DESCARTES SYSTEMS GRP/THE (DSG.CA) Stock Fundamental Analysis
TSX:DSG - Toronto Stock Exchange - CA2499061083 - Common Stock - Currency: CAD
Overall DSG gets a fundamental rating of 7 out of 10. We evaluated DSG against 61 industry peers in the Software industry. Both the health and profitability get an excellent rating, making DSG a very profitable company, without any liquidiy or solvency issues. DSG is growing strongly while it is still valued neutral. This is a good combination! With these ratings, DSG could be worth investigating further for growth and quality investing!.
1. Profitability
1.1 Basic Checks
DSG had positive earnings in the past year.
DSG had a positive operating cash flow in the past year.
In the past 5 years DSG has always been profitable.
In the past 5 years DSG always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 8.47%, DSG belongs to the top of the industry, outperforming 80.33% of the companies in the same industry.
The Return On Equity of DSG (9.98%) is better than 73.77% of its industry peers.
DSG's Return On Invested Capital of 9.06% is amongst the best of the industry. DSG outperforms 81.97% of its industry peers.
DSG had an Average Return On Invested Capital over the past 3 years of 8.86%. This is below the industry average of 12.62%.
The 3 year average ROIC (8.86%) for DSG is below the current ROIC(9.06%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.47% | ||
| ROE | 9.98% | ||
| ROIC | 9.06% |
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 21.67% is amongst the best of the industry. DSG outperforms 91.80% of its industry peers.
In the last couple of years the Profit Margin of DSG has grown nicely.
The Operating Margin of DSG (26.69%) is better than 96.72% of its industry peers.
DSG's Operating Margin has improved in the last couple of years.
DSG's Gross Margin of 75.63% is amongst the best of the industry. DSG outperforms 80.33% of its industry peers.
DSG's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.69% | ||
| PM (TTM) | 21.67% | ||
| GM | 75.63% |
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so DSG is still creating some value.
The number of shares outstanding for DSG has been increased compared to 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
DSG has an Altman-Z score of 21.40. This indicates that DSG is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of DSG (21.40) is better than 96.72% of its industry peers.
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 | 21.4 |
ROIC/WACC1.15
WACC7.86%
2.3 Liquidity
A Current Ratio of 1.35 indicates that DSG should not have too much problems paying its short term obligations.
With a Current ratio value of 1.35, DSG perfoms like the industry average, outperforming 52.46% of the companies in the same industry.
DSG has a Quick Ratio of 1.35. 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 Quick ratio of 1.35. This is comparable to the rest of the industry: DSG outperforms 52.46% 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 | 1.35 | ||
| Quick Ratio | 1.35 |
3. Growth
3.1 Past
DSG shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 18.57%, 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 13.74% in the last year.
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)18.57%
EPS 3Y18.17%
EPS 5Y30.86%
EPS Q2Q%2.5%
Revenue 1Y (TTM)13.74%
Revenue growth 3Y15.3%
Revenue growth 5Y14.85%
Sales Q2Q%11.49%
3.2 Future
DSG is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 21.86% yearly.
The Revenue is expected to grow by 10.56% on average over the next years. This is quite good.
EPS Next Y17.47%
EPS Next 2Y29.89%
EPS Next 3Y23.99%
EPS Next 5Y21.86%
Revenue Next Year10.28%
Revenue Next 2Y11.81%
Revenue Next 3Y10.67%
Revenue Next 5Y10.56%
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.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 61.26 indicates a quite expensive valuation of DSG.
Compared to the rest of the industry, the Price/Earnings ratio of DSG indicates a somewhat cheap valuation: DSG is cheaper than 65.57% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 26.92. DSG is valued rather expensively when compared to this.
The Price/Forward Earnings ratio is 36.59, which means the current valuation is very expensive for DSG.
Based on the Price/Forward Earnings ratio, DSG is valued a bit cheaper than 68.85% of the companies in the same industry.
DSG is valuated expensively when we compare the Price/Forward Earnings ratio to 21.49, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 61.26 | ||
| Fwd PE | 36.59 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as DSG.
Based on the Price/Free Cash Flow ratio, DSG is valued a bit cheaper than the industry average as 63.93% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 43.11 | ||
| EV/EBITDA | 33.17 |
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.
