DESCARTES SYSTEMS GRP/THE (DSG.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:DSG - CA2499061083 - Common Stock
132.45 CAD
+16.64 (+14.37%)
Overall DSG gets a fundamental rating of 7 out of 10. We evaluated DSG against 63 industry peers in the Software industry. DSG scores excellent points on both the profitability and health parts. This is a solid base for a good stock. DSG is not overvalued while it is showing excellent growth. This is an interesting combination. This makes DSG very considerable for growth and quality investing!
1. Profitability
1.1 Basic Checks
In the past year DSG was profitable.
DSG had a positive operating cash flow in the past year.
Each year in the past 5 years DSG has been profitable.
In the past 5 years DSG always reported a positive cash flow from operatings.
1.2 Ratios
DSG's Return On Assets of 8.46% is amongst the best of the industry. DSG outperforms 84.13% of its industry peers.
DSG has a better Return On Equity (9.91%) than 79.37% of its industry peers.
With a decent Return On Invested Capital value of 9.19%, DSG is doing good in the industry, outperforming 77.78% of the companies in the same industry.
DSG had an Average Return On Invested Capital over the past 3 years of 8.86%. This is below the industry average of 11.54%.
The last Return On Invested Capital (9.19%) for DSG is above the 3 year average (8.86%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.46% | ||
| ROE | 9.91% | ||
| ROIC | 9.19% |
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 21.70% is amongst the best of the industry. DSG outperforms 95.24% of its industry peers.
In the last couple of years the Profit Margin of DSG has grown nicely.
DSG has a Operating Margin of 27.36%. This is amongst the best in the industry. DSG outperforms 95.24% 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.
In the last couple of years the Gross Margin of DSG has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 27.36% | ||
| PM (TTM) | 21.7% | ||
| 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.
DSG has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, DSG has more shares outstanding
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 17.92 indicates that DSG is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 17.92, DSG belongs to the top of the industry, outperforming 92.06% 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 | 17.92 |
ROIC/WACC0.93
WACC9.89%
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 of 1.70. This is comparable to the rest of the industry: DSG outperforms 58.73% of its industry peers.
A Quick Ratio of 1.70 indicates that DSG should not have too much problems paying its short term obligations.
DSG's Quick ratio of 1.70 is in line compared to the rest of the industry. DSG outperforms 58.73% of its industry peers.
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 11.32%, which is quite good.
The Earnings Per Share has been growing by 30.86% on average over the past years. This is a very strong growth
The Revenue has grown by 13.63% in the past year. This is quite good.
Measured over the past years, DSG shows a quite strong growth in Revenue. The Revenue has been growing by 14.85% on average per year.
EPS 1Y (TTM)11.32%
EPS 3Y18.17%
EPS 5Y30.86%
EPS Q2Q%19.05%
Revenue 1Y (TTM)13.63%
Revenue growth 3Y15.3%
Revenue growth 5Y14.85%
Sales Q2Q%11.21%
3.2 Future
Based on estimates for the next years, DSG will show a very strong growth in Earnings Per Share. The EPS will grow by 21.92% on average per year.
Based on estimates for the next years, DSG will show a quite strong growth in Revenue. The Revenue will grow by 10.60% on average per year.
EPS Next Y44.21%
EPS Next 2Y27.62%
EPS Next 3Y24.27%
EPS Next 5Y21.92%
Revenue Next Year10.01%
Revenue Next 2Y10.49%
Revenue Next 3Y10.27%
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
A Price/Earnings ratio of 53.62 indicates a quite expensive valuation of DSG.
DSG's Price/Earnings ratio is a bit cheaper when compared to the industry. DSG is cheaper than 68.25% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.41, DSG is valued quite expensively.
The Price/Forward Earnings ratio is 35.35, which means the current valuation is very expensive for DSG.
DSG's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. DSG is cheaper than 65.08% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 35.40. DSG is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 53.62 | ||
| Fwd PE | 35.35 |
4.2 Price Multiples
DSG's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. DSG is cheaper than 60.32% of the companies in the same industry.
DSG's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. DSG is cheaper than 69.84% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 35.25 | ||
| EV/EBITDA | 25.59 |
4.3 Compensation for Growth
DSG's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of DSG may justify a higher PE ratio.
DSG's earnings are expected to grow with 24.27% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.21
PEG (5Y)1.74
EPS Next 2Y27.62%
EPS Next 3Y24.27%
5. Dividend
5.1 Amount
No dividends for DSG!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
TSX:DSG (12/4/2025, 7:00:00 PM)
132.45
+16.64 (+14.37%)
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 Cap11.39B
Revenue(TTM)651.00M
Net Income(TTM)148.63M
Analysts77.5
Price Target137.7 (3.96%)
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%
EPS NQ rev (3m)-5%
EPS NY rev (1m)30.02%
EPS NY rev (3m)26.69%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)2.14%
Revenue NY rev (1m)-0.2%
Revenue NY rev (3m)0.73%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 53.62 | ||
| Fwd PE | 35.35 | ||
| P/S | 11.93 | ||
| P/FCF | 35.25 | ||
| P/OCF | 34.29 | ||
| P/B | 5.45 | ||
| P/tB | 51.9 | ||
| EV/EBITDA | 25.59 |
EPS(TTM)2.47
EY1.86%
EPS(NY)3.75
Fwd EY2.83%
FCF(TTM)3.76
FCFY2.84%
OCF(TTM)3.86
OCFY2.92%
SpS11.1
BVpS24.32
TBVpS2.55
PEG (NY)1.21
PEG (5Y)1.74
Graham Number36.77
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.46% | ||
| ROE | 9.91% | ||
| ROCE | 12.13% | ||
| ROIC | 9.19% | ||
| ROICexc | 10.88% | ||
| ROICexgc | N/A | ||
| OM | 27.36% | ||
| PM (TTM) | 21.7% | ||
| GM | 76.06% | ||
| FCFM | 33.84% |
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 | 88.32% | ||
| Profit Quality | 155.89% | ||
| Current Ratio | 1.7 | ||
| Quick Ratio | 1.7 | ||
| Altman-Z | 17.92 |
F-Score7
WACC9.89%
ROIC/WACC0.93
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)11.32%
EPS 3Y18.17%
EPS 5Y30.86%
EPS Q2Q%19.05%
EPS Next Y44.21%
EPS Next 2Y27.62%
EPS Next 3Y24.27%
EPS Next 5Y21.92%
Revenue 1Y (TTM)13.63%
Revenue growth 3Y15.3%
Revenue growth 5Y14.85%
Sales Q2Q%11.21%
Revenue Next Year10.01%
Revenue Next 2Y10.49%
Revenue Next 3Y10.27%
Revenue Next 5Y10.6%
EBIT growth 1Y21.76%
EBIT growth 3Y19.76%
EBIT growth 5Y27.58%
EBIT Next Year76.74%
EBIT Next 3Y30.71%
EBIT Next 5Y23.67%
FCF growth 1Y17.98%
FCF growth 3Y7.45%
FCF growth 5Y16.41%
OCF growth 1Y17.68%
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 5 / 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 44.21% in the next year.