Is It Too Late To Consider Buying The Descartes Systems Group Inc. (TSE:DSG)?

The Descartes Systems Group Inc. (TSE:DSG), might not be a large cap stock, but it saw significant share price movement during recent months on the TSX, rising to highs of CA$109 and falling to the lows of CA$98.29. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Descartes Systems Group's current trading price of CA$106 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Descartes Systems Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Descartes Systems Group

What Is Descartes Systems Group Worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 16.81% above my intrinsic value, which means if you buy Descartes Systems Group today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth CA$90.85, then there isn’t really any room for the share price grow beyond what it’s currently trading. What's more, Descartes Systems Group’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will Descartes Systems Group generate?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by 57% over the next couple of years, the future seems bright for Descartes Systems Group. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? DSG’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on DSG, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

It can be quite valuable to consider what analysts expect for Descartes Systems Group from their most recent forecasts. Luckily, you can check out what analysts are forecasting by clicking here.

If you are no longer interested in Descartes Systems Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.