DESCARTES SYSTEMS GRP/THE (DSGX) Stock Fundamental Analysis
NASDAQ:DSGX - Nasdaq - CA2499061083 - Common Stock - Currency: USD
Taking everything into account, DSGX scores 7 out of 10 in our fundamental rating. DSGX was compared to 282 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 not priced too expensively while it is growing strongly. Keep and eye on this one! This makes DSGX very considerable 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.
Each year in the past 5 years DSGX has been profitable.
Each year in the past 5 years DSGX had a positive operating cash flow.
1.2 Ratios
DSGX's Return On Assets of 8.47% is amongst the best of the industry. DSGX outperforms 83.33% of its industry peers.
DSGX has a better Return On Equity (9.98%) than 78.01% of its industry peers.
The Return On Invested Capital of DSGX (9.06%) is better than 85.11% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for DSGX is below the industry average of 12.15%.
The last Return On Invested Capital (9.06%) for DSGX is above the 3 year average (8.86%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.47% | ||
| ROE | 9.98% | ||
| ROIC | 9.06% |
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
DSGX has a better Profit Margin (21.67%) than 89.72% of its industry peers.
DSGX's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 26.69%, DSGX belongs to the top of the industry, outperforming 92.55% of the companies in the same industry.
DSGX's Operating Margin has improved in the last couple of years.
DSGX has a better Gross Margin (75.63%) than 68.79% of its industry peers.
DSGX's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.69% | ||
| PM (TTM) | 21.67% | ||
| GM | 75.63% |
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 DSGX is destroying value.
The number of shares outstanding for DSGX has been increased compared to 1 year ago.
Compared to 5 years ago, DSGX has more shares outstanding
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 22.36. This indicates that DSGX is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 22.36, DSGX belongs to the best of the industry, outperforming 93.97% 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 | 22.36 |
ROIC/WACC0.97
WACC9.33%
2.3 Liquidity
A Current Ratio of 1.35 indicates that DSGX should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.35, DSGX is in line with its industry, outperforming 42.55% of the companies in the same industry.
DSGX has a Quick Ratio of 1.35. This is a normal value and indicates that DSGX is financially healthy and should not expect problems in meeting its short term obligations.
DSGX has a Quick ratio of 1.35. This is comparable to the rest of the industry: DSGX outperforms 43.26% of its industry peers.
The current and quick ratio evaluation for DSGX is rather negative, while it does have 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 | 1.35 | ||
| Quick Ratio | 1.35 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 18.57% over the past year.
Measured over the past years, DSGX shows a very strong growth in Earnings Per Share. The EPS has been growing by 30.86% on average per year.
DSGX shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.74%.
Measured over the past years, DSGX shows a quite strong growth in Revenue. The Revenue has been growing by 14.85% on average per year.
EPS 1Y (TTM)18.57%
EPS 3Y18.17%
EPS 5Y30.86%
EPS Q2Q%2.5%
Revenue 1Y (TTM)13.74%
Revenue growth 3Y15.3%
Revenue growth 5Y14.85%
Sales Q2Q%11.49%
3.2 Future
Based on estimates for the next years, DSGX will show a very strong growth in Earnings Per Share. The EPS will grow by 21.86% on average per year.
DSGX is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.56% yearly.
EPS Next Y17.47%
EPS Next 2Y29.89%
EPS Next 3Y23.99%
EPS Next 5Y21.86%
Revenue Next Year9.21%
Revenue Next 2Y11.81%
Revenue Next 3Y10.67%
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.
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 64.84.
DSGX's Price/Earnings ratio is in line with the industry average.
DSGX is valuated expensively when we compare the Price/Earnings ratio to 27.03, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 38.66, the valuation of DSGX can be described as expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of DSGX is on the same level as its industry peers.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.28, DSGX is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 64.84 | ||
| Fwd PE | 38.66 |
4.2 Price Multiples
DSGX's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. DSGX is cheaper than 70.92% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, DSGX is valued a bit cheaper than 63.12% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 45.64 | ||
| EV/EBITDA | 34.77 |
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 23.99% in the coming years.
