DESCARTES SYSTEMS GRP/THE (DSG.CA) Stock Fundamental Analysis
Canada - TSX:DSG - CA2499061083 - Common Stock
130.99 CAD
+2.11 (+1.64%)
We assign a fundamental rating of 7 out of 10 to DSG. DSG was compared to 63 industry peers in the Software industry. DSG has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. DSG is not priced too expensively while it is growing strongly. 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
DSG had positive earnings in the past year.
In the past year DSG had a positive cash flow from operations.
Each year in the past 5 years DSG has been profitable.
DSG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
DSG has a Return On Assets of 8.44%. This is amongst the best in the industry. DSG outperforms 84.13% of its industry peers.
The Return On Equity of DSG (9.88%) is better than 79.37% of its industry peers.
DSG has a Return On Invested Capital of 9.18%. This is amongst the best in the industry. DSG outperforms 80.95% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for DSG is below the industry average of 12.35%.
The 3 year average ROIC (8.86%) for DSG is below the current ROIC(9.18%), indicating increased profibility in the last year.
| 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 has a Profit Margin of 21.64%. This is amongst the best in the industry. DSG outperforms 93.65% of its industry peers.
DSG's Profit Margin has improved in the last couple of years.
DSG's Operating Margin of 27.33% is amongst the best of the industry. DSG outperforms 96.83% of its industry peers.
In the last couple of years the Operating Margin of DSG has grown nicely.
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), DSG is destroying 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
An Altman-Z score of 20.07 indicates that DSG is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 20.07, DSG belongs to the top of the industry, outperforming 88.89% 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 | 20.07 |
ROIC/WACC0.87
WACC10.52%
2.3 Liquidity
A Current Ratio of 1.70 indicates that DSG should not have too much problems paying its short term obligations.
With a Current ratio value of 1.70, DSG perfoms like the industry average, outperforming 58.73% of the companies in the same industry.
A Quick Ratio of 1.70 indicates that DSG should not have too much problems paying its short term obligations.
DSG has a Quick ratio (1.70) which is in line with its industry peers.
DSG does not score too well on the current and quick ratio evaluation. However, as it has 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
The Earnings Per Share has grown by an nice 14.19% over the past year.
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.
The Revenue has grown by 12.68% in the past year. This is quite good.
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
The Earnings Per Share is expected to grow by 21.92% on average over the next years. This is a very strong growth
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 Y11.02%
EPS Next 2Y29.89%
EPS Next 3Y24.27%
EPS Next 5Y21.92%
Revenue Next Year10.19%
Revenue Next 2Y11.81%
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
With a Price/Earnings ratio of 55.50, DSG can be considered very expensive at the moment.
Based on the Price/Earnings ratio, DSG is valued a bit cheaper than 73.02% of the companies in the same industry.
When comparing the Price/Earnings ratio of DSG to the average of the S&P500 Index (27.86), we can say DSG is valued expensively.
The Price/Forward Earnings ratio is 33.69, which means the current valuation is very expensive for DSG.
68.25% 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 valuation a bit more expensive than the S&P500 average which is at 23.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 55.5 | ||
| Fwd PE | 33.69 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, DSG is valued a bit cheaper than the industry average as 65.08% of the companies are valued more expensively.
71.43% 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 | 34.85 | ||
| EV/EBITDA | 29.01 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive 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)5.04
PEG (5Y)1.8
EPS Next 2Y29.89%
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 (10/3/2025, 7:00:00 PM)
130.99
+2.11 (+1.64%)
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 Cap11.26B
Analysts77.78
Price Target137.7 (5.12%)
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)-4.52%
EPS NY rev (1m)-2.47%
EPS NY rev (3m)-5.49%
Revenue NQ rev (1m)1.98%
Revenue NQ rev (3m)1.15%
Revenue NY rev (1m)0.9%
Revenue NY rev (3m)-0.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 55.5 | ||
| Fwd PE | 33.69 | ||
| P/S | 11.77 | ||
| P/FCF | 34.85 | ||
| P/OCF | 33.89 | ||
| P/B | 5.37 | ||
| P/tB | 51.22 | ||
| EV/EBITDA | 29.01 |
EPS(TTM)2.36
EY1.8%
EPS(NY)3.89
Fwd EY2.97%
FCF(TTM)3.76
FCFY2.87%
OCF(TTM)3.86
OCFY2.95%
SpS11.13
BVpS24.38
TBVpS2.56
PEG (NY)5.04
PEG (5Y)1.8
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 | 20.07 |
F-Score7
WACC10.52%
ROIC/WACC0.87
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 Y11.02%
EPS Next 2Y29.89%
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 Year10.19%
Revenue Next 2Y11.81%
Revenue Next 3Y10.27%
Revenue Next 5Y10.6%
EBIT growth 1Y21.74%
EBIT growth 3Y19.76%
EBIT growth 5Y27.58%
EBIT Next Year73.8%
EBIT Next 3Y29.84%
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%