# Descartes Systems Group (DSGX.US)

Canonical: https://gigainvestors.com/s/DSGX

Analysis as of: 2026-10-16T07:28:06.596Z. Financial observations: FY1997–FY2027.

Listing currency: USD. Reporting currency: USD.

## Verdict

A wonderful business at too high a price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $88.64 per share; close as of 2026-10-15.

Estimated value: low $48.25 per share, central $68.31 per share, high $79.50 per share. Buy at or below the central value $68.31 per share. Valuation as of 2026-10-16T07:28:06.596Z; scenarios are not confidence intervals.

Expected annual return: 8.4% at the stated quote. About 8.4% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 0 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 0

- Years with a net loss: 0

- Operating margin variation: 0.26×

Chart: Operating margin; fiscal year observations.

- FY2018: 0.15×

- FY2019: 0.15×

- FY2020: 0.16×

- FY2021: 0.20×

- FY2022: 0.24×

- FY2023: 0.27×

- FY2024: 0.25×

- FY2025: 0.28×

- FY2026: 0.30×

- LTM to Jul 2026: 0.33×

### moat: pass

- ROIC, median of available years: 52.1%

- ROIC, second-lowest year: 17.5%

- Typical minus recent gross margin: -1.3 pp

- Typical gross margin (annual median): 75.8%

- Recent gross margin (lower of latest and 3-year median): 77.1%

- Years with nonpositive capital: 0

- Capital spending / revenue: 1.1%

- ROIC including acquisitions, ten-year median: 15.9%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2018: 18.0%

- FY2019: 17.5%

- FY2020: 15.1%

- FY2021: 23.5%

- FY2022: 46.0%

- FY2023: 64.5%

- FY2024: 66.9%

- FY2025: 58.3%

- FY2026: 67.3%

- LTM to Jul 2026: 90.3%

### economics: pass

- Owner earnings / net income, 5-yr: 1.48×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $1.1B

- Net income, five-year total: $713M

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: -0.3 pp

- Working capital / revenue, change between three-year averages: -1.8 pp

- Working capital / revenue, final three-year average: 9.0%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2023: 1.58×

- FY2024: 1.52×

- FY2025: 1.48×

- FY2026: 1.50×

- LTM to Jul 2026: 1.40×

### management: pass

- Historical market-dollar context (not the management verdict): 2017 to 2026 (9 years)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 17.7% vs 66.9%

- Per-share earnings: 0.31 to 1.64 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 1.4%

- Ordinary dilution, 5-year annual growth: 0.4%

- Market cap gain: $4.8B

- Cumulative retained earnings: $762M

- Diluted shares, 10-year annual growth: 1.4%

- Diluted shares, 5-year annual growth: 0.4%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value growth: 23.1%

- Per-share value change: $1.33

- Per-share value, starting three-year median: $0.31

- Per-share value, ending three-year median: $1.64

- Buybacks concentrated in cheaper years (correlation): -1.00

- Average buyback yield: 0.0%

- Buyback history: 3 years

- Debt-funded buybacks: No

- Acquisition spending: $1.0B

- Cumulative net income, 10 years: $783M

- ROIC, first three-year median: 17.7%

- ROIC, last three-year median: 66.9%

Chart: Earnings per share; fiscal year observations.

- FY2017: $0.31

- FY2018: $0.35

- FY2019: $0.40

- FY2020: $0.45

- FY2021: $0.61

- FY2022: $1.00

- FY2023: $1.18

- FY2024: $1.34

- FY2025: $1.64

- FY2026: $1.87

### accounting: pass

- Sloan accruals: -5.7%

- Receivables to sales index (DSRI): 1.14×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 7.7%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.66×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.84×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -9.7%

- FY2018: -7.2%

- FY2019: -7.2%

- FY2020: -7.1%

- FY2021: -7.4%

- FY2022: -7.6%

- FY2023: -6.9%

- FY2024: -6.3%

- FY2025: -4.6%

- FY2026: -5.7%

## Holders

- [Dan Davidowitz](https://gigainvestors.com/pcm): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 24% since Nov 2024 · "Descartes cutting 7% of workforce after earnings miss" (finance.yahoo.com, Jun 2025) · sales +6.3%

Story as of 2026-10-16T09:58:39.505Z; price observation 2026-10-15.

