DESCARTES SYSTEMS GRP/THE (DSGX) Stock Fundamental Analysis
NASDAQ:DSGX - Nasdaq - CA2499061083 - Common Stock - Currency: USD
Taking everything into account, DSGX scores 7 out of 10 in our fundamental rating. DSGX was compared to 282 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 not priced too expensively while it is growing strongly. Keep and eye on this one! With these ratings, DSGX could be worth investigating further 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.
DSGX had positive earnings in each of the past 5 years.
In the past 5 years DSGX always reported a positive cash flow from operatings.
1.2 Ratios
With an excellent Return On Assets value of 8.47%, DSGX belongs to the best of the industry, outperforming 84.04% of the companies in the same industry.
With a decent Return On Equity value of 9.98%, DSGX is doing good in the industry, outperforming 78.37% of the companies in the same industry.
The Return On Invested Capital of DSGX (9.06%) is better than 85.11% of its industry peers.
DSGX had an Average Return On Invested Capital over the past 3 years of 8.86%. This is below the industry average of 12.26%.
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
Looking at the Profit Margin, with a value of 21.67%, DSGX belongs to the top of the industry, outperforming 89.36% of the companies in the same industry.
DSGX's Profit Margin has improved in the last couple of years.
DSGX has a better Operating Margin (26.69%) than 92.55% of its industry peers.
DSGX's Operating Margin has improved in the last couple of years.
DSGX's Gross Margin of 75.63% is fine compared to the rest of the industry. DSGX outperforms 68.09% 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
DSGX has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, DSGX has more shares outstanding
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.
2.2 Solvency
An Altman-Z score of 21.90 indicates that DSGX is not in any danger for bankruptcy at the moment.
DSGX has a better Altman-Z score (21.90) than 93.97% of its industry peers.
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 | 21.9 |
ROIC/WACC0.92
WACC9.84%
2.3 Liquidity
A Current Ratio of 1.35 indicates that DSGX should not have too much problems paying its short term obligations.
With a Current ratio value of 1.35, DSGX perfoms like the industry average, outperforming 42.91% of the companies in the same industry.
A Quick Ratio of 1.35 indicates that DSGX should not have too much problems paying its short term obligations.
DSGX's Quick ratio of 1.35 is in line compared to the rest of the industry. DSGX outperforms 43.26% 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 | 1.35 | ||
| Quick Ratio | 1.35 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 18.57% 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
Looking at the last year, DSGX shows a quite strong growth in Revenue. The Revenue has grown by 13.74% in the last year.
Measured over the past years, DSGX shows a quite strong growth in Revenue. The Revenue has been growing by 14.85% on average per year.
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
The Earnings Per Share is expected to grow by 21.86% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 10.56% on average over the next years. This is quite good.
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
The Price/Earnings ratio is 62.88, which means the current valuation is very expensive for DSGX.
Compared to the rest of the industry, the Price/Earnings ratio of DSGX is on the same level as its industry peers.
The average S&P500 Price/Earnings ratio is at 27.45. DSGX is valued rather expensively when compared to this.
A Price/Forward Earnings ratio of 37.50 indicates a quite expensive valuation of DSGX.
The rest of the industry has a similar Price/Forward Earnings ratio as DSGX.
DSGX is valuated expensively when we compare the Price/Forward Earnings ratio to 21.90, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 62.88 | ||
| Fwd PE | 37.5 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, DSGX is valued a bit cheaper than 73.05% 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 65.60% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 44.17 | ||
| EV/EBITDA | 34.01 |
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)3.6
PEG (5Y)2.04
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 |
104.38
+2.82 (+2.78%)
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 Cap8.94B
Analysts77.78
Price Target100.49 (-3.73%)
Short Float %1.2%
Short Ratio3
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 | 62.88 | ||
| Fwd PE | 37.5 | ||
| P/S | 13.37 | ||
| P/FCF | 44.17 | ||
| P/OCF | 42.73 | ||
| P/B | 6.15 | ||
| P/tB | 97.6 | ||
| EV/EBITDA | 34.01 |
EPS(TTM)1.66
EY1.59%
EPS(NY)2.78
Fwd EY2.67%
FCF(TTM)2.36
FCFY2.26%
OCF(TTM)2.44
OCFY2.34%
SpS7.81
BVpS16.96
TBVpS1.07
PEG (NY)3.6
PEG (5Y)2.04
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 | 21.9 |
F-Score6
WACC9.84%
ROIC/WACC0.92
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%