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 281 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 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.
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.
Each year in the past 5 years DSGX had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 8.70%, DSGX belongs to the best of the industry, outperforming 83.27% of the companies in the same industry.
DSGX has a better Return On Equity (10.34%) than 77.22% of its industry peers.
With an excellent Return On Invested Capital value of 9.32%, DSGX belongs to the best of the industry, outperforming 84.70% 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 12.00%.
The last Return On Invested Capital (9.32%) for DSGX is above the 3 year average (8.86%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.7% | ||
| ROE | 10.34% | ||
| ROIC | 9.32% |
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 Profit Margin of 22.01%. This is amongst the best in the industry. DSGX outperforms 87.90% of its industry peers.
DSGX's Profit Margin has improved in the last couple of years.
The Operating Margin of DSGX (27.05%) is better than 93.95% of its industry peers.
In the last couple of years the Operating Margin of DSGX has grown nicely.
DSGX has a Gross Margin of 75.64%. This is in the better half of the industry: DSGX outperforms 70.46% 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 | 27.05% | ||
| PM (TTM) | 22.01% | ||
| GM | 75.64% |
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) just above the Cost of Capital (WACC), DSGX is creating some value.
Compared to 1 year ago, DSGX has more shares outstanding
The number of shares outstanding for DSGX has been increased compared to 5 years ago.
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 21.82 indicates that DSGX is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 21.82, DSGX belongs to the best of the industry, outperforming 95.73% 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 | 21.82 |
ROIC/WACC1.01
WACC9.26%
2.3 Liquidity
A Current Ratio of 1.62 indicates that DSGX should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.62, DSGX is in line with its industry, outperforming 48.40% of the companies in the same industry.
DSGX has a Quick Ratio of 1.62. This is a normal value and indicates that DSGX is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.62, DSGX is in line with its industry, outperforming 48.40% 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 | 1.62 | ||
| Quick Ratio | 1.62 |
3. Growth
3.1 Past
DSGX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 23.13%, which is quite impressive.
Measured over the past years, DSGX shows a very strong growth in Earnings Per Share. The EPS has been growing by 30.86% on average per year.
Looking at the last year, DSGX shows a quite strong growth in Revenue. The Revenue has grown by 13.63% 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)23.13%
EPS 3Y18.17%
EPS 5Y30.86%
EPS Q2Q%16.22%
Revenue 1Y (TTM)13.63%
Revenue growth 3Y15.3%
Revenue growth 5Y14.85%
Sales Q2Q%13.02%
3.2 Future
The Earnings Per Share is expected to grow by 22.68% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 10.68% on average over the next years. This is quite good.
EPS Next Y17.47%
EPS Next 2Y29.89%
EPS Next 3Y24.79%
EPS Next 5Y22.68%
Revenue Next Year10.28%
Revenue Next 2Y11.81%
Revenue Next 3Y10.83%
Revenue Next 5Y10.68%
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.
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
A Price/Earnings ratio of 63.55 indicates a quite expensive valuation of DSGX.
DSGX's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 28.78, DSGX is valued quite expensively.
Based on the Price/Forward Earnings ratio of 54.10, the valuation of DSGX can be described as expensive.
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 21.32, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 63.55 | ||
| Fwd PE | 54.1 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, DSGX is valued a bit cheaper than the industry average as 73.31% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of DSGX indicates a somewhat cheap valuation: DSGX is cheaper than 61.92% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 42.24 | ||
| EV/EBITDA | 35.05 |
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 24.79% in the coming years. This may justify a more expensive valuation.
