Overall DSGX gets a fundamental rating of 7 out of 10. We evaluated DSGX against 278 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. This makes DSGX very considerable for growth and quality investing!

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

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.
DSGX had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

The Return On Assets of DSGX (8.54%) is better than 81.30% of its industry peers.
With a decent Return On Equity value of 10.02%, DSGX is doing good in the industry, outperforming 73.74% of the companies in the same industry.
With an excellent Return On Invested Capital value of 9.58%, DSGX belongs to the best of the industry, outperforming 83.45% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for DSGX is in line with the industry average of 10.76%.
The 3 year average ROIC (8.86%) for DSGX is below the current ROIC(9.58%), indicating increased profibility in the last year.

		Industry Rank	Sector Rank
ROA	8.54%
ROE	10.02%
ROIC	9.58%

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's Profit Margin of 22.10% is amongst the best of the industry. DSGX outperforms 85.61% of its industry peers.
DSGX's Profit Margin has improved in the last couple of years.
The Operating Margin of DSGX (28.79%) is better than 92.45% of its industry peers.
In the last couple of years the Operating Margin of DSGX has grown nicely.
Looking at the Gross Margin, with a value of 76.80%, DSGX is in the better half of the industry, outperforming 71.22% of the companies in the same industry.
DSGX's Gross Margin has been stable in the last couple of years.

		Industry Rank	Sector Rank
OM	28.79%
PM (TTM)	22.1%
GM	76.8%

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%

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ROA

ROE

ROIC

Operating and Profit Margin

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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.
DSGX has more shares outstanding than it did 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

An Altman-Z score of 17.10 indicates that DSGX is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 17.10, DSGX belongs to the top of the industry, outperforming 94.96% 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	17.1

ROIC/WACC0.93

WACC10.25%

2.3 Liquidity

DSGX has a Current Ratio of 1.83. 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 (1.83) which is comparable to the rest of the industry.
A Quick Ratio of 1.83 indicates that DSGX should not have too much problems paying its short term obligations.
DSGX has a Quick ratio of 1.83. This is comparable to the rest of the industry: DSGX outperforms 55.76% of its industry peers.
DSGX does not score too well on the current and quick ratio evaluation. However, as it has 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	1.83
Quick Ratio	1.83

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

DSGX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.32%, which is quite good.
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 11.39% in the last year.
DSGX shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.85% yearly.

EPS 1Y (TTM)11.32%

EPS 3Y18.17%

EPS 5Y30.86%

EPS Q2Q%19.05%

Revenue 1Y (TTM)11.39%

Revenue growth 3Y15.3%

Revenue growth 5Y14.85%

Sales Q2Q%11.23%

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 Y13.72%

EPS Next 2Y16.22%

EPS Next 3Y17.6%

EPS Next 5Y21.86%

Revenue Next Year10.76%

Revenue Next 2Y10.85%

Revenue Next 3Y10.9%

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.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 46.07, DSGX can be considered very expensive at the moment.
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 28.87.
Based on the Price/Forward Earnings ratio of 36.59, the valuation of DSGX can be described as expensive.
DSGX's Price/Forward Earnings ratio is in line with the industry average.
The average S&P500 Price/Forward Earnings ratio is at 25.96. DSGX is valued slightly more expensive when compared to this.

		Industry Rank	Sector Rank
PE	46.07
Fwd PE	36.59

4.2 Price Multiples

73.02% of the companies in the same industry are more expensive than DSGX, based on the Enterprise Value to EBITDA ratio.
DSGX's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. DSGX is cheaper than 69.06% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	28.72
EV/EBITDA	23.71

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 17.60% in the coming years. This may justify a more expensive valuation.