What Is The Descartes Systems Group Inc.'s (TSE:DSG) Share Price Doing?

While The Descartes Systems Group Inc. (TSE:DSG) might not be the most widely known stock at the moment, it saw a double-digit share price rise of over 10% in the past couple of months on the TSX. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s examine Descartes Systems Group’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Descartes Systems Group

Is Descartes Systems Group Still Cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 0.10% 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 the company’s true value is CA$93.08, 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. Descartes Systems Group's earnings over the next few years are expected to increase by 68%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in DSG’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on DSG, now may not be the most advantageous 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.

Diving deeper into the forecasts for Descartes Systems Group mentioned earlier will help you understand how analysts view the stock going forward. 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.