Price needs cash profits to grow 10.9% a year for ten years

- 2025-06-04: Descartes cutting 7% of workforce after earnings miss ([finance.yahoo.com](https://finance.yahoo.com/news/descartes-cutting-7-workforce-earnings-230908950.html))

- 2026-03-11: Descartes Reports 22% Increase in Fiscal 2026 Q4 Net Income as Revenue Climbs ([finance.yahoo.com](https://finance.yahoo.com/news/descartes-reports-22-increase-fiscal-212837700.html))

### Sales · FY2026–2027

sales +6.3%; source https://www.sec.gov/Archives/edgar/data/1050140/000110465926026450/dsgx-20260131x40f.htm; observed 2026-03-11.

- FY2018: $237M 

- FY2019: $275M 

- FY2020: $326M 

- FY2021: $349M 

- FY2022: $425M 

- FY2023: $486M 

- FY2024: $573M 

- FY2025: $651M 

- FY2026: $729M 

- FY2027: $775M 

### Gross margin · FY2027

gross margin 77.6%; source https://www.sec.gov/Archives/edgar/data/1050140/000110465926026450/dsgx-20260131x40f.htm; observed 2026-03-11.

- FY2018: 73.2% 

- FY2019: 72.7% 

- FY2020: 73.7% 

- FY2021: 74.2% 

- FY2022: 76.0% 

- FY2023: 76.7% 

- FY2024: 75.9% 

- FY2025: 75.6% 

- FY2026: 77.1% 

- FY2027: 77.6% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in software application; annual sales are USD 729 million.

- Source: https://www.sec.gov/Archives/edgar/data/1050140/000110465926026450/dsgx-20260131x40f.htm (filed 2026-03-11); FY2026: revenue 728992000; grossProfit 561927000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); DSGX.US: The Descartes Systems Group Inc. provides global logistics technology solutions in the United States, Europe, the Middle East, Africa, Canada, and the Asia Pacific. Its Logistics Technology platform offers a range of modular, interoperable web and wireless logistics management solutions. The company offers a suite of solutions that include routing, mobile, and telematics; transportation management; ecommerce, shipping, and fulfillment; customs and regulatory compliance; global trade intelligence; broker and forwarder enterprise systems; and B2B messaging and connectivity services. It also provides its customers to use its modular and technology solutions to route, track, and measure delivery resources; plan, allocate, and execute shipments; rate, audit, and pay transportation invoices; access and analyze global trade data; research and perform trade tariff and duty calculations; file customs and security documents for imports and exports; and various other logistics processes. In addition, the company offers consulting, implementation, and training services, as well as maintenance and support services. It serves transportation providers, such as air, ocean, and truck modes; logistics service providers, including third-party logistics providers, freight forwarders, and customs brokers; and distribution-intensive companies, such as retailers, manufacturers, distributors, and mobile business service providers through subscription, transactional or perpetual license basis. Further, the company develops Tai TMS, a transportation management software for freight brokers to manage quoting, booking, and shipment tracking. The Descartes Systems Group Inc. was incorporated in 1981 and is headquartered in Waterloo, Canada.

### Why customers stay

Margins ranged from 75.6% to 77.1% during 2024–26; it earns 52.1% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-11); FY2024: grossProfit / revenue = 75.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-11); FY2025: grossProfit / revenue = 75.6%.