PEG (NY)3.71
PEG (5Y)2.1
EPS Next 2Y29.89%
EPS Next 3Y23.99%
5. Dividend
5.1 Amount
No dividends for DSGX!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
107.63
+1.17 (+1.1%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners86.14%
Inst Owner Change-0.5%
Ins Owners0.26%
Ins Owner ChangeN/A
Market Cap9.23B
Analysts77.78
Price Target100.4 (-6.72%)
Short Float %1.38%
Short Ratio2.84
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)1
Avg EPS beat(2)-3.18%
Min EPS beat(2)-6.83%
Max EPS beat(2)0.47%
EPS beat(4)2
Avg EPS beat(4)-0.92%
Min EPS beat(4)-6.83%
Max EPS beat(4)2.86%
EPS beat(8)4
Avg EPS beat(8)-2.15%
EPS beat(12)7
Avg EPS beat(12)0.77%
EPS beat(16)10
Avg EPS beat(16)1.28%
Revenue beat(2)0
Avg Revenue beat(2)-2.23%
Min Revenue beat(2)-2.69%
Max Revenue beat(2)-1.77%
Revenue beat(4)2
Avg Revenue beat(4)-0.34%
Min Revenue beat(4)-2.69%
Max Revenue beat(4)2.1%
Revenue beat(8)4
Avg Revenue beat(8)-0.29%
Revenue beat(12)7
Avg Revenue beat(12)0.11%
Revenue beat(16)11
Avg Revenue beat(16)0.45%
PT rev (1m)-0.09%
PT rev (3m)0.77%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-7.71%
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)-0.25%
Revenue NQ rev (3m)-1.58%
Revenue NY rev (1m)-0.97%
Revenue NY rev (3m)-0.97%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 64.84 | ||
| Fwd PE | 38.66 | ||
| P/S | 13.81 | ||
| P/FCF | 45.64 | ||
| P/OCF | 44.15 | ||
| P/B | 6.36 | ||
| P/tB | 100.84 | ||
| EV/EBITDA | 34.77 |
EPS(TTM)1.66
EY1.54%
EPS(NY)2.78
Fwd EY2.59%
FCF(TTM)2.36
FCFY2.19%
OCF(TTM)2.44
OCFY2.27%
SpS7.79
BVpS16.93
TBVpS1.07
PEG (NY)3.71
PEG (5Y)2.1
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.47% | ||
| ROE | 9.98% | ||
| ROCE | 11.96% | ||
| ROIC | 9.06% | ||
| ROICexc | 10.27% | ||
| ROICexgc | N/A | ||
| OM | 26.69% | ||
| PM (TTM) | 21.67% | ||
| GM | 75.63% | ||
| FCFM | 30.27% |
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 Turnover0.39
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 8.64% | ||
| Cap/Sales | 1.02% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 81.2% | ||
| Profit Quality | 139.66% | ||
| Current Ratio | 1.35 | ||
| Quick Ratio | 1.35 | ||
| Altman-Z | 22.36 |
F-Score6
WACC9.33%
ROIC/WACC0.97
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 3Y23.99%
EPS Next 5Y21.86%
Revenue 1Y (TTM)13.74%
Revenue growth 3Y15.3%
Revenue growth 5Y14.85%
Sales Q2Q%11.49%
Revenue Next Year9.21%
Revenue Next 2Y11.81%
Revenue Next 3Y10.67%
Revenue Next 5Y10.56%
EBIT growth 1Y22.43%
EBIT growth 3Y19.76%
EBIT growth 5Y27.58%
EBIT Next Year72.43%
EBIT Next 3Y30.11%
EBIT Next 5Y23.13%
FCF growth 1Y5.81%
FCF growth 3Y7.45%
FCF growth 5Y16.41%
OCF growth 1Y6.26%
OCF growth 3Y7.57%
OCF growth 5Y16.02%