DESCARTES SYSTEMS GRP/THE (DSGX)
CA2499061083 - Common Stock
DSGX gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 276 industry peers in the Software industry. DSGX scores excellent points on both the profitability and health parts. This is a solid base for a good stock. DSGX is not overvalued while it is showing excellent growth. This is an interesting combination. These ratings would make DSGX suitable for growth and quality investing!
1. Profitability
1.1 Basic Checks
In the past year DSGX was profitable.
In the past year DSGX had a positive cash flow from operations.
In the past 5 years DSGX has always been profitable.
Each year in the past 5 years DSGX had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 7.86%, DSGX belongs to the top of the industry, outperforming 87.23% of the companies in the same industry.
DSGX's Return On Equity of 9.36% is amongst the best of the industry. DSGX outperforms 83.58% of its industry peers.
The Return On Invested Capital of DSGX (8.64%) is better than 87.96% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for DSGX is in line with the industry average of 10.10%.
The 3 year average ROIC (8.30%) for DSGX is below the current ROIC(8.64%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.86% | ||
| ROE | 9.36% | ||
| ROIC | 8.64% |
ROA(3y)7.64%
ROA(5y)6.35%
ROE(3y)9.1%
ROE(5y)7.5%
ROIC(3y)8.3%
ROIC(5y)7.07%
1.3 Margins
Looking at the Profit Margin, with a value of 20.23%, DSGX belongs to the top of the industry, outperforming 90.15% of the companies in the same industry.
DSGX's Profit Margin has improved in the last couple of years.
DSGX has a better Operating Margin (25.04%) than 94.53% of its industry peers.
In the last couple of years the Operating Margin of DSGX has grown nicely.
The Gross Margin of DSGX (75.86%) is better than 71.17% of its industry peers.
In the last couple of years the Gross Margin of DSGX has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.04% | ||
| PM (TTM) | 20.23% | ||
| GM | 75.86% |
OM growth 3Y6.52%
OM growth 5Y8.82%
PM growth 3Y10.63%
PM growth 5Y12.21%
GM growth 3Y0.73%
GM growth 5Y0.84%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so DSGX is destroying value.
The number of shares outstanding for DSGX has been increased compared to 1 year ago.
DSGX has more shares outstanding than it did 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
An Altman-Z score of 21.54 indicates that DSGX is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 21.54, DSGX belongs to the best of the industry, outperforming 96.72% of the companies in the same industry.
DSGX 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 | 21.54 |
ROIC/WACC0.98
WACC8.8%
2.3 Liquidity
A Current Ratio of 2.05 indicates that DSGX has no problem at all paying its short term obligations.
DSGX has a Current ratio of 2.05. This is in the better half of the industry: DSGX outperforms 60.58% of its industry peers.
DSGX has a Quick Ratio of 2.05. This indicates that DSGX is financially healthy and has no problem in meeting its short term obligations.
DSGX has a Quick ratio of 2.05. This is in the better half of the industry: DSGX outperforms 61.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.05 | ||
| Quick Ratio | 2.05 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 12.61% over the past year.
The Earnings Per Share has been growing by 26.97% on average over the past years. This is a very strong growth
DSGX shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 17.88%.
Measured over the past years, DSGX shows a quite strong growth in Revenue. The Revenue has been growing by 15.80% on average per year.
EPS 1Y (TTM)12.61%
EPS 3Y30.06%
EPS 5Y26.97%
EPS growth Q2Q8.82%
Revenue 1Y (TTM)17.88%
Revenue growth 3Y18%
Revenue growth 5Y15.8%
Revenue growth Q2Q18.45%
3.2 Future
DSGX is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 20.86% yearly.
Based on estimates for the next years, DSGX will show a quite strong growth in Revenue. The Revenue will grow by 11.88% on average per year.
EPS Next Y22.81%
EPS Next 2Y21.52%
EPS Next 3Y22.46%
EPS Next 5Y20.86%
Revenue Next Year9.51%
Revenue Next 2Y10.92%
Revenue Next 3Y12.22%
Revenue Next 5Y11.88%
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
The Price/Earnings ratio is 70.33, which means the current valuation is very expensive for DSGX.
The rest of the industry has a similar Price/Earnings ratio as DSGX.
DSGX's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 24.92.
DSGX is valuated quite expensively with a Price/Forward Earnings ratio of 58.14.
The rest of the industry has a similar Price/Forward Earnings ratio as DSGX.
When comparing the Price/Forward Earnings ratio of DSGX to the average of the S&P500 Index (21.49), we can say DSGX is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 70.33 | ||
| Fwd PE | 58.14 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, DSGX is valued a bit cheaper than 75.91% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, DSGX is valued a bit cheaper than the industry average as 67.52% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 39.72 | ||
| EV/EBITDA | 36.9 |
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.
The excellent profitability rating of DSGX may justify a higher PE ratio.
A more expensive valuation may be justified as DSGX's earnings are expected to grow with 22.46% in the coming years.
PEG (NY)3.08
PEG (5Y)2.61
EPS Next 2Y21.52%
EPS Next 3Y22.46%
5. Dividend
5.1 Amount
No dividends for DSGX!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
DESCARTES SYSTEMS GRP/THE
NASDAQ:DSGX (4/26/2024, 7:00:02 PM)
After market: 94.24 0 (0%)94.24
-0.26 (-0.28%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
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Market Cap8.03B
Analysts
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Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 70.33 | ||
| Fwd PE | 58.14 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
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OCF(TTM)
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SpS
BVpS
TBVpS
PEG (NY)3.08
PEG (5Y)2.61
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.86% | ||
| ROE | 9.36% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 25.04% | ||
| PM (TTM) | 20.23% | ||
| GM | 75.86% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.39
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 2.05 | ||
| Quick Ratio | 2.05 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)12.61%
EPS 3Y30.06%
EPS 5Y
EPS growth Q2Q
EPS Next Y22.81%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)17.88%
Revenue growth 3Y18%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
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