- Source: https://www.sec.gov/Archives/edgar/data/1050140/000110465926026450/dsgx-20260131x40f.htm (filed 2026-03-11); FY2026: grossProfit / revenue = 77.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-11); 10-year return on capital observations [[2018,0.18049237909588028],[2019,0.17475646562955235],[2020,0.15073568575644775],[2021,0.2346294522052978],[2022,0.46010664609385094],[2023,0.6446751902152713],[2024,0.669367964569624],[2025,0.5827462931925766],[2026,0.6728255892955588],[2027,0.9033686768569072]]; median 0.5214264696432138. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid no dividends in 10 years; bought back USD 911573 of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-11); FY2017: growth capex 0; upkeep 4914000; owner earnings 52553000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-11); FY2018: growth capex 0; upkeep 5086000; owner earnings 59371000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-11); FY2019: growth capex 0; upkeep 5244000; owner earnings 70756000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-11); FY2020: growth capex 0; upkeep 4900000; owner earnings 93619000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-11); FY2021: growth capex 0; upkeep 3759000; owner earnings 110003000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-11); FY2022: growth capex 0; upkeep 4829000; owner earnings 145681000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-11); FY2023: growth capex 0; upkeep 6071000; owner earnings 161567000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-11); FY2024: growth capex 0; upkeep 5585349; owner earnings 176296651. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-11); FY2025: growth capex 0; upkeep 6743000; owner earnings 211518000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/1050140/000110465926026450/dsgx-20260131x40f.htm (filed 2026-03-11); FY2026: growth capex 0; upkeep 5855733; owner earnings 245042267. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-11); Dividend observations: [[2017,0],[2018,0],[2019,0],[2020,0],[2021,0],[2022,0],[2023,0],[2024,0],[2025,0],[2026,0]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1050140/000110465926026450/dsgx-20260131x40f.htm (filed 2026-03-11); FY2026: cash repurchases 911573 USD.

### Are managers owners

Insiders own 0.1% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); DSGX.US SharesStats.PercentInsiders = 0.061 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 10.9% yearly over ten years; actual growth was 16.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-11); Ten-year compound average after fade. Initial solved rate 0.19041344795945553. Price 88.64; FX 1; discount 0.1; same compounder ten-year fade to terminal 0.03. FY2016 owner earnings/share 0.6000863772592234 → FY2026 2.7979568960595578. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $20.80 per share