The excellent profitability rating of DSG may justify a higher PE ratio.
A more expensive valuation may be justified as DSG's earnings are expected to grow with 23.99% in the coming years.
PEG (NY)3.51
PEG (5Y)1.99
EPS Next 2Y29.89%
EPS Next 3Y23.99%
5. Dividend
5.1 Amount
DSG does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
TSX:DSG (6/27/2025, 7:00:00 PM)
139.05
-0.19 (-0.14%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners86.14%
Inst Owner ChangeN/A
Ins Owners0.26%
Ins Owner ChangeN/A
Market Cap11.90B
Analysts77.78
Price Target137.7 (-0.97%)
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)1
Avg EPS beat(2)-2.97%
Min EPS beat(2)-6.41%
Max EPS beat(2)0.47%
EPS beat(4)2
Avg EPS beat(4)-0.81%
Min EPS beat(4)-6.41%
Max EPS beat(4)2.86%
EPS beat(8)4
Avg EPS beat(8)-2.1%
EPS beat(12)7
Avg EPS beat(12)0.81%
EPS beat(16)10
Avg EPS beat(16)1.31%
Revenue beat(2)0
Avg Revenue beat(2)-2.24%
Min Revenue beat(2)-2.69%
Max Revenue beat(2)-1.79%
Revenue beat(4)2
Avg Revenue beat(4)-0.34%
Min Revenue beat(4)-2.69%
Max Revenue beat(4)2.1%
Revenue beat(8)4
Avg Revenue beat(8)-0.29%
Revenue beat(12)7
Avg Revenue beat(12)0.11%
Revenue beat(16)11
Avg Revenue beat(16)0.45%
PT rev (1m)0%
PT rev (3m)20%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.61%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.15%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.22%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.17%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 61.26 | ||
| Fwd PE | 36.59 | ||
| P/S | 13.05 | ||
| P/FCF | 43.11 | ||
| P/OCF | 41.7 | ||
| P/B | 6.01 | ||
| P/tB | 95.24 | ||
| EV/EBITDA | 33.17 |
EPS(TTM)2.27
EY1.63%
EPS(NY)3.8
Fwd EY2.73%
FCF(TTM)3.23
FCFY2.32%
OCF(TTM)3.33
OCFY2.4%
SpS10.66
BVpS23.15
TBVpS1.46
PEG (NY)3.51
PEG (5Y)1.99
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.47% | ||
| ROE | 9.98% | ||
| ROCE | 11.96% | ||
| ROIC | 9.06% | ||
| ROICexc | 10.27% | ||
| ROICexgc | N/A | ||
| OM | 26.69% | ||
| PM (TTM) | 21.67% | ||
| GM | 75.63% | ||
| FCFM | 30.27% |
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%
ROICexcg growth 3YN/A
ROICexcg 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-Score6
Asset Turnover0.39
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 8.64% | ||
| Cap/Sales | 1.02% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 81.2% | ||
| Profit Quality | 139.66% | ||
| Current Ratio | 1.35 | ||
| Quick Ratio | 1.35 | ||
| Altman-Z | 21.4 |
F-Score6
WACC7.86%
ROIC/WACC1.15
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)18.57%
EPS 3Y18.17%
EPS 5Y30.86%
EPS Q2Q%2.5%
EPS Next Y17.47%
EPS Next 2Y29.89%
EPS Next 3Y23.99%
EPS Next 5Y21.86%
Revenue 1Y (TTM)13.74%
Revenue growth 3Y15.3%
Revenue growth 5Y14.85%
Sales Q2Q%11.49%
Revenue Next Year10.28%
Revenue Next 2Y11.81%
Revenue Next 3Y10.67%
Revenue Next 5Y10.56%
EBIT growth 1Y22.43%
EBIT growth 3Y19.76%
EBIT growth 5Y27.58%
EBIT Next Year72.43%
EBIT Next 3Y30.11%
EBIT Next 5Y23.13%
FCF growth 1Y5.81%
FCF growth 3Y7.45%
FCF growth 5Y16.41%
OCF growth 1Y6.26%
OCF growth 3Y7.57%
OCF growth 5Y16.02%