DESCARTES SYSTEMS GRP/THE (DSGX) Stock Fundamental Analysis
USA - NASDAQ:DSGX - CA2499061083 - Common Stock
83.365 USD
+1.05 (+1.28%)
83.365 USD
0 (0%)
Overall DSGX gets a fundamental rating of 7 out of 10. We evaluated DSGX against 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 not overvalued while it is showing excellent growth. This is an interesting 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.
In the past year DSGX had a positive cash flow from operations.
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
DSGX has a Return On Assets of 8.46%. This is amongst the best in the industry. DSGX outperforms 81.14% of its industry peers.
DSGX has a better Return On Equity (9.91%) than 75.44% of its industry peers.
DSGX has a Return On Invested Capital of 9.19%. This is amongst the best in the industry. DSGX outperforms 82.56% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for DSGX is below the industry average of 12.07%.
The last Return On Invested Capital (9.19%) for DSGX is above the 3 year average (8.86%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.46% | ||
| ROE | 9.91% | ||
| ROIC | 9.19% |
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 (21.70%) is better than 86.48% of its industry peers.
In the last couple of years the Profit Margin of DSGX has grown nicely.
DSGX's Operating Margin of 27.36% is amongst the best of the industry. DSGX outperforms 90.75% of its industry peers.
DSGX's Operating Margin has improved in the last couple of years.
The Gross Margin of DSGX (76.06%) is better than 70.82% 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 | 27.36% | ||
| PM (TTM) | 21.7% | ||
| 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.
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 17.98 indicates that DSGX is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 17.98, DSGX belongs to the top of the industry, outperforming 94.31% 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 | 17.98 |
ROIC/WACC0.91
WACC10.06%
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.
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 54.45% 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 | 1.7 | ||
| 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
Looking at the last year, DSGX shows a quite strong growth in Revenue. The Revenue has grown by 12.68% in the last year.
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
DSGX is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 21.92% yearly.
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 Y10.91%
EPS Next 2Y15.63%
EPS Next 3Y24.27%
EPS Next 5Y21.92%
Revenue Next Year10.23%
Revenue Next 2Y10.74%
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
A Price/Earnings ratio of 49.33 indicates a quite expensive valuation of DSGX.
DSGX's Price/Earnings ratio is in line with the industry average.
DSGX is valuated expensively when we compare the Price/Earnings ratio to 25.89, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 37.79 indicates a quite expensive valuation of DSGX.
DSGX's Price/Forward Earnings is on the same level as the industry average.
DSGX's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 34.59.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 49.33 | ||
| Fwd PE | 37.79 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of DSGX indicates a somewhat cheap valuation: DSGX is cheaper than 75.09% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, DSGX is valued a bit cheaper than the industry average as 69.75% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.92 | ||
| EV/EBITDA | 25.67 |
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.
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 24.27% in the coming years.
PEG (NY)4.52
PEG (5Y)1.6
EPS Next 2Y15.63%
EPS Next 3Y24.27%
5. Dividend
5.1 Amount
DSGX does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
83.365
+1.05 (+1.28%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners92.55%
Inst Owner Change5.81%
Ins Owners0.26%
Ins Owner ChangeN/A
Market Cap7.16B
Revenue(TTM)684.78M
Net Income(TTM)148.63M
Analysts77.5
Price Target98.8 (18.51%)
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%
PT rev (3m)-2.83%
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 | 49.33 | ||
| Fwd PE | 37.79 | ||
| P/S | 10.46 | ||
| P/FCF | 30.92 | ||
| P/OCF | 30.08 | ||
| P/B | 4.78 | ||
| P/tB | 45.53 | ||
| EV/EBITDA | 25.67 |
EPS(TTM)1.69
EY2.03%
EPS(NY)2.21
Fwd EY2.65%
FCF(TTM)2.7
FCFY3.23%
OCF(TTM)2.77
OCFY3.32%
SpS7.97
BVpS17.45
TBVpS1.83
PEG (NY)4.52
PEG (5Y)1.6
Graham Number25.76
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.46% | ||
| ROE | 9.91% | ||
| ROCE | 12.13% | ||
| ROIC | 9.19% | ||
| ROICexc | 10.88% | ||
| ROICexgc | N/A | ||
| OM | 27.36% | ||
| PM (TTM) | 21.7% | ||
| GM | 76.06% | ||
| FCFM | 33.84% |
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 | 88.32% | ||
| Profit Quality | 155.89% | ||
| Current Ratio | 1.7 | ||
| Quick Ratio | 1.7 | ||
| Altman-Z | 17.98 |
F-Score7
WACC10.06%
ROIC/WACC0.91
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 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 Year10.23%
Revenue Next 2Y10.74%
Revenue Next 3Y10.27%
Revenue Next 5Y10.6%
EBIT growth 1Y21.76%
EBIT growth 3Y19.76%
EBIT growth 5Y27.58%
EBIT Next Year72.41%
EBIT Next 3Y29.84%
EBIT Next 5Y23.17%
FCF growth 1Y17.98%
FCF growth 3Y7.45%
FCF growth 5Y16.41%
OCF growth 1Y17.68%
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 4 / 10 to DESCARTES SYSTEMS GRP/THE (DSGX). This can be considered as Fairly Valued.
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.