DESCARTES SYSTEMS GRP/THE (DSG.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:DSG - CA2499061083 - Common Stock
115.39 CAD
+0.61 (+0.53%)
DSG gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals 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. 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.
DSG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 8.46%, DSG belongs to the top of the industry, outperforming 84.13% of the companies in the same industry.
The Return On Equity of DSG (9.91%) is better than 79.37% of its industry peers.
DSG has a Return On Invested Capital of 9.19%. This is in the better half of the industry: DSG outperforms 77.78% of its industry peers.
The Average Return On Invested Capital over the past 3 years for DSG is below the industry average of 11.54%.
The 3 year average ROIC (8.86%) for DSG is below the current ROIC(9.19%), indicating increased profibility in the last year.
| 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
The Profit Margin of DSG (21.70%) is better than 95.24% of its industry peers.
In the last couple of years the Profit Margin of DSG has grown nicely.
Looking at the Operating Margin, with a value of 27.36%, DSG belongs to the top of the industry, outperforming 95.24% of the companies in the same industry.
DSG's Operating Margin has improved in the last couple of years.
The Gross Margin of DSG (76.06%) is better than 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so DSG is destroying value.
Compared to 1 year ago, DSG has more shares outstanding
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 17.69 indicates that DSG is not in any danger for bankruptcy at the moment.
The Altman-Z score of DSG (17.69) is better than 90.48% of its industry peers.
DSG has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 17.69 |
ROIC/WACC0.93
WACC9.87%
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 comparable to the rest of the industry.
A Quick Ratio of 1.70 indicates that DSG should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.70, DSG perfoms like the industry average, 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.
DSG shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 30.86% yearly.
Looking at the last year, DSG shows a quite strong growth in Revenue. The Revenue has grown by 12.68% 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)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
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.
The Revenue is expected to grow by 10.60% on average over the next years. This is quite good.
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
Based on the Price/Earnings ratio of 48.69, the valuation of DSG can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of DSG indicates a somewhat cheap valuation: DSG is cheaper than 66.67% of the companies listed in the same industry.
DSG's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 26.15.
With a Price/Forward Earnings ratio of 30.66, DSG can be considered very expensive at the moment.
66.67% 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 similar valuation than the S&P500 average which is at 36.22.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 48.69 | ||
| Fwd PE | 30.66 |
4.2 Price Multiples
60.32% of the companies in the same industry are more expensive than DSG, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, DSG is valued a bit cheaper than 69.84% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.58 | ||
| EV/EBITDA | 25.22 |
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.
A more expensive valuation may be justified as DSG's earnings are expected to grow with 24.27% in the coming years.
PEG (NY)1.1
PEG (5Y)1.58
EPS Next 2Y27.62%
EPS Next 3Y24.27%
5. Dividend
5.1 Amount
DSG does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
TSX:DSG (12/2/2025, 7:00:00 PM)
115.39
+0.61 (+0.53%)
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 Cap9.92B
Revenue(TTM)684.78M
Net Income(TTM)148.63M
Analysts77.5
Price Target137.7 (19.33%)
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 | 48.69 | ||
| Fwd PE | 30.66 | ||
| P/S | 10.35 | ||
| P/FCF | 30.58 | ||
| P/OCF | 29.74 | ||
| P/B | 4.72 | ||
| P/tB | 45.03 | ||
| EV/EBITDA | 25.22 |
EPS(TTM)2.37
EY2.05%
EPS(NY)3.76
Fwd EY3.26%
FCF(TTM)3.77
FCFY3.27%
OCF(TTM)3.88
OCFY3.36%
SpS11.15
BVpS24.43
TBVpS2.56
PEG (NY)1.1
PEG (5Y)1.58
Graham Number36.09
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 | 17.69 |
F-Score7
WACC9.87%
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)14.19%
EPS 3Y18.17%
EPS 5Y30.86%
EPS Q2Q%7.5%
EPS Next Y44.21%
EPS Next 2Y27.62%
EPS Next 3Y24.27%
EPS Next 5Y21.92%
Revenue 1Y (TTM)12.68%
Revenue growth 3Y15.3%
Revenue growth 5Y14.85%
Sales Q2Q%10.05%
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.