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DESCARTES SYSTEMS GRP/THE (DSGX) Stock Fundamental Analysis

USA - NASDAQ:DSGX - CA2499061083 - Common Stock

100.98 USD
-0.88 (-0.86%)
Last: 9/17/2025, 10:36:37 AM
Fundamental Rating

7

We assign a fundamental rating of 7 out of 10 to DSGX. DSGX was compared to 280 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 growing strongly while it is still valued neutral. This is a good combination! These ratings could make DSGX a good candidate for growth and quality investing.


Dividend Valuation Growth Profitability Health

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8

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.
DSGX had a positive operating cash flow in each of the past 5 years.
DSGX Yearly Net Income VS EBIT VS OCF VS FCFDSGX Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 50M 100M 150M 200M

1.2 Ratios

DSGX has a better Return On Assets (8.44%) than 83.57% of its industry peers.
DSGX has a better Return On Equity (9.88%) than 77.14% of its industry peers.
DSGX has a better Return On Invested Capital (9.18%) than 82.14% of its industry peers.
The Average Return On Invested Capital over the past 3 years for DSGX is below the industry average of 11.85%.
The last Return On Invested Capital (9.18%) for DSGX is above the 3 year average (8.86%), which is a sign of increasing profitability.
Industry RankSector 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%
DSGX Yearly ROA, ROE, ROICDSGX Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2 4 6 8 10

1.3 Margins

With an excellent Profit Margin value of 21.64%, DSGX belongs to the best of the industry, outperforming 87.14% of the companies in the same industry.
In the last couple of years the Profit Margin of DSGX has grown nicely.
Looking at the Operating Margin, with a value of 27.33%, DSGX belongs to the top of the industry, outperforming 91.07% of the companies in the same industry.
In the last couple of years the Operating Margin of DSGX has grown nicely.
DSGX's Gross Margin of 76.06% is fine compared to the rest of the industry. DSGX outperforms 70.71% of its industry peers.
DSGX's Gross Margin has been stable in the last couple of years.
Industry RankSector 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%
DSGX Yearly Profit, Operating, Gross MarginsDSGX Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 20 40 60

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8

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.
DSGX Yearly Shares OutstandingDSGX Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 20M 40M 60M 80M
DSGX Yearly Total Debt VS Total AssetsDSGX Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 500M 1B 1.5B

2.2 Solvency

An Altman-Z score of 21.70 indicates that DSGX is not in any danger for bankruptcy at the moment.
DSGX's Altman-Z score of 21.70 is amongst the best of the industry. DSGX outperforms 93.93% 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 RankSector Rank
Debt/Equity 0
Debt/FCF 0
Altman-Z 21.7
ROIC/WACC0.88
WACC10.43%
DSGX Yearly LT Debt VS Equity VS FCFDSGX Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 200M 400M 600M 800M 1B

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.
The Current ratio of DSGX (1.70) is comparable to the rest of the industry.
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.
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 RankSector Rank
Current Ratio 1.7
Quick Ratio 1.7
DSGX Yearly Current Assets VS Current LiabilitesDSGX Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 100M 200M 300M 400M

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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.
The Earnings Per Share has been growing by 30.86% 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 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

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.
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

Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of 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.
DSGX Yearly Revenue VS EstimatesDSGX Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 500M 1B
DSGX Yearly EPS VS EstimatesDSGX Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2 4 6

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4

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 59.75 indicates a quite expensive valuation of 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 27.20.
DSGX is valuated quite expensively with a Price/Forward Earnings ratio of 36.27.
DSGX's Price/Forward Earnings is on the same level as the industry average.
DSGX is valuated expensively when we compare the Price/Forward Earnings ratio to 22.71, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 59.75
Fwd PE 36.27
DSGX Price Earnings VS Forward Price EarningsDSGX Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40 50

4.2 Price Multiples

DSGX's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. DSGX is cheaper than 73.57% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of DSGX indicates a somewhat cheap valuation: DSGX is cheaper than 67.14% of the companies listed in the same industry.
Industry RankSector Rank
P/FCF 37.51
EV/EBITDA 31.58
DSGX Per share dataDSGX EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 5 10 15

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)4.32
PEG (5Y)1.94
EPS Next 2Y29.89%
EPS Next 3Y23.99%

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0

5. Dividend

5.1 Amount

No dividends for DSGX!.
Industry RankSector Rank
Dividend Yield N/A

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DESCARTES SYSTEMS GRP/THE

NASDAQ:DSGX (9/17/2025, 10:36:37 AM)

100.98

-0.88 (-0.86%)

Chartmill FA Rating
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)09-03 2025-09-03/amc
Earnings (Next)12-01 2025-12-01/amc
Inst Owners86.14%
Inst Owner Change-11.1%
Ins Owners0.26%
Ins Owner ChangeN/A
Market Cap8.68B
Analysts77.78
Price Target99.59 (-1.38%)
Short Float %0.93%
Short Ratio1.7
Dividend
Industry RankSector 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)-0.74%
EPS NQ rev (1m)-4.52%
EPS NQ rev (3m)-9.78%
EPS NY rev (1m)-3.09%
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 RankSector Rank
PE 59.75
Fwd PE 36.27
P/S 12.67
P/FCF 37.51
P/OCF 36.49
P/B 5.79
P/tB 55.14
EV/EBITDA 31.58
EPS(TTM)1.69
EY1.67%
EPS(NY)2.78
Fwd EY2.76%
FCF(TTM)2.69
FCFY2.67%
OCF(TTM)2.77
OCFY2.74%
SpS7.97
BVpS17.45
TBVpS1.83
PEG (NY)4.32
PEG (5Y)1.94
Profitability
Industry RankSector 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 RankSector 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 21.7
F-Score7
WACC10.43%
ROIC/WACC0.88
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%