DESCARTES SYSTEMS GRP/THE (DSGX) Stock Fundamental Analysis
USA - NASDAQ:DSGX - CA2499061083 - Common Stock
103.35 USD
+1.5 (+1.47%)
103.35 USD
0 (0%)
We assign a fundamental rating of 7 out of 10 to DSGX. DSGX was compared to 279 industry peers in the Software industry. DSGX gets an excellent profitability rating and is at the same time showing great financial health properties. DSGX is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one! This makes DSGX very considerable for growth and quality investing!
1. Profitability
1.1 Basic Checks
DSGX had positive earnings in the past year.
DSGX had a positive operating cash flow in the past year.
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's Return On Assets of 8.44% is amongst the best of the industry. DSGX outperforms 83.51% of its industry peers.
The Return On Equity of DSGX (9.88%) is better than 77.06% of its industry peers.
Looking at the Return On Invested Capital, with a value of 9.18%, DSGX belongs to the top of the industry, outperforming 82.08% of the companies in the same industry.
DSGX had an Average Return On Invested Capital over the past 3 years of 8.86%. This is below the industry average of 11.86%.
The 3 year average ROIC (8.86%) for DSGX 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
The Profit Margin of DSGX (21.64%) is better than 87.10% 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 27.33%, DSGX belongs to the top of the industry, outperforming 91.04% of the companies in the same industry.
In the last couple of years the Operating Margin of DSGX has grown nicely.
The Gross Margin of DSGX (76.06%) is better than 70.97% of its industry peers.
DSGX's Gross Margin has been stable in the last couple of years.
| 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
DSGX has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for DSGX has been increased compared to 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 21.69. This indicates that DSGX is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of DSGX (21.69) is better than 93.55% of its industry peers.
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 | 21.69 |
ROIC/WACC0.86
WACC10.63%
2.3 Liquidity
DSGX has a Current Ratio of 1.70. This is a normal value and indicates that DSGX is financially healthy and should not expect problems in meeting its short term obligations.
DSGX's Current ratio of 1.70 is in line compared to the rest of the industry. DSGX outperforms 53.76% of its industry peers.
A Quick Ratio of 1.70 indicates that DSGX should not have too much problems paying its short term obligations.
DSGX has a Quick ratio (1.70) which is in line with its industry peers.
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 | 1.7 | ||
| Quick Ratio | 1.7 |
3. Growth
3.1 Past
DSGX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 14.19%, which is quite good.
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 12.68%.
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
DSGX is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 21.86% yearly.
Based on estimates for the next years, DSGX will show a quite strong growth in Revenue. The Revenue will grow by 10.56% on average per year.
EPS Next Y13.83%
EPS Next 2Y29.89%
EPS Next 3Y23.99%
EPS Next 5Y21.86%
Revenue Next Year10.19%
Revenue Next 2Y11.81%
Revenue Next 3Y10.16%
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.
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 61.15, which means the current valuation is very expensive for DSGX.
DSGX's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 27.41, DSGX is valued quite expensively.
The Price/Forward Earnings ratio is 37.13, which means the current valuation is very expensive for DSGX.
DSGX's Price/Forward Earnings is on the same level as the industry average.
DSGX's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 22.87.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 61.15 | ||
| Fwd PE | 37.13 |
4.2 Price Multiples
DSGX's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. DSGX is cheaper than 73.84% of the companies in the same industry.
66.67% of the companies in the same industry are more expensive than DSGX, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 38.39 | ||
| EV/EBITDA | 31.58 |
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)4.42
PEG (5Y)1.98
EPS Next 2Y29.89%
EPS Next 3Y23.99%
5. Dividend
5.1 Amount
DSGX does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
103.35
+1.5 (+1.47%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners86.14%
Inst Owner Change-11.1%
Ins Owners0.26%
Ins Owner ChangeN/A
Market Cap8.88B
Analysts77.78
Price Target99.59 (-3.64%)
Short Float %0.93%
Short Ratio1.7
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)-2.06%
PT rev (3m)-0.89%
EPS NQ rev (1m)-4.52%
EPS NQ rev (3m)-9.78%
EPS NY rev (1m)0%
EPS NY rev (3m)-3.09%
Revenue NQ rev (1m)1.98%
Revenue NQ rev (3m)-1.59%
Revenue NY rev (1m)0.9%
Revenue NY rev (3m)-0.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 61.15 | ||
| Fwd PE | 37.13 | ||
| P/S | 12.97 | ||
| P/FCF | 38.39 | ||
| P/OCF | 37.34 | ||
| P/B | 5.92 | ||
| P/tB | 56.44 | ||
| EV/EBITDA | 31.58 |
EPS(TTM)1.69
EY1.64%
EPS(NY)2.78
Fwd EY2.69%
FCF(TTM)2.69
FCFY2.6%
OCF(TTM)2.77
OCFY2.68%
SpS7.97
BVpS17.45
TBVpS1.83
PEG (NY)4.42
PEG (5Y)1.98
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 | 21.69 |
F-Score7
WACC10.63%
ROIC/WACC0.86
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 Y13.83%
EPS Next 2Y29.89%
EPS Next 3Y23.99%
EPS Next 5Y21.86%
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 3Y10.16%
Revenue Next 5Y10.56%
EBIT growth 1Y21.74%
EBIT growth 3Y19.76%
EBIT growth 5Y27.58%
EBIT Next Year72.43%
EBIT Next 3Y29.63%
EBIT Next 5Y23.13%
FCF growth 1Y17.77%
FCF growth 3Y7.45%
FCF growth 5Y16.41%
OCF growth 1Y17.48%
OCF growth 3Y7.57%
OCF growth 5Y16.02%