DESCARTES SYSTEMS GRP/THE (DSG.CA) Stock Fundamental Analysis
Canada - TSX:DSG - CA2499061083 - Common Stock
144.53 CAD
-3.4 (-2.3%)
We assign a fundamental rating of 6 out of 10 to DSG. DSG was compared to 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 showing excellent growth while it is valued at reasonable prices. Keep and eye on this one! With these ratings, DSG could be worth investigating further 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.
In the past 5 years DSG has always been profitable.
Each year in the past 5 years DSG had a positive operating cash flow.
1.2 Ratios
DSG has a better Return On Assets (8.44%) than 82.54% of its industry peers.
Looking at the Return On Equity, with a value of 9.88%, DSG is in the better half of the industry, outperforming 76.19% of the companies in the same industry.
The Return On Invested Capital of DSG (9.18%) is better than 80.95% 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 12.19%.
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
Looking at the Profit Margin, with a value of 21.64%, DSG belongs to the top of the industry, outperforming 92.06% of the companies in the same industry.
DSG's Profit Margin has improved in the last couple of years.
DSG has a Operating Margin of 27.33%. This is amongst the best in the industry. DSG outperforms 96.83% of its industry peers.
DSG's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 76.06%, DSG belongs to the top of the industry, outperforming 80.95% of the companies in the same industry.
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 | 27.33% | ||
| 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.
DSG has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, DSG has more shares outstanding
DSG has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
An Altman-Z score of 22.20 indicates that DSG is not in any danger for bankruptcy at the moment.
DSG's Altman-Z score of 22.20 is amongst the best of the industry. DSG outperforms 92.06% 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 | 22.2 |
ROIC/WACC0.86
WACC10.64%
2.3 Liquidity
A Current Ratio of 1.70 indicates that DSG should not have too much problems paying its short term obligations.
DSG's Current ratio of 1.70 is fine compared to the rest of the industry. DSG outperforms 60.32% of its industry peers.
DSG has a Quick 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 Quick ratio of 1.70. This is in the better half of the industry: DSG outperforms 60.32% of its industry peers.
| 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.
The Revenue has been growing by 14.85% on average over the past years. This is quite good.
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 21.86% 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 10.56% on average per year.
EPS Next Y13.83%
EPS Next 2Y29.89%
EPS Next 3Y23.99%
EPS Next 5Y21.86%
Revenue Next Year10.19%
Revenue Next 2Y11.81%
Revenue Next 3Y10.16%
Revenue Next 5Y10.56%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in 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
With a Price/Earnings ratio of 61.76, DSG can be considered very expensive at the moment.
68.25% of the companies in the same industry are more expensive than DSG, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 27.30, DSG is valued quite expensively.
DSG is valuated quite expensively with a Price/Forward Earnings ratio of 37.49.
Based on the Price/Forward Earnings ratio, DSG is valued a bit cheaper than the industry average as 68.25% of the companies are valued more expensively.
DSG is valuated expensively when we compare the Price/Forward Earnings ratio to 22.73, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 61.76 | ||
| Fwd PE | 37.49 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of DSG indicates a somewhat cheap valuation: DSG is cheaper than 63.49% of the companies listed in the same industry.
66.67% of the companies in the same industry are more expensive than DSG, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 38.77 | ||
| EV/EBITDA | 32.38 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
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 23.99% in the coming years.
PEG (NY)4.47
PEG (5Y)2
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 (9/12/2025, 7:00:00 PM)
144.53
-3.4 (-2.3%)
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 Cap12.42B
Analysts77.78
Price Target137.7 (-4.73%)
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)-4.52%
EPS NQ rev (3m)-9.78%
EPS NY rev (1m)-3.09%
EPS NY rev (3m)-3.09%
Revenue NQ rev (1m)1.98%
Revenue NQ rev (3m)-1.59%
Revenue NY rev (1m)0.9%
Revenue NY rev (3m)-0.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 61.76 | ||
| Fwd PE | 37.49 | ||
| P/S | 13.1 | ||
| P/FCF | 38.77 | ||
| P/OCF | 37.71 | ||
| P/B | 5.98 | ||
| P/tB | 56.99 | ||
| EV/EBITDA | 32.38 |
EPS(TTM)2.34
EY1.62%
EPS(NY)3.85
Fwd EY2.67%
FCF(TTM)3.73
FCFY2.58%
OCF(TTM)3.83
OCFY2.65%
SpS11.04
BVpS24.17
TBVpS2.54
PEG (NY)4.47
PEG (5Y)2
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%
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-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 | 22.2 |
F-Score7
WACC10.64%
ROIC/WACC0.86
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 Y13.83%
EPS Next 2Y29.89%
EPS Next 3Y23.99%
EPS Next 5Y21.86%
Revenue 1Y (TTM)12.68%
Revenue growth 3Y15.3%
Revenue growth 5Y14.85%
Sales Q2Q%10.05%
Revenue Next Year10.19%
Revenue Next 2Y11.81%
Revenue Next 3Y10.16%
Revenue Next 5Y10.56%
EBIT growth 1Y21.74%
EBIT growth 3Y19.76%
EBIT growth 5Y27.58%
EBIT Next Year72.43%
EBIT Next 3Y29.63%
EBIT Next 5Y23.13%
FCF growth 1Y17.77%
FCF growth 3Y7.45%
FCF growth 5Y16.41%
OCF growth 1Y17.48%
OCF growth 3Y7.57%
OCF growth 5Y16.02%