The Descartes Systems Group Inc. (TSE:DSG)
NASDAQ:DSG
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The Descartes Systems Group
(NASDAQ:DSG)
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Rating:75Outperform
Price Target:
C$122.00
▲(16.61% Upside)
Action:Reiterated
Date:06/05/26
The score is driven primarily by strong financial quality—excellent margins, strong free-cash-flow conversion, and very low leverage—partly offset by a high valuation (P/E ~40.7) and only moderate technical strength (below the 200-day moving average with neutral-to-warm momentum indicators).
Positive Factors
Recurring SaaS + network revenue model
Descartes combines subscription SaaS fees with transactional network-based revenues, creating sticky, usage-linked cash flow. Network effects (more connected trading partners increasing transaction volume) support durable retention and organic revenue expansion as customers scale activity over time.
Negative Factors
Near-term revenue growth deceleration
Revenue growth has slowed materially from prior mid-to-high teens to low single digits TTM, signaling weaker organic demand or market saturation in core segments. Sustained slow top-line growth limits long-term operating-leverage gains and raises the bar for maintaining EPS and cash growth.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring SaaS + network revenue model
Descartes combines subscription SaaS fees with transactional network-based revenues, creating sticky, usage-linked cash flow. Network effects (more connected trading partners increasing transaction volume) support durable retention and organic revenue expansion as customers scale activity over time.
Read all positive factors
The Descartes Systems Group (DSG) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$8.46B
Dividend YieldN/A
Average Volume (3M)321.30K
Price to Earnings (P/E)32.7
Beta (1Y)0.85
Revenue Growth11.62%
EPS Growth19.63%
CountryCA
Employees1,334
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)2.06
Shares Outstanding85,690,830
10 Day Avg. Volume289,560
30 Day Avg. Volume321,300
Financial Highlights & Ratios
PEG Ratio2.38
Price to Book (P/B)3.99
Price to Sales (P/S)8.62
P/FCF Ratio24.13
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$151.38Price Target Upside44.70% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
EPS Forecast (FY)3.21
Revenue Forecast (FY)C$1.13B
The Descartes Systems Group Business Overview & Revenue Model
Company Description
Descartes Systems Group Inc. provides cloud-hosted solutions specifically designed for managing logistics and supply chain operations. Its core mission is to enhance the productivity, overall performance, and security for businesses worldwide that...
How the Company Makes Money
Descartes primarily makes money by selling access to its cloud logistics and compliance software and related network services, with revenue largely generated through recurring subscriptions and usage-based fees. Key revenue streams include: (1) Su...
The Descartes Systems Group Earnings Call Summary
Earnings Call Date:Dec 03, 2025
(Q3-2026)
| % Change Since: |
Next Earnings Date:Sep 09, 2026
Earnings Call Sentiment Positive
The earnings call highlighted record-breaking financial performance and strategic growth through acquisitions and AI integration. However, it acknowledged challenges in the global trade environment and potential impacts from regulatory changes. Overall, the positive highlights significantly outweigh the lowlights.Positive Updates
Record-Breaking Financial Performance
Total revenues reached a record high of $187.7 million, up 11% from a year ago. Record net income increased by 20%, and record income from operations grew by 24% from a year ago. Adjusted EBITDA rose by 19%, with a margin increase of 3 points to 46%.
Negative Updates
Challenges in Global Trade Environment
Uncertain trade and tariff conditions remain a challenge, with ongoing geopolitical tensions and potential new tariffs impacting the business environment.
Read all updates
Q3-2026 Updates
Positive
Negative
Record-Breaking Financial Performance
Total revenues reached a record high of $187.7 million, up 11% from a year ago. Record net income increased by 20%, and record income from operations grew by 24% from a year ago. Adjusted EBITDA rose by 19%, with a margin increase of 3 points to 46%.
