DESCARTES SYSTEMS GRP/THE (DSGX) Stock Fundamental Analysis
USA - NASDAQ:DSGX - CA2499061083 - Common Stock
79.88 USD
+0.5 (+0.63%)
79.88 USD
0 (0%)
We assign a fundamental rating of 7 out of 10 to DSGX. DSGX was compared to 281 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 not overvalued while it is showing excellent growth. This is an interesting combination. These ratings could make DSGX a good candidate for growth and quality investing.
1. Profitability
1.1 Basic Checks
DSGX had positive earnings in the past year.
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.
1.2 Ratios
Looking at the Return On Assets, with a value of 8.46%, DSGX belongs to the top of the industry, outperforming 81.14% of the companies in the same industry.
DSGX's Return On Equity of 9.91% is fine compared to the rest of the industry. DSGX outperforms 75.44% of its industry peers.
The Return On Invested Capital of DSGX (9.19%) is better than 82.56% of its industry peers.
The Average Return On Invested Capital over the past 3 years for DSGX is below the industry average of 12.04%.
The last Return On Invested Capital (9.19%) for DSGX is above the 3 year average (8.86%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.46% | ||
| ROE | 9.91% | ||
| ROIC | 9.19% |
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
Looking at the Profit Margin, with a value of 21.70%, DSGX belongs to the top of the industry, outperforming 86.48% of the companies in the same industry.
DSGX's Profit Margin has improved in the last couple of years.
DSGX's Operating Margin of 27.36% is amongst the best of the industry. DSGX outperforms 90.75% of its industry peers.
In the last couple of years the Operating Margin of DSGX has grown nicely.
DSGX has a better Gross Margin (76.06%) than 70.82% of its industry peers.
DSGX's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 27.36% | ||
| PM (TTM) | 21.7% | ||
| 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), DSGX is destroying value.
DSGX has more shares outstanding than it did 1 year ago.
The number of shares outstanding for DSGX has been increased compared to 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
DSGX has an Altman-Z score of 17.17. This indicates that DSGX is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 17.17, DSGX belongs to the best of the industry, outperforming 94.31% of the companies in the same industry.
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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 17.17 |
ROIC/WACC0.91
WACC10.15%
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 54.09% of its industry peers.
A Quick Ratio of 1.70 indicates that DSGX should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.70, DSGX perfoms like the industry average, outperforming 54.45% 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 | 1.7 | ||
| Quick Ratio | 1.7 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 14.19% over the past year.
DSGX shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 30.86% yearly.
Looking at the last year, DSGX shows a quite strong growth in Revenue. The Revenue has grown by 12.68% in the last year.
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 21.92% 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 10.60% on average per year.
EPS Next Y10.91%
EPS Next 2Y15.63%
EPS Next 3Y24.27%
EPS Next 5Y21.92%
Revenue Next Year10.23%
Revenue Next 2Y10.74%
Revenue Next 3Y10.27%
Revenue Next 5Y10.6%
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.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 47.27 indicates a quite expensive valuation of DSGX.
The rest of the industry has a similar Price/Earnings ratio as DSGX.
DSGX is valuated expensively when we compare the Price/Earnings ratio to 25.07, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 36.21 indicates a quite expensive valuation of DSGX.
The rest of the industry has a similar Price/Forward Earnings ratio as DSGX.
When comparing the Price/Forward Earnings ratio of DSGX to the average of the S&P500 Index (34.08), we can say DSGX is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 47.27 | ||
| Fwd PE | 36.21 |
4.2 Price Multiples
DSGX's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. DSGX is cheaper than 75.09% 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 70.82% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.63 | ||
| EV/EBITDA | 24.4 |
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.
DSGX's earnings are expected to grow with 24.27% in the coming years. This may justify a more expensive valuation.
PEG (NY)4.33
PEG (5Y)1.53
EPS Next 2Y15.63%
EPS Next 3Y24.27%
5. Dividend
5.1 Amount
No dividends for DSGX!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
79.88
+0.5 (+0.63%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners92.55%
Inst Owner Change5.81%
Ins Owners0.26%
Ins Owner ChangeN/A
Market Cap6.86B
Revenue(TTM)684.78M
Net Income(TTM)148.63M
Analysts77.5
Price Target98.8 (23.69%)
Short Float %0.91%
Short Ratio1.37
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%
PT rev (3m)-2.83%
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)0.94%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 47.27 | ||
| Fwd PE | 36.21 | ||
| P/S | 10.02 | ||
| P/FCF | 29.63 | ||
| P/OCF | 28.82 | ||
| P/B | 4.58 | ||
| P/tB | 43.62 | ||
| EV/EBITDA | 24.4 |
EPS(TTM)1.69
EY2.12%
EPS(NY)2.21
Fwd EY2.76%
FCF(TTM)2.7
FCFY3.38%
OCF(TTM)2.77
OCFY3.47%
SpS7.97
BVpS17.45
TBVpS1.83
PEG (NY)4.33
PEG (5Y)1.53
Graham Number25.76
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.46% | ||
| ROE | 9.91% | ||
| ROCE | 12.13% | ||
| ROIC | 9.19% | ||
| ROICexc | 10.88% | ||
| ROICexgc | N/A | ||
| OM | 27.36% | ||
| PM (TTM) | 21.7% | ||
| GM | 76.06% | ||
| FCFM | 33.84% |
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 | 88.32% | ||
| Profit Quality | 155.89% | ||
| Current Ratio | 1.7 | ||
| Quick Ratio | 1.7 | ||
| Altman-Z | 17.17 |
F-Score7
WACC10.15%
ROIC/WACC0.91
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 3Y24.27%
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 3Y10.27%
Revenue Next 5Y10.6%
EBIT growth 1Y21.76%
EBIT growth 3Y19.76%
EBIT growth 5Y27.58%
EBIT Next Year72.41%
EBIT Next 3Y29.84%
EBIT Next 5Y23.17%
FCF growth 1Y17.98%
FCF growth 3Y7.45%
FCF growth 5Y16.41%
OCF growth 1Y17.68%
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 4 / 10 to DESCARTES SYSTEMS GRP/THE (DSGX). This can be considered as Fairly Valued.
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.