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What this page is: Delvantic's full research page for The Descartes Systems Group Inc. (DSGX) — AI-driven forensic equity research: mechanical valuation models (DCF, EPV, anchored-PE, scenario) plus three independent AI lenses (Quality / Value / Sentiment). Everything below is rendered server-side; you are not missing content that requires JavaScript. All scores are predictions and research opinions, not financial advice.
Our current read (analysis of 2026-08-27): Designation Watch · Gem Score -9 (−100…+100 Quality+Value blend) · Quality 79 · Value -67 · Sentiment 8 (timing only, not weighted)
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profile-header/price-overview— company profile, live quote, market capextended-analysis— the core: three AI lens reads with findings, scores, and the analyst memofuture-predictions— our forward price-band predictionsmarket-narrative/ai-findings/gpt-critique— narrative context, cross-model findings, and an adversarial critique of our own analysis (near the end of the document)- Members-only sections (render as login gates for anonymous readers):
price-history,income-trend,key-metrics,financials(statement tables),insider-trading. The analysis above is public; the raw data tables require a free account.
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raw inputs are public-company filings and market data (via licensed data feeds);
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The Descartes Systems Group Inc.
DSGX NASDAQThe Descartes Systems Group Inc. is a global logistics technology company that provides cloud-based software solutions for supply chain and logistics operations worldwide. The company operates the Global Logistics Network, a digital platform that connects shippers, carriers, freight forwarders, customs brokers, and third-party logistics providers to streamline commerce and trade. Its solutions span routing and fleet optimization, transportation management, ecommerce shipping and fulfillment, customs compliance and regulatory filings, global trade intelligence, and B2B connectivity services. The platform enables real-time visibility and collaboration across multimodal logistics networks, helping businesses manage shipments, optimize delivery resources, ensure regulatory compliance, and access trade data. Descartes serves diverse industries including retail, manufacturing, transportation, field service, and distribution. Headquartered in Waterloo, Ontario, Canada, the company delivers modular, subscription-based software solutions designed to improve productivity, performance, security, and sustainability across logistics-intensive business operations.
Price Overview
Price History (1 Year)
Revenue & Net Income Trend
The Descartes Systems Group Inc. is a foreign private issuer — it reports to the U.S. SEC once a year (on Form 20-F or 40-F) rather than filing the quarterly statements (10-Q) that U.S.-domiciled companies must submit. Our financial statements are read directly from SEC filings, so for this company only annual figures exist at the source.
This is a property of how the company files, not missing or broken data — its filing history shows 12 annual reports, the latest filed 2026-03-11, and no quarterly filings . The company may still publish quarterly results on its own investor-relations site.
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 1.87
Total Equity: $1.62B
Shares: 87,579,000
Total Debt: $0.00
Cash: $356.53M
EBITDA: $215.93M
Total Debt: $0.00
Cash: $356.53M
Revenue: $728.99M
Revenue: $728.99M
Revenue: $728.99M
Total Equity: $1.62B
Tax Rate: 24.6%
Equity: $1.62B
Total Debt: $0.00
Cash: $356.53M
Current Liabilities: $223.22M
Long-Term Debt: $0.00
Total Debt: $0.00
Total Equity: $1.62B
Shares: 87,579,000
Shares: 87,579,000
CapEx: -$5.73M
Shares: 87,579,000
Stock Price: $77.24
Net Income: $163.77M
Industry Benchmarks
Income Statement (Annual)
Last updated: Aug 15, 2026 10:44am (78d ago)| Metric | 2022 | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|---|
