DESCARTES SYSTEMS GRP/THE (DSG.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:DSG - CA2499061083 - Common Stock
118.7 CAD
+0.55 (+0.47%)
We assign a fundamental rating of 7 out of 10 to DSG. DSG was compared to 64 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 showing excellent growth while it is valued at reasonable prices. Keep and eye on this one! This makes DSG very considerable for growth and quality investing!
1. Profitability
1.1 Basic Checks
In the past year DSG was profitable.
In the past year DSG had a positive cash flow from operations.
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 8.54% is amongst the best of the industry. DSG outperforms 87.50% of its industry peers.
DSG has a Return On Equity of 10.02%. This is amongst the best in the industry. DSG outperforms 81.25% of its industry peers.
The Return On Invested Capital of DSG (9.58%) is better than 84.38% of its industry peers.
The Average Return On Invested Capital over the past 3 years for DSG is below the industry average of 11.99%.
The 3 year average ROIC (8.86%) for DSG is below the current ROIC(9.58%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.54% | ||
| ROE | 10.02% | ||
| ROIC | 9.58% |
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 22.10%. This is amongst the best in the industry. DSG outperforms 95.31% of its industry peers.
DSG's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 28.79%, DSG belongs to the top of the industry, outperforming 98.44% of the companies in the same industry.
In the last couple of years the Operating Margin of DSG has grown nicely.
DSG has a better Gross Margin (76.80%) than 85.94% of its industry peers.
DSG's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 28.79% | ||
| PM (TTM) | 22.1% | ||
| GM | 76.8% |
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.
The number of shares outstanding for DSG has been increased compared to 1 year ago.
The number of shares outstanding for DSG has been increased compared to 5 years ago.
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
DSG has an Altman-Z score of 17.72. This indicates that DSG is financially healthy and has little risk of bankruptcy at the moment.
DSG has a Altman-Z score of 17.72. This is amongst the best in the industry. DSG outperforms 93.75% 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 | 17.72 |
ROIC/WACC0.96
WACC9.95%
2.3 Liquidity
DSG has a Current Ratio of 1.83. 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 1.83. This is in the better half of the industry: DSG outperforms 64.06% of its industry peers.
A Quick Ratio of 1.83 indicates that DSG should not have too much problems paying its short term obligations.
DSG has a better Quick ratio (1.83) than 64.06% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.83 | ||
| Quick Ratio | 1.83 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 11.32% over the past year.
DSG shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 30.86% yearly.
The Revenue has grown by 11.39% 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)11.32%
EPS 3Y18.17%
EPS 5Y30.86%
EPS Q2Q%19.05%
Revenue 1Y (TTM)11.39%
Revenue growth 3Y15.3%
Revenue growth 5Y14.85%
Sales Q2Q%11.23%
3.2 Future
DSG is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 21.92% yearly.
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 Y13.72%
EPS Next 2Y16.22%
EPS Next 3Y17.6%
EPS Next 5Y21.92%
Revenue Next Year10.76%
Revenue Next 2Y10.85%
Revenue Next 3Y10.9%
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
The Price/Earnings ratio is 48.65, which means the current valuation is very expensive for DSG.
Based on the Price/Earnings ratio, DSG is valued a bit cheaper than 73.44% of the companies in the same industry.
When comparing the Price/Earnings ratio of DSG to the average of the S&P500 Index (26.92), we can say DSG is valued expensively.
A Price/Forward Earnings ratio of 38.57 indicates a quite expensive valuation of DSG.
68.75% of the companies in the same industry are more expensive than DSG, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.57, DSG is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 48.65 | ||
| Fwd PE | 38.57 |
4.2 Price Multiples
67.19% of the companies in the same industry are more expensive than DSG, based on the Enterprise Value to EBITDA ratio.
DSG's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. DSG is cheaper than 73.44% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.27 | ||
| EV/EBITDA | 24.67 |
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 17.60% in the coming years.
