TSX:DSG

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Descartes Systems Group

Executive Summary

The Descartes Systems Group Inc. provides cloud, device, and data content-based solutions that focus on enhancing the productivity, performance, and security of logistics-intensive businesses worldwide. More Details

Rewards

Earnings are forecast to grow 22.17% per year

Earnings have grown 15.1% per year over the past 5 years

Risk Analysis

No risks detected for DSG from our risk checks.


Snowflake Analysis

Flawless balance sheet with proven track record.


Similar Companies

Share Price & News

How has Descartes Systems Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: DSG has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.7%

DSG

-1.5%

CA Software

1.1%

CA Market


1 Year Return

30.7%

DSG

19.3%

CA Software

-7.0%

CA Market

Return vs Industry: DSG exceeded the Canadian Software industry which returned 19.3% over the past year.

Return vs Market: DSG exceeded the Canadian Market which returned -7% over the past year.


Shareholder returns

DSGIndustryMarket
7 Day-2.7%-1.5%1.1%
30 Day-7.1%-2.5%-1.2%
90 Day-4.1%1.0%6.8%
1 Year30.7%30.7%19.6%19.3%-3.7%-7.0%
3 Year102.3%102.3%77.5%73.7%10.3%-0.4%
5 Year186.0%186.0%131.4%123.3%43.7%21.6%

Price Volatility Vs. Market

How volatile is Descartes Systems Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Descartes Systems Group undervalued compared to its fair value and its price relative to the market?

103.46x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: DSG (CA$69.06) is trading above our estimate of fair value (CA$53.7)

Significantly Below Fair Value: DSG is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: DSG is poor value based on its PE Ratio (103.5x) compared to the CA Software industry average (36.1x).

PE vs Market: DSG is poor value based on its PE Ratio (103.5x) compared to the Canadian market (16.7x).


Price to Earnings Growth Ratio

PEG Ratio: DSG is poor value based on its PEG Ratio (4.7x)


Price to Book Ratio

PB vs Industry: DSG is overvalued based on its PB Ratio (5.2x) compared to the CA Software industry average (3.5x).


Next Steps

Future Growth

How is Descartes Systems Group forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

22.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DSG's forecast earnings growth (22.2% per year) is above the savings rate (1.7%).

Earnings vs Market: DSG's earnings (22.2% per year) are forecast to grow slower than the Canadian market (24.2% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: DSG's revenue (11.4% per year) is forecast to grow faster than the Canadian market (5.5% per year).

High Growth Revenue: DSG's revenue (11.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: DSG's Return on Equity is forecast to be low in 3 years time (8.5%).


Next Steps

Past Performance

How has Descartes Systems Group performed over the past 5 years?

15.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DSG has high quality earnings.

Growing Profit Margin: DSG's current net profit margins (12.7%) are higher than last year (10.6%).


Past Earnings Growth Analysis

Earnings Trend: DSG's earnings have grown by 15.1% per year over the past 5 years.

Accelerating Growth: DSG's earnings growth over the past year (34.7%) exceeds its 5-year average (15.1% per year).

Earnings vs Industry: DSG earnings growth over the past year (34.7%) underperformed the Software industry 41.3%.


Return on Equity

High ROE: DSG's Return on Equity (5%) is considered low.


Next Steps

Financial Health

How is Descartes Systems Group's financial position?


Financial Position Analysis

Short Term Liabilities: DSG's short term assets ($141.6M) exceed its short term liabilities ($92.3M).

Long Term Liabilities: DSG's short term assets ($141.6M) exceed its long term liabilities ($40.2M).


Debt to Equity History and Analysis

Debt Level: DSG is debt free.

Reducing Debt: DSG had no debt 5 years ago.

Debt Coverage: DSG has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: DSG has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet


Next Steps

Dividend

What is Descartes Systems Group current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate DSG's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate DSG's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if DSG's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if DSG's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of DSG's dividend in 3 years as they are not forecast to pay a notable one for the Canadian market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

6.8yrs

Average management tenure


CEO

Ed Ryan (51 yo)

6.83yrs

Tenure

US$3,314,980

Compensation

Mr. Edward J. Ryan, also known as Ed, BA, has been the Chief Executive Officer of The Descartes Systems Group, Inc since November 26, 2013. Mr. Ryan served as the Chief Commercial Officer of Descartes Syst ...


CEO Compensation Analysis

Compensation vs Market: Ed's total compensation ($USD3.31M) is about average for companies of similar size in the Canadian market ($USD3.00M).

Compensation vs Earnings: Ed's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Edward Ryan
CEO & Director6.83yrsUS$3.31mno data
John Pagan
President & COO6.83yrsUS$2.00m0.19%
$ 11.4m
Allan Brett
Chief Financial Officer6.33yrsUS$1.58m0.030%
$ 1.7m
Andrew Roszko
Executive Vice President of Global Sales1.58yrsUS$1.50m0.0041%
$ 241.5k
Kenneth Wood
Executive Vice President of Product Managementno dataUS$459.89k0.0066%
$ 385.6k
Raimond Diederik
Executive Vice President of Information Services11yrsUS$218.25k0.012%
$ 690.7k
Michael Verhoeve
Executive VP of Legal6.33yrsUS$443.89k0.0047%
$ 276.5k
Christopher Jones
Executive Vice President of Marketing & Services9.25yrsUS$414.13k0.055%
$ 3.2m
Edward Gardner
Executive Vice President of Corporate Developmentno datano datano data
Robert Parker
Executive Vice President of Customer Support & Client Servicesno datano datano data

6.8yrs

Average Tenure

Experienced Management: DSG's management team is seasoned and experienced (6.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Edward Ryan
CEO & Director6.83yrsUS$3.31mno data
John Walker
Independent Director9yrsUS$196.02k0.0053%
$ 310.9k
Eric Demirian
Independent Chairman of the Board6.33yrsUS$240.15k0.012%
$ 690.7k
Jane O'Hagan
Independent Director6.33yrsUS$188.50kno data
Deepak Chopra
Independent Director0.33yrno datano data
Deborah Close
Independent Director5.33yrsUS$191.00kno data
Dennis Maple
Independent Director3.25yrsUS$178.41kno data
Chris Muntwyler
Independent Director0.33yrno datano data

5.8yrs

Average Tenure

60.5yo

Average Age

Experienced Board: DSG's board of directors are considered experienced (5.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

The Descartes Systems Group Inc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: The Descartes Systems Group Inc
  • Ticker: DSG
  • Exchange: TSX
  • Founded: 1981
  • Industry: Application Software
  • Sector: Software
  • Market Cap: CA$5.834b
  • Shares outstanding: 84.47m
  • Website: https://www.descartes.com

Number of Employees


Location

  • The Descartes Systems Group Inc
  • 120 Randall Drive
  • Waterloo
  • Ontario
  • N2V 1C6
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
DSGXNasdaqGS (Nasdaq Global Select)YesCommon SharesUSUSDJan 1998
DSGTSX (The Toronto Stock Exchange)YesCommon SharesCACADJan 1998
DC2DB (Deutsche Boerse AG)YesCommon SharesDEEURJan 1998

Biography

The Descartes Systems Group Inc. provides cloud, device, and data content-based solutions that focus on enhancing the productivity, performance, and security of logistics-intensive businesses worldwide. It ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/09/18 07:14
End of Day Share Price2020/09/17 00:00
Earnings2020/07/31
Annual Earnings2020/01/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.