DESCARTES SYSTEMS GRP/THE (DSGX) Stock Fundamental Analysis
USA - NASDAQ:DSGX - CA2499061083 - Common Stock
95.93 USD
-0.35 (-0.36%)
95.93 USD
0 (0%)
We assign a fundamental rating of 7 out of 10 to DSGX. DSGX was compared to 285 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 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
DSGX had positive earnings in the past year.
DSGX had a positive operating cash flow in the past year.
In the past 5 years DSGX has always been profitable.
In the past 5 years DSGX always reported a positive cash flow from operatings.
1.2 Ratios
DSGX's Return On Assets of 8.44% is amongst the best of the industry. DSGX outperforms 83.51% of its industry peers.
DSGX has a better Return On Equity (9.88%) than 77.19% of its industry peers.
Looking at the Return On Invested Capital, with a value of 9.18%, DSGX belongs to the top of the industry, outperforming 82.46% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for DSGX is below the industry average of 11.90%.
The 3 year average ROIC (8.86%) for DSGX is below the current ROIC(9.18%), indicating increased profibility in the last year.
| 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
DSGX has a Profit Margin of 21.64%. This is amongst the best in the industry. DSGX outperforms 87.02% of its industry peers.
In the last couple of years the Profit Margin of DSGX has grown nicely.
The Operating Margin of DSGX (27.33%) is better than 90.88% 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 70.53% 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 | 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so DSGX is destroying value.
DSGX has more shares outstanding than it did 1 year ago.
DSGX has more shares outstanding than it did 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
DSGX has an Altman-Z score of 20.50. This indicates that DSGX is financially healthy and has little risk of bankruptcy at the moment.
DSGX has a better Altman-Z score (20.50) than 94.04% 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 | 20.5 |
ROIC/WACC0.9
WACC10.23%
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 (1.70) which is in line with its industry peers.
DSGX has a Quick 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.
With a Quick ratio value of 1.70, DSGX perfoms like the industry average, outperforming 55.09% of the companies in the same industry.
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 | 1.7 | ||
| Quick Ratio | 1.7 |
3. Growth
3.1 Past
DSGX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 14.19%, which is quite good.
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
The Earnings Per Share is expected to grow by 21.92% on average over the next years. This is a very strong growth
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 Y11.02%
EPS Next 2Y29.89%
EPS Next 3Y24.27%
EPS Next 5Y21.92%
Revenue Next Year10.19%
Revenue Next 2Y11.81%
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
With a Price/Earnings ratio of 56.76, DSGX can be considered very expensive at the moment.
DSGX's Price/Earnings is on the same level as the industry average.
DSGX's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 27.69.
A Price/Forward Earnings ratio of 34.46 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 (23.18), we can say DSGX is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 56.76 | ||
| Fwd PE | 34.46 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, DSGX is valued a bit cheaper than 74.04% of the companies in the same industry.
DSGX's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. DSGX is cheaper than 69.12% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 35.64 | ||
| EV/EBITDA | 29.7 |
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)5.15
PEG (5Y)1.84
EPS Next 2Y29.89%
EPS Next 3Y24.27%
5. Dividend
5.1 Amount
No dividends for DSGX!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
95.93
-0.35 (-0.36%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners92.55%
Inst Owner Change-0.33%
Ins Owners0.26%
Ins Owner ChangeN/A
Market Cap8.24B
Analysts77.78
Price Target98.8 (2.99%)
Short Float %0.82%
Short Ratio1.44
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%
EPS NQ rev (3m)-4.52%
EPS NY rev (1m)-2.47%
EPS NY rev (3m)-5.49%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.15%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 56.76 | ||
| Fwd PE | 34.46 | ||
| P/S | 12.04 | ||
| P/FCF | 35.64 | ||
| P/OCF | 34.67 | ||
| P/B | 5.5 | ||
| P/tB | 52.39 | ||
| EV/EBITDA | 29.7 |
EPS(TTM)1.69
EY1.76%
EPS(NY)2.78
Fwd EY2.9%
FCF(TTM)2.69
FCFY2.81%
OCF(TTM)2.77
OCFY2.88%
SpS7.97
BVpS17.45
TBVpS1.83
PEG (NY)5.15
PEG (5Y)1.84
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%
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-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 | 20.5 |
F-Score7
WACC10.23%
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 Y11.02%
EPS Next 2Y29.89%
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 Year10.19%
Revenue Next 2Y11.81%
Revenue Next 3Y10.27%
Revenue Next 5Y10.6%
EBIT growth 1Y21.74%
EBIT growth 3Y19.76%
EBIT growth 5Y27.58%
EBIT Next Year73.8%
EBIT Next 3Y29.84%
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%