DESCARTES SYSTEMS GRP/THE (DSGX) Stock Fundamental Analysis
USA - NASDAQ:DSGX - CA2499061083 - Common Stock
84.84 USD
-3.38 (-3.83%)
84.84 USD
0 (0%)
We assign a fundamental rating of 7 out of 10 to DSGX. DSGX was compared to 284 industry peers in the Software industry. Both the health and profitability get an excellent rating, making DSGX a very profitable company, without any liquidiy or solvency issues. DSGX is valued quite expensively, but it does show have an excellent growth rating. 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.
In the past year DSGX had a positive cash flow from operations.
In the past 5 years DSGX has always been profitable.
DSGX had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 8.44%, DSGX belongs to the best of the industry, outperforming 83.45% of the companies in the same industry.
With a decent Return On Equity value of 9.88%, DSGX is doing good in the industry, outperforming 77.11% of the companies in the same industry.
With an excellent Return On Invested Capital value of 9.18%, DSGX belongs to the best of the industry, outperforming 82.75% of the companies in the same industry.
DSGX had an Average Return On Invested Capital over the past 3 years of 8.86%. This is below the industry average of 11.83%.
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 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
The Profit Margin of DSGX (21.64%) is better than 86.62% of its industry peers.
DSGX's Profit Margin has improved in the last couple of years.
The Operating Margin of DSGX (27.33%) is better than 90.49% of its industry peers.
DSGX's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 76.06%, DSGX is doing good in the industry, outperforming 70.77% of the companies in the same industry.
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 | 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), 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
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 18.95. This indicates that DSGX is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of DSGX (18.95) is better than 94.01% 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 | 18.95 |
ROIC/WACC0.9
WACC10.18%
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.
DSGX has a Current ratio of 1.70. This is comparable to the rest of the industry: DSGX outperforms 54.23% 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's Quick ratio of 1.70 is in line compared to the rest of the industry. DSGX outperforms 54.58% 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
DSGX shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 12.68%.
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)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
The Earnings Per Share is expected to grow by 21.92% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 10.60% on average over the next years. This is quite good.
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
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
DSGX is valuated quite expensively with a Price/Earnings ratio of 50.20.
DSGX's Price/Earnings ratio is in line with the industry average.
DSGX's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 26.03.
With a Price/Forward Earnings ratio of 38.46, DSGX can be considered very expensive at the moment.
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 22.27, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 50.2 | ||
| Fwd PE | 38.46 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, DSGX is valued a bit cheaper than 76.76% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, DSGX is valued a bit cheaper than 69.01% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.52 | ||
| EV/EBITDA | 27.24 |
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.
A more expensive valuation may be justified as DSGX's earnings are expected to grow with 18.07% in the coming years.
PEG (NY)4.6
PEG (5Y)1.63
EPS Next 2Y15.63%
EPS Next 3Y18.07%
5. Dividend
5.1 Amount
DSGX does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
84.84
-3.38 (-3.83%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners92.55%
Inst Owner Change-4.27%
Ins Owners0.26%
Ins Owner ChangeN/A
Market Cap7.29B
Revenue(TTM)684.78M
Net Income(TTM)148.19M
Analysts77.78
Price Target98.8 (16.45%)
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)0.94%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 50.2 | ||
| Fwd PE | 38.46 | ||
| P/S | 10.65 | ||
| P/FCF | 31.52 | ||
| P/OCF | 30.66 | ||
| P/B | 4.86 | ||
| P/tB | 46.33 | ||
| EV/EBITDA | 27.24 |
EPS(TTM)1.69
EY1.99%
EPS(NY)2.21
Fwd EY2.6%
FCF(TTM)2.69
FCFY3.17%
OCF(TTM)2.77
OCFY3.26%
SpS7.97
BVpS17.45
TBVpS1.83
PEG (NY)4.6
PEG (5Y)1.63
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 | 18.95 |
F-Score7
WACC10.18%
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.