- 2016-11: $22.15 per share

- 2016-12: $21.40 per share

- 2017-01: $21.85 per share

- 2017-02: $21.05 per share

- 2017-03: $22.90 per share

- 2017-04: $23.15 per share

- 2017-05: $25.05 per share

- 2017-06: $24.35 per share

- 2017-07: $25.10 per share

- 2017-08: $28.05 per share

- 2017-09: $27.35 per share

- 2017-10: $29.05 per share

- 2017-11: $27.75 per share

- 2017-12: $28.40 per share

- 2018-01: $28.35 per share

- 2018-02: $26.45 per share

- 2018-03: $28.55 per share

- 2018-04: $29.55 per share

- 2018-05: $29.80 per share

- 2018-06: $32.50 per share

- 2018-07: $31.90 per share

- 2018-08: $35.00 per share

- 2018-09: $33.90 per share

- 2018-10: $30.59 per share

- 2018-11: $29.42 per share

- 2018-12: $26.46 per share

- 2019-01: $31.06 per share

- 2019-02: $34.54 per share

- 2019-03: $36.38 per share

- 2019-04: $39.98 per share

- 2019-05: $40.10 per share

- 2019-06: $36.95 per share

- 2019-07: $36.30 per share

- 2019-08: $35.48 per share

- 2019-09: $40.31 per share

- 2019-10: $38.91 per share

- 2019-11: $42.83 per share

- 2019-12: $42.72 per share

- 2020-01: $44.81 per share

- 2020-02: $41.32 per share

- 2020-03: $34.39 per share

- 2020-04: $42.08 per share

- 2020-05: $47.59 per share

- 2020-06: $52.90 per share

- 2020-07: $56.33 per share

- 2020-08: $60.95 per share

- 2020-09: $56.98 per share

- 2020-10: $53.76 per share

- 2020-11: $59.29 per share

- 2020-12: $58.48 per share

- 2021-01: $61.06 per share

- 2021-02: $58.56 per share

- 2021-03: $60.91 per share

- 2021-04: $64.06 per share

- 2021-05: $58.44 per share

- 2021-06: $69.16 per share

- 2021-07: $72.66 per share

- 2021-08: $78.40 per share

- 2021-09: $81.26 per share

- 2021-10: $81.77 per share

- 2021-11: $80.36 per share

- 2021-12: $82.68 per share

- 2022-01: $72.77 per share

- 2022-02: $71.26 per share

- 2022-03: $73.26 per share

- 2022-04: $62.15 per share

- 2022-05: $59.35 per share

- 2022-06: $62.06 per share

- 2022-07: $69.04 per share

- 2022-08: $70.40 per share

- 2022-09: $63.53 per share

- 2022-10: $69.07 per share

- 2022-11: $69.45 per share

- 2022-12: $69.65 per share

- 2023-01: $73.02 per share

- 2023-02: $73.68 per share

- 2023-03: $80.61 per share

- 2023-04: $79.18 per share

- 2023-05: $77.33 per share

- 2023-06: $80.11 per share

- 2023-07: $77.87 per share

- 2023-08: $74.96 per share

- 2023-09: $73.38 per share

- 2023-10: $72.21 per share

- 2023-11: $81.04 per share

- 2023-12: $84.06 per share

- 2024-01: $87.59 per share

- 2024-02: $86.67 per share

- 2024-03: $91.53 per share

- 2024-04: $92.79 per share

- 2024-05: $92.33 per share

- 2024-06: $96.84 per share

- 2024-07: $101.65 per share

- 2024-08: $100.89 per share

- 2024-09: $102.96 per share

- 2024-10: $103.93 per share

- 2024-11: $116.87 per share

- 2024-12: $113.60 per share

- 2025-01: $115.83 per share

- 2025-02: $111.49 per share

- 2025-03: $100.83 per share

- 2025-04: $105.39 per share

- 2025-05: $115.94 per share

- 2025-06: $101.65 per share

- 2025-07: $105.76 per share

- 2025-08: $99.95 per share

- 2025-09: $94.23 per share

- 2025-10: $88.21 per share

- 2025-11: $82.42 per share

- 2025-12: $87.66 per share

- 2026-01: $74.76 per share

- 2026-02: $66.25 per share

- 2026-03: $71.56 per share

- 2026-04: $72.11 per share

- 2026-05: $73.77 per share

- 2026-06: $69.24 per share

- 2026-07: $75.16 per share

- 2026-08: $80.64 per share

- 2026-09: $80.86 per share

- 2026-10: $82.82 per share

## Annual estimated value (USD per share)

- FY2017: low $7.23 per share, central $8.17 per share, high $9.41 per share

- FY2018: low $8.74 per share, central $9.89 per share, high $11.42 per share

- FY2019: low $9.95 per share, central $11.28 per share, high $13.06 per share

- FY2020: low $11.51 per share, central $13.03 per share, high $15.06 per share

- FY2021: low $12.94 per share, central $14.52 per share, high $16.62 per share

- FY2022: low $17.85 per share, central $19.99 per share, high $22.83 per share

- FY2023: low $22.38 per share, central $25.05 per share, high $28.59 per share

- FY2024: low $26.32 per share, central $29.46 per share, high $33.64 per share

- FY2025: low $29.03 per share, central $32.68 per share, high $37.54 per share

- FY2026: low $44.06 per share, central $62.49 per share, high $72.77 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 40-F filing](https://www.sec.gov/Archives/edgar/data/1050140/000110465926026450/dsgx-20260131x40f.htm); period 2026-01-31, filed 2026-03-11.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.