PEG (NY)3.64
PEG (5Y)2.06
EPS Next 2Y29.89%
EPS Next 3Y24.79%
5. Dividend
5.1 Amount
DSGX does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NASDAQ:DSGX (4/28/2025, 1:16:23 PM)
104.86
-0.69 (-0.65%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners88.23%
Inst Owner Change-0.85%
Ins Owners0.26%
Ins Owner ChangeN/A
Market Cap8.98B
Analysts77.78
Price Target99.64 (-4.98%)
Short Float %1.14%
Short Ratio2.91
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)2
Avg EPS beat(2)1.66%
Min EPS beat(2)0.47%
Max EPS beat(2)2.86%
EPS beat(4)3
Avg EPS beat(4)1.1%
Min EPS beat(4)-0.16%
Max EPS beat(4)2.86%
EPS beat(8)5
Avg EPS beat(8)-1.19%
EPS beat(12)8
Avg EPS beat(12)1.72%
EPS beat(16)11
Avg EPS beat(16)3.26%
Revenue beat(2)1
Avg Revenue beat(2)-0.3%
Min Revenue beat(2)-2.69%
Max Revenue beat(2)2.1%
Revenue beat(4)2
Avg Revenue beat(4)-0.17%
Min Revenue beat(4)-2.69%
Max Revenue beat(4)2.1%
Revenue beat(8)5
Avg Revenue beat(8)-0.04%
Revenue beat(12)8
Avg Revenue beat(12)0.36%
Revenue beat(16)12
Avg Revenue beat(16)0.95%
PT rev (1m)29.48%
PT rev (3m)28.59%
EPS NQ rev (1m)-0.29%
EPS NQ rev (3m)-7.05%
EPS NY rev (1m)-0.15%
EPS NY rev (3m)-4.56%
Revenue NQ rev (1m)0.27%
Revenue NQ rev (3m)1.05%
Revenue NY rev (1m)-1.17%
Revenue NY rev (3m)-1.02%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 63.55 | ||
| Fwd PE | 54.1 | ||
| P/S | 13.79 | ||
| P/FCF | 42.24 | ||
| P/OCF | 40.94 | ||
| P/B | 6.48 | ||
| P/tB | 64.59 | ||
| EV/EBITDA | 35.05 |
EPS(TTM)1.65
EY1.57%
EPS(NY)1.94
Fwd EY1.85%
FCF(TTM)2.48
FCFY2.37%
OCF(TTM)2.56
OCFY2.44%
SpS7.6
BVpS16.18
TBVpS1.62
PEG (NY)3.64
PEG (5Y)2.06
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.7% | ||
| ROE | 10.34% | ||
| ROCE | 12.31% | ||
| ROIC | 9.32% | ||
| ROICexc | 11.17% | ||
| ROICexgc | N/A | ||
| OM | 27.05% | ||
| PM (TTM) | 22.01% | ||
| GM | 75.64% | ||
| FCFM | 32.65% |
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 Turnover0.4
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 8.99% | ||
| Cap/Sales | 1.04% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 87.33% | ||
| Profit Quality | 148.34% | ||
| Current Ratio | 1.62 | ||
| Quick Ratio | 1.62 | ||
| Altman-Z | 21.82 |
F-Score6
WACC9.26%
ROIC/WACC1.01
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)23.13%
EPS 3Y18.17%
EPS 5Y30.86%
EPS Q2Q%16.22%
EPS Next Y17.47%
EPS Next 2Y29.89%
EPS Next 3Y24.79%
EPS Next 5Y22.68%
Revenue 1Y (TTM)13.63%
Revenue growth 3Y15.3%
Revenue growth 5Y14.85%
Sales Q2Q%13.02%
Revenue Next Year10.28%
Revenue Next 2Y11.81%
Revenue Next 3Y10.83%
Revenue Next 5Y10.68%
EBIT growth 1Y22.74%
EBIT growth 3Y19.76%
EBIT growth 5Y27.58%
EBIT Next Year73.83%
EBIT Next 3Y30.66%
EBIT Next 5Y23.89%
FCF growth 1Y5.15%
FCF growth 3Y7.45%
FCF growth 5Y16.41%
OCF growth 1Y5.58%
OCF growth 3Y7.57%
OCF growth 5Y16.02%