PEG (NY)3.54
PEG (5Y)1.58
EPS Next 2Y16.22%
EPS Next 3Y17.6%
5. Dividend
5.1 Amount
No dividends for DSG!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
TSX:DSG (1/7/2026, 7:00:00 PM)
118.7
+0.55 (+0.47%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners86.36%
Inst Owner ChangeN/A
Ins Owners0.21%
Ins Owner ChangeN/A
Market Cap10.21B
Revenue(TTM)703.71M
Net Income(TTM)155.53M
Analysts77.5
Price Target137.7 (16.01%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
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)2.72%
Min EPS beat(2)-1.85%
Max EPS beat(2)7.29%
EPS beat(4)2
Avg EPS beat(4)-0.23%
Min EPS beat(4)-6.83%
Max EPS beat(4)7.29%
EPS beat(8)5
Avg EPS beat(8)0.38%
EPS beat(12)7
Avg EPS beat(12)0.32%
EPS beat(16)9
Avg EPS beat(16)0.57%
Revenue beat(2)2
Avg Revenue beat(2)0.98%
Min Revenue beat(2)0.67%
Max Revenue beat(2)1.29%
Revenue beat(4)2
Avg Revenue beat(4)-0.63%
Min Revenue beat(4)-2.69%
Max Revenue beat(4)1.29%
Revenue beat(8)5
Avg Revenue beat(8)0.18%
Revenue beat(12)8
Avg Revenue beat(12)0.02%
Revenue beat(16)11
Avg Revenue beat(16)0.39%
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)-0.3%
EPS NQ rev (3m)0.6%
EPS NY rev (1m)2.54%
EPS NY rev (3m)2.44%
Revenue NQ rev (1m)0.42%
Revenue NQ rev (3m)0.76%
Revenue NY rev (1m)0.48%
Revenue NY rev (3m)0.51%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 48.65 | ||
| Fwd PE | 38.57 | ||
| P/S | 10.5 | ||
| P/FCF | 30.27 | ||
| P/OCF | 29.5 | ||
| P/B | 4.76 | ||
| P/tB | 40.09 | ||
| EV/EBITDA | 24.67 |
EPS(TTM)2.44
EY2.06%
EPS(NY)3.08
Fwd EY2.59%
FCF(TTM)3.92
FCFY3.3%
OCF(TTM)4.02
OCFY3.39%
SpS11.3
BVpS24.92
TBVpS2.96
PEG (NY)3.54
PEG (5Y)1.58
Graham Number36.99
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.54% | ||
| ROE | 10.02% | ||
| ROCE | 12.65% | ||
| ROIC | 9.58% | ||
| ROICexc | 11.59% | ||
| ROICexgc | N/A | ||
| OM | 28.79% | ||
| PM (TTM) | 22.1% | ||
| GM | 76.8% | ||
| FCFM | 34.7% |
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-Score6
Asset Turnover0.39
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 7.46% | ||
| Cap/Sales | 0.91% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 86.93% | ||
| Profit Quality | 157% | ||
| Current Ratio | 1.83 | ||
| Quick Ratio | 1.83 | ||
| Altman-Z | 17.72 |
F-Score6
WACC9.95%
ROIC/WACC0.96
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 Y13.72%
EPS Next 2Y16.22%
EPS Next 3Y17.6%
EPS Next 5Y21.92%
Revenue 1Y (TTM)11.39%
Revenue growth 3Y15.3%
Revenue growth 5Y14.85%
Sales Q2Q%11.23%
Revenue Next Year10.76%
Revenue Next 2Y10.85%
Revenue Next 3Y10.9%
Revenue Next 5Y10.6%
EBIT growth 1Y21.35%
EBIT growth 3Y19.76%
EBIT growth 5Y27.58%
EBIT Next Year74.96%
EBIT Next 3Y31.1%
EBIT Next 5Y23.17%
FCF growth 1Y21.44%
FCF growth 3Y7.45%
FCF growth 5Y16.41%
OCF growth 1Y20.72%
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.
What is the valuation status for DSG stock?
ChartMill assigns a valuation rating of 4 / 10 to DESCARTES SYSTEMS GRP/THE (DSG.CA). This can be considered as Fairly Valued.
How profitable is DESCARTES SYSTEMS GRP/THE (DSG.CA) stock?
DESCARTES SYSTEMS GRP/THE (DSG.CA) has a profitability rating of 9 / 10.
What are the PE and PB ratios of DESCARTES SYSTEMS GRP/THE (DSG.CA) stock?
The Price/Earnings (PE) ratio for DESCARTES SYSTEMS GRP/THE (DSG.CA) is 48.65 and the Price/Book (PB) ratio is 4.76.
Can you provide the expected EPS growth for DSG stock?
The Earnings per Share (EPS) of DESCARTES SYSTEMS GRP/THE (DSG.CA) is expected to grow by 13.72% in the next year.