DESCARTES SYSTEMS GRP/THE (DSGX) Stock Fundamental Analysis
USA - NASDAQ:DSGX - CA2499061083 - Common Stock
96.58 USD
+1.06 (+1.11%)
96.58 USD
0 (0%)
We assign a fundamental rating of 7 out of 10 to DSGX. DSGX was compared to 285 industry peers in the Software industry. DSGX has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. DSGX is valued quite expensive, but it does show an excellent growth. 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.
DSGX had positive earnings in each of the past 5 years.
DSGX had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of DSGX (8.44%) is better than 83.51% of its industry peers.
Looking at the Return On Equity, with a value of 9.88%, DSGX is in the better half of the industry, outperforming 77.19% of the companies in the same industry.
The Return On Invested Capital of DSGX (9.18%) is better than 82.46% of its industry peers.
The Average Return On Invested Capital over the past 3 years for DSGX is below the industry average of 11.88%.
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
DSGX has a better Profit Margin (21.64%) than 87.02% of its industry peers.
DSGX's Profit Margin has improved in the last couple of years.
DSGX has a better Operating Margin (27.33%) than 90.53% of its industry peers.
DSGX's Operating Margin has improved in the last couple of years.
DSGX has a Gross Margin of 76.06%. This is in the better half of the industry: DSGX outperforms 70.53% 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so DSGX is destroying value.
Compared to 1 year ago, DSGX has more shares outstanding
DSGX has more shares outstanding than it did 5 years ago.
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
An Altman-Z score of 20.42 indicates that DSGX is not in any danger for bankruptcy at the moment.
The Altman-Z score of DSGX (20.42) is better than 94.04% 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 | 20.42 |
ROIC/WACC0.9
WACC10.2%
2.3 Liquidity
A Current Ratio of 1.70 indicates that DSGX should not have too much problems paying its short term obligations.
DSGX's Current ratio of 1.70 is in line compared to the rest of the industry. DSGX outperforms 54.39% 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 of 1.70. This is comparable to the rest of the industry: DSGX outperforms 55.09% 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 | 1.7 | ||
| Quick Ratio | 1.7 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 14.19% over the past year.
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 12.68% in the past year. This is quite good.
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)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
Based on estimates for the next years, DSGX will show a very strong growth in Earnings Per Share. The EPS will grow by 21.92% on average per year.
DSGX is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.60% yearly.
EPS Next Y10.91%
EPS Next 2Y15.63%
EPS Next 3Y18.07%
EPS Next 5Y21.92%
Revenue Next Year10.23%
Revenue Next 2Y10.74%
Revenue Next 3Y10.72%
Revenue Next 5Y10.6%
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 57.15.
DSGX's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of DSGX to the average of the S&P500 Index (27.08), we can say DSGX is valued expensively.
With a Price/Forward Earnings ratio of 43.78, DSGX can be considered very expensive at the moment.
The rest of the industry has a similar Price/Forward Earnings ratio as DSGX.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.09, DSGX is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 57.15 | ||
| Fwd PE | 43.78 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of DSGX indicates a somewhat cheap valuation: DSGX is cheaper than 74.39% of the companies listed in the same industry.
69.12% 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 | 35.88 | ||
| EV/EBITDA | 29.57 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of DSGX may justify a higher PE ratio.
DSGX's earnings are expected to grow with 18.07% in the coming years. This may justify a more expensive valuation.
PEG (NY)5.24
PEG (5Y)1.85
EPS Next 2Y15.63%
EPS Next 3Y18.07%
5. Dividend
5.1 Amount
No dividends for DSGX!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
96.58
+1.06 (+1.11%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners92.55%
Inst Owner Change-1.35%
Ins Owners0.26%
Ins Owner ChangeN/A
Market Cap8.30B
Revenue(TTM)684.78M
Net Income(TTM)148.19M
Analysts77.78
Price Target98.8 (2.3%)
Short Float %1.01%
Short Ratio1.76
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)-0.79%
PT rev (3m)-1.6%
EPS NQ rev (1m)-0.5%
EPS NQ rev (3m)-5%
EPS NY rev (1m)-0.1%
EPS NY rev (3m)-5.58%
Revenue NQ rev (1m)0.16%
Revenue NQ rev (3m)2.14%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)-0.04%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 57.15 | ||
| Fwd PE | 43.78 | ||
| P/S | 12.12 | ||
| P/FCF | 35.88 | ||
| P/OCF | 34.9 | ||
| P/B | 5.53 | ||
| P/tB | 52.74 | ||
| EV/EBITDA | 29.57 |
EPS(TTM)1.69
EY1.75%
EPS(NY)2.21
Fwd EY2.28%
FCF(TTM)2.69
FCFY2.79%
OCF(TTM)2.77
OCFY2.87%
SpS7.97
BVpS17.45
TBVpS1.83
PEG (NY)5.24
PEG (5Y)1.85
Graham Number25.76
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%
ROICexgc growth 3YN/A
ROICexgc 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 | 20.42 |
F-Score7
WACC10.2%
ROIC/WACC0.9
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 Y10.91%
EPS Next 2Y15.63%
EPS Next 3Y18.07%
EPS Next 5Y21.92%
Revenue 1Y (TTM)12.68%
Revenue growth 3Y15.3%
Revenue growth 5Y14.85%
Sales Q2Q%10.05%
Revenue Next Year10.23%
Revenue Next 2Y10.74%
Revenue Next 3Y10.72%
Revenue Next 5Y10.6%
EBIT growth 1Y21.74%
EBIT growth 3Y19.76%
EBIT growth 5Y27.58%
EBIT Next Year72.41%
EBIT Next 3Y30.03%
EBIT Next 5Y23.17%
FCF growth 1Y17.77%
FCF growth 3Y7.45%
FCF growth 5Y16.41%
OCF growth 1Y17.48%
OCF growth 3Y7.57%
OCF growth 5Y16.02%
DESCARTES SYSTEMS GRP/THE / DSGX FAQ
What is the ChartMill fundamental rating of DESCARTES SYSTEMS GRP/THE (DSGX) stock?
ChartMill assigns a fundamental rating of 7 / 10 to DSGX.
What is the valuation status of DESCARTES SYSTEMS GRP/THE (DSGX) stock?
ChartMill assigns a valuation rating of 3 / 10 to DESCARTES SYSTEMS GRP/THE (DSGX). This can be considered as Overvalued.
What is the profitability of DSGX stock?
DESCARTES SYSTEMS GRP/THE (DSGX) has a profitability rating of 8 / 10.
How financially healthy is DESCARTES SYSTEMS GRP/THE?
The financial health rating of DESCARTES SYSTEMS GRP/THE (DSGX) is 8 / 10.
What is the earnings growth outlook for DESCARTES SYSTEMS GRP/THE?
The Earnings per Share (EPS) of DESCARTES SYSTEMS GRP/THE (DSGX) is expected to grow by 10.91% in the next year.