future.
Disclaimer: This content is for informational and educational purposes only and does not constitute financial or investment advice. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.