DESCARTES SYSTEMS GRP/THE (DSGX) Stock Fundamental Analysis
NASDAQ:DSGX - Nasdaq - CA2499061083 - Common Stock - Currency: USD
Overall DSGX gets a fundamental rating of 7 out of 10. We evaluated DSGX against 284 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 growing strongly while it is still valued neutral. This is a good 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.
DSGX had a positive operating cash flow in the past year.
In the past 5 years DSGX has always been profitable.
In the past 5 years DSGX always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of DSGX (8.47%) is better than 84.15% of its industry peers.
DSGX has a Return On Equity of 9.98%. This is in the better half of the industry: DSGX outperforms 78.52% of its industry peers.
DSGX's Return On Invested Capital of 9.06% is amongst the best of the industry. DSGX outperforms 85.21% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for DSGX is below the industry average of 12.36%.
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's Profit Margin of 21.67% is amongst the best of the industry. DSGX outperforms 89.44% of its industry peers.
In the last couple of years the Profit Margin of DSGX has grown nicely.
The Operating Margin of DSGX (26.69%) is better than 92.61% of its industry peers.
In the last couple of years the Operating Margin of DSGX has grown nicely.
DSGX has a better Gross Margin (75.63%) than 68.31% 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 | 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), DSGX is creating some value.
Compared to 1 year ago, DSGX has more shares outstanding
Compared to 5 years ago, DSGX has more shares outstanding
DSGX 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
DSGX has an Altman-Z score of 21.32. This indicates that DSGX is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 21.32, DSGX belongs to the top of the industry, outperforming 94.72% 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 | 21.32 |
ROIC/WACC1.15
WACC7.86%
2.3 Liquidity
DSGX has a Current 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 Current ratio of 1.35. This is comparable to the rest of the industry: DSGX outperforms 42.96% of its industry peers.
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.
Looking at the Quick ratio, with a value of 1.35, DSGX is in line with its industry, outperforming 43.31% of the companies in the same industry.
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
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
Looking at the last year, DSGX shows a quite strong growth in Revenue. The Revenue has grown by 13.74% in the last year.
DSGX shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.85% yearly.
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
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 Y17.47%
EPS Next 2Y29.89%
EPS Next 3Y23.99%
EPS Next 5Y21.86%
Revenue Next Year10.28%
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.
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
DSGX is valuated quite expensively with a Price/Earnings ratio of 61.11.
DSGX's Price/Earnings is on the same level as the industry average.
DSGX's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 26.92.
A Price/Forward Earnings ratio of 36.44 indicates a quite expensive valuation of DSGX.
DSGX's Price/Forward Earnings ratio is in line with the industry average.
The average S&P500 Price/Forward Earnings ratio is at 21.49. DSGX is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 61.11 | ||
| Fwd PE | 36.44 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, DSGX is valued a bit cheaper than 73.24% 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 65.49% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 42.93 | ||
| EV/EBITDA | 33.03 |
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 23.99% in the coming years.
PEG (NY)3.5
PEG (5Y)1.98
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 |
NASDAQ:DSGX (6/27/2025, 8:02:44 PM)
101.44
-0.64 (-0.63%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners86.14%
Inst Owner Change-2.81%
Ins Owners0.26%
Ins Owner ChangeN/A
Market Cap8.68B
Analysts77.78
Price Target100.49 (-0.94%)
Short Float %1.16%
Short Ratio3.02
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)-2.97%
Min EPS beat(2)-6.41%
Max EPS beat(2)0.47%
EPS beat(4)2
Avg EPS beat(4)-0.81%
Min EPS beat(4)-6.41%
Max EPS beat(4)2.86%
EPS beat(8)4
Avg EPS beat(8)-2.1%
EPS beat(12)7
Avg EPS beat(12)0.81%
EPS beat(16)10
Avg EPS beat(16)1.31%
Revenue beat(2)0
Avg Revenue beat(2)-2.24%
Min Revenue beat(2)-2.69%
Max Revenue beat(2)-1.79%
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)0.78%
PT rev (3m)25.09%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.61%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.15%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.22%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.17%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 61.11 | ||
| Fwd PE | 36.44 | ||
| P/S | 12.99 | ||
| P/FCF | 42.93 | ||
| P/OCF | 41.52 | ||
| P/B | 5.98 | ||
| P/tB | 94.85 | ||
| EV/EBITDA | 33.03 |
EPS(TTM)1.66
EY1.64%
EPS(NY)2.78
Fwd EY2.74%
FCF(TTM)2.36
FCFY2.33%
OCF(TTM)2.44
OCFY2.41%
SpS7.81
BVpS16.96
TBVpS1.07
PEG (NY)3.5
PEG (5Y)1.98
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 | 21.32 |
F-Score6
WACC7.86%
ROIC/WACC1.15
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 Year10.28%
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%