TSX:DSG

Stock Analysis Report

Descartes Systems Group

Executive Summary

The Descartes Systems Group Inc. provides federated network and logistics technology solutions worldwide.

Snowflake

Fundamentals

Reasonable growth potential with adequate balance sheet.


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


Market Performance


7 Day Return

-3.1%

DSG

-2.6%

CA Software

-0.2%

CA Market


1 Year Return

25.0%

DSG

15.9%

CA Software

1.5%

CA Market

Return vs Industry: DSG exceeded the Canadian Software industry which returned 15.9% over the past year.

Return vs Market: DSG exceeded the Canadian Market which returned 1.5% over the past year.


Shareholder returns

DSGIndustryMarket
7 Day-3.1%-2.6%-0.2%
30 Day-2.0%-4.3%-3.5%
90 Day6.7%-1.1%-1.8%
1 Year25.0%25.0%17.8%15.9%5.1%1.5%
3 Year82.4%82.4%68.7%64.7%13.3%3.2%
5 Year247.4%247.4%149.3%142.0%25.2%7.2%

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?

97.24x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: DSG (CA$51.76) is trading above our estimate of fair value (CA$31)

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 (97.2x) compared to the Software industry average (24.2x).

PE vs Market: DSG is poor value based on its PE Ratio (97.2x) compared to the Canadian market (13.7x).


Price to Earnings Growth Ratio

PEG Ratio: DSG is poor value based on its PEG Ratio (3x)


Price to Book Ratio

PB vs Industry: DSG is overvalued based on its PB Ratio (4.2x) compared to the CA Software industry average (2.4x).


Next Steps

Future Growth

How is Descartes Systems Group forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

32.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DSG's forecast earnings growth (32.8% per year) is above the savings rate (1.9%).

Earnings vs Market: DSG's earnings (32.8% per year) are forecast to grow faster than the Canadian market (13.6% per year).

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

Revenue vs Market: DSG's revenue (10.7% per year) is forecast to grow faster than the Canadian market (5.7% per year).

High Growth Revenue: DSG's revenue (10.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if DSG's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

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

16.2%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: DSG's earnings have grown by 16.2% per year over the past 5 years.

Accelerating Growth: DSG's earnings growth over the past year (11.9%) is below its 5-year average (16.2% per year).

Earnings vs Industry: DSG earnings growth over the past year (11.9%) underperformed the Software industry 23.6%.


Return on Equity

High ROE: DSG's Return on Equity (4%) is considered low.


Return on Assets

ROA vs Industry: DSG's Return on Assets is below or equal to the Software industry average last year.


Return on Capital Employed

ROCE Improving: DSG's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Descartes Systems Group's financial position?


Financial Position Analysis

Short Term Liabilities: DSG's short term assets ($76.6M) do not cover its short term liabilities ($87.6M)

Long Term Liabilities: DSG's short term assets (76.6M) exceeds its long term liabilities (56.1M)


Debt to Equity History and Analysis

Debt Level: DSG's debt to equity ratio (2.9%) is considered satisfactory

Reducing Debt: Insufficient data to determine if DSG's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: DSG's debt is well covered by operating cash flow (401.4%).

Interest Coverage: DSG's interest payments on its debt are well covered by EBIT (11.5x coverage).


Balance Sheet

Inventory Level: DSG has a low level of unsold assets or inventory.

Debt Coverage by Assets: DSG's debt is covered by short term assets (assets are 3.364180x debt).


Next Steps

Dividend

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

0.84%

Forecast Dividend Yield


Dividend Yield vs Market

companyn/amarketbottom25%2.0%markettop25%6.0%industryaverage1.5%forecastin3Years0.8%

Current dividend yield vs market & industry


Stability and Growth of Payments

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

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

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

What is the CEO of Descartes Systems Group's salary, the management and board of directors tenure and is there insider trading?

5.9yrs

Average management tenure


CEO

Ed Ryan (50yo)

5.9yrs

Tenure

US$2,651,788

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 ($USD2.02M) is below average for companies of similar size in the Canadian market ($USD2.91M).

Compensation vs Earnings: Ed's compensation has been consistent with company performance over the past year.


Management Age and Tenure

5.9yrs

Average Tenure

Experienced Management: DSG's management team is seasoned and experienced (5.9 years average tenure).


Board Age and Tenure

5.4yrs

Average Tenure

60yo

Average Age

Experienced Board: DSG's board of directors are considered experienced (5.4 years average tenure).


Insider Trading

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


Ownership Breakdown


Management Team

  • Chris Jones (60yo)

    Executive Vice President of Marketing & Services

    • Tenure: 8.3yrs
    • Compensation: US$414.13k
  • Allan Brett

    Chief Financial Officer

    • Tenure: 5.4yrs
    • Compensation: US$1.16m
  • John Pagan

    President & COO

    • Tenure: 5.9yrs
    • Compensation: US$1.54m
  • Ed Ryan (50yo)

    CEO & Director

    • Tenure: 5.9yrs
    • Compensation: US$2.65m
  • Mike Verhoeve

    Executive VP of Legal

    • Tenure: 5.4yrs
    • Compensation: US$443.89k
  • Raimond Diederik

    Executive Vice President of Information Services

    • Tenure: 10.1yrs
    • Compensation: US$218.25k
  • Ed Gardner

    Executive Vice President of Corporate Development

    • Tenure: 0yrs
  • Ken Wood

    Executive Vice President of Product Management

    • Tenure: 0yrs
    • Compensation: US$346.57k
  • Bob Parker

    Executive Vice President of Customer Support & Client Services

    • Tenure: 0yrs
  • Andrew Roszko

    Executive Vice President of Global Sales

    • Tenure: 0.7yrs

Board Members

  • John Walker (66yo)

    Independent Director

    • Tenure: 8.1yrs
    • Compensation: US$184.95k
  • Eric Demirian (60yo)

    Independent Chairman of the Board

    • Tenure: 5.4yrs
    • Compensation: US$215.00k
  • Dave Beatson (71yo)

    Independent Director

    • Tenure: 13.6yrs
    • Compensation: US$172.18k
  • Ed Ryan (50yo)

    CEO & Director

    • Tenure: 5.9yrs
    • Compensation: US$2.65m
  • Jane O’Hagan (55yo)

    Independent Director

    • Tenure: 5.4yrs
    • Compensation: US$181.59k
  • Deborah Close (65yo)

    Independent Director

    • Tenure: 4.4yrs
    • Compensation: US$184.50k
  • Dennis Maple (59yo)

    Independent Director

    • Tenure: 2.3yrs
    • Compensation: US$167.83k

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$4.354b
  • Shares outstanding: 84.13m
  • 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 federated network and logistics technology solutions worldwide. Its Logistics Application Suite offers a range of modular, cloud-based, and interoperable Web and w ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/21 23:36
End of Day Share Price2019/10/21 00:00
Earnings2019/07/31
Annual Earnings2019/01/31


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.