DESCARTES SYSTEMS GRP/THE (DSGX) Stock Fundamental Analysis
NASDAQ:DSGX - Nasdaq - CA2499061083 - Common Stock - Currency: USD
DSGX gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 283 industry peers in the Software industry. Both the health and profitability get an excellent rating, making DSGX a very profitable company, without any liquidiy or solvency issues. DSGX is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one! With these ratings, DSGX could be worth investigating further for growth and quality investing!.
1. Profitability
1.1 Basic Checks
DSGX had positive earnings in the past year.
In the past year DSGX had a positive cash flow from operations.
In the past 5 years DSGX has always been profitable.
DSGX had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
DSGX has a better Return On Assets (8.70%) than 83.75% of its industry peers.
With a decent Return On Equity value of 10.34%, DSGX is doing good in the industry, outperforming 78.45% of the companies in the same industry.
With an excellent Return On Invested Capital value of 9.32%, DSGX belongs to the best of the industry, outperforming 85.87% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for DSGX is below the industry average of 12.35%.
The last Return On Invested Capital (9.32%) for DSGX is above the 3 year average (8.86%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.7% | ||
| ROE | 10.34% | ||
| ROIC | 9.32% |
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
With an excellent Profit Margin value of 22.01%, DSGX belongs to the best of the industry, outperforming 89.75% of the companies in the same industry.
DSGX's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 27.05%, DSGX belongs to the top of the industry, outperforming 93.29% of the companies in the same industry.
DSGX's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 75.64%, DSGX is in the better half of the industry, outperforming 68.55% of the companies in the same industry.
DSGX's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 27.05% | ||
| PM (TTM) | 22.01% | ||
| GM | 75.64% |
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) just above the Cost of Capital (WACC), DSGX is creating some value.
DSGX has more shares outstanding than it did 1 year ago.
The number of shares outstanding for DSGX has been increased compared to 5 years ago.
There is no outstanding debt for DSGX. 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
DSGX has an Altman-Z score of 21.05. This indicates that DSGX is financially healthy and has little risk of bankruptcy at the moment.
DSGX's Altman-Z score of 21.05 is amongst the best of the industry. DSGX outperforms 94.35% of its industry peers.
There is no outstanding debt for DSGX. 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 | 21.05 |
ROIC/WACC1.09
WACC8.56%
2.3 Liquidity
A Current Ratio of 1.62 indicates that DSGX should not have too much problems paying its short term obligations.
DSGX has a Current ratio of 1.62. This is comparable to the rest of the industry: DSGX outperforms 49.82% of its industry peers.
A Quick Ratio of 1.62 indicates that DSGX should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.62, DSGX perfoms like the industry average, outperforming 49.82% of the companies in the same industry.
DSGX 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 | 1.62 | ||
| Quick Ratio | 1.62 |
3. Growth
3.1 Past
DSGX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 18.57%, which is quite good.
The Earnings Per Share has been growing by 30.86% on average over the past years. This is a very strong growth
The Revenue has grown by 13.63% 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)18.57%
EPS 3Y18.17%
EPS 5Y30.86%
EPS Q2Q%2.5%
Revenue 1Y (TTM)13.63%
Revenue growth 3Y15.3%
Revenue growth 5Y14.85%
Sales Q2Q%11.49%
3.2 Future
The Earnings Per Share is expected to grow by 22.68% on average over the next years. This is a very strong growth
DSGX is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.68% yearly.
EPS Next Y17.47%
EPS Next 2Y29.89%
EPS Next 3Y24.79%
EPS Next 5Y22.68%
Revenue Next Year10.28%
Revenue Next 2Y11.81%
Revenue Next 3Y10.84%
Revenue Next 5Y10.68%
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.
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
DSGX is valuated quite expensively with a Price/Earnings ratio of 61.60.
Compared to the rest of the industry, the Price/Earnings ratio of DSGX is on the same level as its industry peers.
When comparing the Price/Earnings ratio of DSGX to the average of the S&P500 Index (26.52), we can say DSGX is valued expensively.
With a Price/Forward Earnings ratio of 36.73, DSGX can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Forward Earnings ratio of DSGX is on the same level as its industry peers.
