DESCARTES SYSTEMS GRP/THE (DSG.CA) Stock Fundamental Analysis
Canada - TSX:DSG - CA2499061083 - Common Stock
125.14 CAD
-9.49 (-7.05%)
DSG gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 63 industry peers in the Software industry. DSG gets an excellent profitability rating and is at the same time showing great financial health properties. DSG is not priced too expensively while it is growing strongly. Keep and eye on this one! These ratings could make DSG a good candidate for growth and quality investing.
1. Profitability
1.1 Basic Checks
DSG had positive earnings in the past year.
In the past year DSG had a positive cash flow from operations.
In the past 5 years DSG has always been profitable.
DSG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 8.44%, DSG belongs to the best of the industry, outperforming 85.71% of the companies in the same industry.
Looking at the Return On Equity, with a value of 9.88%, DSG is in the better half of the industry, outperforming 79.37% of the companies in the same industry.
DSG's Return On Invested Capital of 9.18% is amongst the best of the industry. DSG outperforms 80.95% of its industry peers.
The Average Return On Invested Capital over the past 3 years for DSG is below the industry average of 12.35%.
The last Return On Invested Capital (9.18%) for DSG is above the 3 year average (8.86%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.44% | ||
| ROE | 9.88% | ||
| ROIC | 9.18% |
ROA(3y)8.11%
ROA(5y)7.3%
ROE(3y)9.67%
ROE(5y)8.67%
ROIC(3y)8.86%
ROIC(5y)7.93%
1.3 Margins
DSG's Profit Margin of 21.64% is amongst the best of the industry. DSG outperforms 93.65% of its industry peers.
In the last couple of years the Profit Margin of DSG has grown nicely.
DSG has a Operating Margin of 27.33%. This is amongst the best in the industry. DSG outperforms 96.83% of its industry peers.
In the last couple of years the Operating Margin of DSG has grown nicely.
DSG's Gross Margin of 76.06% is amongst the best of the industry. DSG outperforms 82.54% of its industry peers.
DSG's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 27.33% | ||
| PM (TTM) | 21.64% | ||
| GM | 76.06% |
OM growth 3Y3.87%
OM growth 5Y11.08%
PM growth 3Y2.7%
PM growth 5Y14.15%
GM growth 3Y-0.17%
GM growth 5Y0.52%
2. Health
2.1 Basic Checks
DSG has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for DSG has been increased compared to 1 year ago.
DSG has more shares outstanding than it did 5 years ago.
There is no outstanding debt for DSG. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
An Altman-Z score of 19.28 indicates that DSG is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 19.28, DSG belongs to the best of the industry, outperforming 90.48% of the companies in the same industry.
There is no outstanding debt for DSG. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 19.28 |
ROIC/WACC0.9
WACC10.19%
2.3 Liquidity
DSG has a Current Ratio of 1.70. This is a normal value and indicates that DSG is financially healthy and should not expect problems in meeting its short term obligations.
DSG has a Current ratio (1.70) which is in line with its industry peers.
A Quick Ratio of 1.70 indicates that DSG should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.70, DSG is in line with its industry, outperforming 58.73% of the companies in the same industry.
The current and quick ratio evaluation for DSG is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.7 | ||
| Quick Ratio | 1.7 |
3. Growth
3.1 Past
DSG shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 14.19%, which is quite good.
Measured over the past years, DSG shows a very strong growth in Earnings Per Share. The EPS has been growing by 30.86% on average per year.
Looking at the last year, DSG shows a quite strong growth in Revenue. The Revenue has grown by 12.68% in the last year.
DSG shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.85% yearly.
EPS 1Y (TTM)14.19%
EPS 3Y18.17%
EPS 5Y30.86%
EPS Q2Q%7.5%
Revenue 1Y (TTM)12.68%
Revenue growth 3Y15.3%
Revenue growth 5Y14.85%
Sales Q2Q%10.05%
3.2 Future
The Earnings Per Share is expected to grow by 21.92% on average over the next years. This is a very strong growth
DSG is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.60% yearly.
EPS Next Y10.91%
EPS Next 2Y15.63%
EPS Next 3Y18.07%
EPS Next 5Y21.92%
Revenue Next Year10.23%
Revenue Next 2Y10.74%
Revenue Next 3Y10.72%
Revenue Next 5Y10.6%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 53.25, which means the current valuation is very expensive for DSG.
Compared to the rest of the industry, the Price/Earnings ratio of DSG indicates a somewhat cheap valuation: DSG is cheaper than 73.02% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 26.76. DSG is valued rather expensively when compared to this.
DSG is valuated quite expensively with a Price/Forward Earnings ratio of 40.73.
69.84% of the companies in the same industry are more expensive than DSG, based on the Price/Forward Earnings ratio.
DSG's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 22.63.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 53.25 | ||
| Fwd PE | 40.73 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, DSG is valued a bit cheaper than the industry average as 66.67% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of DSG indicates a somewhat cheap valuation: DSG is cheaper than 71.43% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.38 | ||
| EV/EBITDA | 27.76 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates DSG does not grow enough to justify the current Price/Earnings ratio.
DSG has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as DSG's earnings are expected to grow with 18.07% in the coming years.