Read all positive updates
Company Guidance
During the recent quarterly results call for Descartes Systems Group, the company reported strong record performance across several key metrics for the third quarter ending October 31, 2026. Total revenues reached a record high of $187.7 million, marking an 11% increase from the previous year. Services revenues, which are a focus area for generating recurring income, climbed by 16% year-over-year. The company also achieved a 20% year-over-year increase in net income and a 24% rise in income from operations. Record adjusted EBITDA grew by 19% from the prior year, with an adjusted EBITDA margin improvement of 3 percentage points to 46%. Additionally, Descartes generated a record $73 million in cash from operations, up 22% from the previous year. The company remains debt-free, with $279 million in cash and an undrawn $350 million line of credit. These financial accomplishments were complemented by strategic acquisitions, including the purchase of Finale Inventory, and a significant focus on leveraging artificial intelligence to enhance service delivery and operational efficiency.The Descartes Systems Group Financial Statement Overview
Summary
Income Statement
88
Very Positive
Balance Sheet
94
Very Positive
Cash Flow
90
Very Positive
| Breakdown | TTM | Jan 2026 | Jan 2025 | Jan 2023 | Jan 2022 | Jan 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 758.57M | 743.36M | 651.00M | 572.93M | 486.01M | 424.69M |
| Gross Profit | 548.14M | 490.22M | 492.43M | 434.64M | 372.69M | 322.88M |
| EBITDA | 322.54M | 311.20M | 267.63M | 218.49M | 200.30M | 167.96M |
| Net Income | 177.13M | 167.00M | 143.27M | 115.91M | 102.24M | 86.28M |
Balance Sheet | ||||||
| Total Assets | 1.92B | 1.88B | 1.62B | 1.47B | 1.32B | 1.19B |
| Cash, Cash Equivalents and Short-Term Investments | 377.49M | 353.55M | 231.92M | 319.07M | 276.21M | 213.48M |
| Total Debt | 8.14M | 8.29M | 7.75M | 6.94M | 7.32M | 11.41M |
| Total Liabilities | 291.27M | 274.44M | 257.69M | 234.86M | 216.52M | 185.65M |
| Stockholders Equity | 1.63B | 1.61B | 1.36B | 1.23B | 1.10B | 1.00B |
Cash Flow | ||||||
| Free Cash Flow | 283.21M | 265.61M | 212.53M | 202.12M | 186.32M | 171.31M |
| Operating Cash Flow | 289.70M | 271.46M | 219.27M | 207.68M | 192.40M | 176.14M |
| Investing Cash Flow | -75.59M | -160.45M | -296.95M | -148.26M | -121.63M | -95.11M |
| Financing Cash Flow | -13.99M | 5.15M | -3.63M | -14.74M | -4.60M | 1.52M |
The Descartes Systems Group Technical Analysis
Negative
104.62
Price Trends
99.61
Negative
97.15
Negative
111.55
Negative
Market Momentum
-0.58
Positive
40.45
Neutral
11.89
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:DSG, the sentiment is Negative. The current price of 104.62 is above the 20-day moving average (MA) of 101.73, above the 50-day MA of 99.61, and below the 200-day MA of 111.55, indicating a bearish trend. The MACD of -0.58 indicates Positive momentum. The RSI at 40.45 is Neutral, neither overbought nor oversold. The STOCH value of 11.89 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:DSG.
The Descartes Systems Group Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | C$4.00B | 34.24 | 19.72% | ― | 16.06% | 744.14% | |
75 Outperform | C$8.46B | 32.68 | 11.26% | ― | 11.62% | 19.63% | |
74 Outperform | C$849.83M | 11.79 | 11.97% | 5.69% | -4.08% | -7.65% | |
71 Outperform | C$620.61M | 14.07 | 89.83% | ― | 11.83% | 57.19% | |
69 Neutral | C$7.15B | 9.98 | 12.93% | 3.27% | -0.86% | -16.61% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
58 Neutral | C$1.83B | -9.05 | -9.59% | ― | 13.25% | 77.06% |
* Technology Sector Average
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The Descartes Systems Group Corporate Events
Business Operations and StrategyProduct-Related Announcements
Descartes Unveils AI Fleet Data Intelligence Platform to Boost Logistics Performance
Positive
Apr 14, 2026
Descartes Systems Group has expanded the artificial intelligence capabilities of its Global Logistics Network with the launch of the Descartes Fleet Data Intelligence platform, aimed at logistics-intensive fleets. Built on large volumes of executi...
Business Operations and Strategy
ER2 Boosts Ecommerce Fulfillment Efficiency With Descartes Sellercloud
Positive
Apr 1, 2026
ER2, an Arizona-based IT asset management company specializing in lifecycle services and large-scale refurbishment of enterprise technology, has adopted Descartes’ Sellercloud solution to unify inventory, warehouse operations and shipping ac...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.