We assign a fundamental rating of 7 out of 10 to DSGX. DSGX was compared to 278 industry peers in the Software industry. DSGX has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. DSGX is valued quite expensive, but it does show an excellent growth. These ratings could make DSGX a good candidate 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.
Each year in the past 5 years DSGX has been profitable.
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.
The Return On Equity of DSGX (10.02%) is better than 73.74% of its industry peers.
DSGX has a Return On Invested Capital of 9.58%. This is amongst the best in the industry. DSGX outperforms 83.81% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for DSGX is in line with the industry average of 10.73%.
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

Looking at the Profit Margin, with a value of 22.10%, DSGX belongs to the top of the industry, outperforming 85.61% of the companies in the same industry.
In the last couple of years the Profit Margin of DSGX has grown nicely.
DSGX has a Operating Margin of 28.79%. This is amongst the best in the industry. DSGX outperforms 92.45% of its industry peers.
DSGX's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 76.80%, DSGX is doing good in 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.
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

DSGX has an Altman-Z score of 15.73. This indicates that DSGX is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 15.73, DSGX belongs to the top of the industry, outperforming 95.32% of the companies in the same industry.
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	15.73

ROIC/WACC0.94

WACC10.21%

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's Current ratio of 1.83 is in line compared to the rest of the industry. DSGX outperforms 55.40% of its industry peers.
A Quick Ratio of 1.83 indicates that DSGX should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.83, DSGX perfoms like the industry average, outperforming 55.76% 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	1.83
Quick Ratio	1.83

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an nice 11.32% over the past year.
DSGX shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 30.86% yearly.
The Revenue has grown by 11.39% in the past year. This is quite good.
The Revenue has been growing by 14.85% on average over the past years. This is quite good.

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

DSGX is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 21.86% yearly.
The Revenue is expected to grow by 10.56% on average over the next years. This is quite good.

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.
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.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 42.24, DSGX can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Earnings ratio of DSGX is on the same level as its industry peers.
When comparing the Price/Earnings ratio of DSGX to the average of the S&P500 Index (28.30), we can say DSGX is valued slightly more expensively.
DSGX is valuated quite expensively with a Price/Forward Earnings ratio of 33.54.
DSGX's Price/Forward Earnings ratio is in line with the industry average.
When comparing the Price/Forward Earnings ratio of DSGX to the average of the S&P500 Index (25.57), we can say DSGX is valued slightly more expensively.

		Industry Rank	Sector Rank
PE	42.24
Fwd PE	33.54

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, DSGX is valued a bit cheaper than 73.74% of the companies in the same industry.
69.78% of the companies in the same industry are more expensive than DSGX, based on the Price/Free Cash Flow ratio.

		Industry Rank	Sector Rank
P/FCF	26.33
EV/EBITDA	21.58

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
DSGX has an outstanding profitability rating, which 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.