DSGX is valuated expensively when we compare the Price/Forward Earnings ratio to 22.25, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 61.6 | ||
| Fwd PE | 36.73 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, DSGX is valued a bit cheaper than 73.14% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of DSGX indicates a somewhat cheap valuation: DSGX is cheaper than 66.43% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 41.19 | ||
| EV/EBITDA | 33.7 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates DSGX does not grow enough to justify the current Price/Earnings ratio.
DSGX has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as DSGX's earnings are expected to grow with 24.79% in the coming years.
PEG (NY)3.53
PEG (5Y)2
EPS Next 2Y29.89%
EPS Next 3Y24.79%
5. Dividend
5.1 Amount
DSGX does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NASDAQ:DSGX (6/6/2025, 4:30:02 PM)
102.25
+0.65 (+0.64%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners88.23%
Inst Owner Change-2.8%
Ins Owners0.26%
Ins Owner ChangeN/A
Market Cap8.75B
Analysts77.78
Price Target100.33 (-1.88%)
Short Float %1.17%
Short Ratio3.6
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)2
Avg EPS beat(2)1.66%
Min EPS beat(2)0.47%
Max EPS beat(2)2.86%
EPS beat(4)3
Avg EPS beat(4)1.1%
Min EPS beat(4)-0.16%
Max EPS beat(4)2.86%
EPS beat(8)5
Avg EPS beat(8)-1.19%
EPS beat(12)8
Avg EPS beat(12)1.72%
EPS beat(16)11
Avg EPS beat(16)3.26%
Revenue beat(2)1
Avg Revenue beat(2)-0.3%
Min Revenue beat(2)-2.69%
Max Revenue beat(2)2.1%
Revenue beat(4)2
Avg Revenue beat(4)-0.17%
Min Revenue beat(4)-2.69%
Max Revenue beat(4)2.1%
Revenue beat(8)5
Avg Revenue beat(8)-0.04%
Revenue beat(12)8
Avg Revenue beat(12)0.36%
Revenue beat(16)12
Avg Revenue beat(16)0.95%
PT rev (1m)0.07%
PT rev (3m)28.74%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-6.22%
EPS NY rev (1m)0%
EPS NY rev (3m)-5.08%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.53%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.17%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 61.6 | ||
| Fwd PE | 36.73 | ||
| P/S | 13.45 | ||
| P/FCF | 41.19 | ||
| P/OCF | 39.92 | ||
| P/B | 6.32 | ||
| P/tB | 62.99 | ||
| EV/EBITDA | 33.7 |
EPS(TTM)1.66
EY1.62%
EPS(NY)2.78
Fwd EY2.72%
FCF(TTM)2.48
FCFY2.43%
OCF(TTM)2.56
OCFY2.5%
SpS7.6
BVpS16.18
TBVpS1.62
PEG (NY)3.53
PEG (5Y)2
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.7% | ||
| ROE | 10.34% | ||
| ROCE | 12.31% | ||
| ROIC | 9.32% | ||
| ROICexc | 11.17% | ||
| ROICexgc | N/A | ||
| OM | 27.05% | ||
| PM (TTM) | 22.01% | ||
| GM | 75.64% | ||
| FCFM | 32.65% |
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 Turnover0.4
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 8.99% | ||
| Cap/Sales | 1.04% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 87.33% | ||
| Profit Quality | 148.34% | ||
| Current Ratio | 1.62 | ||
| Quick Ratio | 1.62 | ||
| Altman-Z | 21.05 |
F-Score6
WACC8.56%
ROIC/WACC1.09
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 3Y24.79%
EPS Next 5Y22.68%
Revenue 1Y (TTM)13.63%
Revenue growth 3Y15.3%
Revenue growth 5Y14.85%
Sales Q2Q%11.49%
Revenue Next Year10.28%
Revenue Next 2Y11.81%
Revenue Next 3Y10.84%
Revenue Next 5Y10.68%
EBIT growth 1Y22.74%
EBIT growth 3Y19.76%
EBIT growth 5Y27.58%
EBIT Next Year72.43%
EBIT Next 3Y30.41%
EBIT Next 5Y23.88%
FCF growth 1Y5.15%
FCF growth 3Y7.45%
FCF growth 5Y16.41%
OCF growth 1Y5.58%
OCF growth 3Y7.57%
OCF growth 5Y16.02%