PEG (NY)4.88
PEG (5Y)1.73
EPS Next 2Y15.63%
EPS Next 3Y18.07%
5. Dividend
5.1 Amount
DSG does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
TSX:DSG (10/29/2025, 7:00:00 PM)
125.14
-9.49 (-7.05%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners92.55%
Inst Owner ChangeN/A
Ins Owners0.26%
Ins Owner ChangeN/A
Market Cap10.75B
Revenue(TTM)684.78M
Net Income(TTM)148.19M
Analysts77.78
Price Target137.7 (10.04%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-4.34%
Min EPS beat(2)-6.83%
Max EPS beat(2)-1.85%
EPS beat(4)2
Avg EPS beat(4)-1.34%
Min EPS beat(4)-6.83%
Max EPS beat(4)2.86%
EPS beat(8)4
Avg EPS beat(8)-1.75%
EPS beat(12)7
Avg EPS beat(12)0.74%
EPS beat(16)9
Avg EPS beat(16)0.6%
Revenue beat(2)1
Avg Revenue beat(2)-0.24%
Min Revenue beat(2)-1.77%
Max Revenue beat(2)1.29%
Revenue beat(4)2
Avg Revenue beat(4)-0.27%
Min Revenue beat(4)-2.69%
Max Revenue beat(4)2.1%
Revenue beat(8)4
Avg Revenue beat(8)-0.16%
Revenue beat(12)7
Avg Revenue beat(12)-0.19%
Revenue beat(16)11
Avg Revenue beat(16)0.38%
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)-0.5%
EPS NQ rev (3m)-5%
EPS NY rev (1m)-0.1%
EPS NY rev (3m)-5.58%
Revenue NQ rev (1m)0.16%
Revenue NQ rev (3m)2.14%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)-0.04%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 53.25 | ||
| Fwd PE | 40.73 | ||
| P/S | 11.28 | ||
| P/FCF | 33.38 | ||
| P/OCF | 32.47 | ||
| P/B | 5.15 | ||
| P/tB | 49.07 | ||
| EV/EBITDA | 27.76 |
EPS(TTM)2.35
EY1.88%
EPS(NY)3.07
Fwd EY2.46%
FCF(TTM)3.75
FCFY3%
OCF(TTM)3.85
OCFY3.08%
SpS11.1
BVpS24.31
TBVpS2.55
PEG (NY)4.88
PEG (5Y)1.73
Graham Number35.85
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.44% | ||
| ROE | 9.88% | ||
| ROCE | 12.12% | ||
| ROIC | 9.18% | ||
| ROICexc | 10.87% | ||
| ROICexgc | N/A | ||
| OM | 27.33% | ||
| PM (TTM) | 21.64% | ||
| GM | 76.06% | ||
| FCFM | 33.78% |
ROA(3y)8.11%
ROA(5y)7.3%
ROE(3y)9.67%
ROE(5y)8.67%
ROIC(3y)8.86%
ROIC(5y)7.93%
ROICexc(3y)11.36%
ROICexc(5y)9.99%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)11.7%
ROCE(5y)10.48%
ROICexgc growth 3YN/A
ROICexgc growth 5YN/A
ROICexc growth 3Y6.45%
ROICexc growth 5Y18.03%
OM growth 3Y3.87%
OM growth 5Y11.08%
PM growth 3Y2.7%
PM growth 5Y14.15%
GM growth 3Y-0.17%
GM growth 5Y0.52%
F-Score7
Asset Turnover0.39
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 7.9% | ||
| Cap/Sales | 0.95% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 88.24% | ||
| Profit Quality | 156.09% | ||
| Current Ratio | 1.7 | ||
| Quick Ratio | 1.7 | ||
| Altman-Z | 19.28 |
F-Score7
WACC10.19%
ROIC/WACC0.9
Cap/Depr(3y)8.9%
Cap/Depr(5y)8.08%
Cap/Sales(3y)1.09%
Cap/Sales(5y)1.1%
Profit Quality(3y)168.32%
Profit Quality(5y)189.61%
High Growth Momentum
Growth
EPS 1Y (TTM)14.19%
EPS 3Y18.17%
EPS 5Y30.86%
EPS Q2Q%7.5%
EPS Next Y10.91%
EPS Next 2Y15.63%
EPS Next 3Y18.07%
EPS Next 5Y21.92%
Revenue 1Y (TTM)12.68%
Revenue growth 3Y15.3%
Revenue growth 5Y14.85%
Sales Q2Q%10.05%
Revenue Next Year10.23%
Revenue Next 2Y10.74%
Revenue Next 3Y10.72%
Revenue Next 5Y10.6%
EBIT growth 1Y21.74%
EBIT growth 3Y19.76%
EBIT growth 5Y27.58%
EBIT Next Year72.41%
EBIT Next 3Y30.03%
EBIT Next 5Y23.17%
FCF growth 1Y17.77%
FCF growth 3Y7.45%
FCF growth 5Y16.41%
OCF growth 1Y17.48%
OCF growth 3Y7.57%
OCF growth 5Y16.02%
DESCARTES SYSTEMS GRP/THE / DSG.CA FAQ
What is the fundamental rating for DSG stock?
ChartMill assigns a fundamental rating of 7 / 10 to DSG.CA.
Can you provide the valuation status for DESCARTES SYSTEMS GRP/THE?
ChartMill assigns a valuation rating of 4 / 10 to DESCARTES SYSTEMS GRP/THE (DSG.CA). This can be considered as Fairly Valued.
Can you provide the profitability details for DESCARTES SYSTEMS GRP/THE?
DESCARTES SYSTEMS GRP/THE (DSG.CA) has a profitability rating of 8 / 10.
How financially healthy is DESCARTES SYSTEMS GRP/THE?
The financial health rating of DESCARTES SYSTEMS GRP/THE (DSG.CA) is 8 / 10.
What is the earnings growth outlook for DESCARTES SYSTEMS GRP/THE?
The Earnings per Share (EPS) of DESCARTES SYSTEMS GRP/THE (DSG.CA) is expected to grow by 10.91% in the next year.