| Revenue | $424.7M | $486.0M | $572.9M | $651.0M | $729.0M |
| Cost of Revenue | $101.8M | $113.3M | $138.3M | $158.6M | $167.1M |
| Gross Profit | $322.9M | $372.7M | $434.6M | $492.4M | $561.9M |
| Operating Expenses | $219.4M | $242.3M | $291.8M | $311.3M | $351.9M |
| Operating Income | $103.4M | $130.4M | $142.8M | $181.1M | $210.0M |
| Net Income | $86.3M | $102.2M | $115.9M | $143.3M | $163.8M |
| EBITDA | $108.6M | $135.7M | $148.3M | $186.7M | $215.9M |
| EPS | $1.02 | $1.21 | $1.36 | $1.68 | $1.91 |
| EPS (Diluted) | $1.00 | $1.18 | $1.34 | $1.64 | $1.87 |
Balance Sheet (Annual)
Last updated: Aug 15, 2026 10:44am (78d ago)| Metric | 2022 | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|---|
| Cash & Equivalents | $213.4M | $276.4M | $321.0M | $236.1M | $356.5M |
| Total Current Assets | $292.1M | $358.7M | $418.2M | $352.6M | $482.1M |
| Total Assets | $1.2B | $1.3B | $1.5B | $1.6B | $1.9B |
| Current Liabilities | $133.4M | $169.6M | $203.6M | $217.0M | $223.2M |
| Long-Term Debt | — | — | — | — | — |
| Total Liabilities | $185.6M | $216.7M | $236.3M | $262.4M | $276.8M |
| Total Equity | $999.8M | $1.1B | $1.2B | $1.4B | $1.6B |
| Retained Earnings | $2.6M | $104.8M | $220.8M | $364.0M | $527.0M |
Cash Flow (Annual)
Last updated: Aug 15, 2026 10:44am (78d ago)| Metric | 2022 | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|---|
| Operating Cash Flow | $176.1M | $192.4M | $207.7M | $219.3M | $266.2M |
| Capital Expenditure | -$4.8M | -$6.1M | -$5.6M | -$6.7M | -$5.7M |
| Free Cash Flow | $171.3M | $186.3M | $202.1M | $212.5M | $260.5M |
| Acquisitions (net) | -$90.3M | -$115.6M | -$142.7M | -$290.2M | — |
| Net Debt Issued / (Repaid) | -$1.1M | — | — | — | — |
| Dividends Paid | — | — | — | — | — |
| Stock Buybacks | — | — | — | — | $-892,000 |
| Net Change in Cash | $79.8M | $62.9M | $44.6M | -$84.8M | $120.4M |
Growth Trends (YoY %)
Last updated: Aug 15, 2026 10:44am (78d ago)| Metric | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|
| Revenue Growth | +14.4% | +17.9% | +13.6% | +12.0% |
| Gross Profit Growth | +15.4% | +16.6% | +13.3% | +14.1% |
| Operating Income Growth | +26.1% | +9.5% | +26.8% | +15.9% |
| Net Income Growth | +18.5% | +13.4% | +23.6% | +14.3% |
| EBITDA Growth | +25.0% | +9.3% | +25.9% | +15.6% |
Deep Analysis
Risk : Reward — upside vs downside from this company's own quarters
Not computed yetNarrative Economics
market-narrative step).
Growth Outlook
Analyzed 2026-08-17 16:27The question every valuation on this page silently assumes: is this company likely to grow? Judged forward — the business, its category, the world — against what's already printed.
Claude Reading
Independent read first: Descartes is a legitimately high-quality compounder — 5-year revenue CAGR of 12.8% ($424.7M → $729.0M), operating margin expanding from 24.3% to 28.8%, net margin at 22.5%, FCF/net income conversion of 159% ($260.5M FCF vs $163.8M NI), zero debt, $356M cash. ROIC of 12.5% is decent but not spectacular for a "network monopoly." The problem is entirely price: 41x earnings, 9.3x sales, 29x EBITDA for a business growing revenue 12% YoY and earnings ~14% YoY. That's a PEG of ~3. Descartes has essentially never grown organically above the mid-teens; the compounding comes from disciplined tuck-in M&A on a mature logistics-EDI backbone. Paying 41x for 12% growth requires either (a) multi-decade duration certainty or (b) a re-acceleration catalyst. Neither is visible in the numbers.
On the prior models: the synthesis fair value of $56 (implying -27%) is directionally right but I'd argue slightly harsh. A quality-adjusted DCF on $260M FCF growing 11-13% with terminal ~3% and 9% discount gets you to roughly $60-65, not $56. So I partially agree with the "fully_priced" verdict but think the composite understates the moat premium the business genuinely earns — Descartes has 20+ years of consecutive margin expansion and near-zero customer churn in GLN. The Market Forces "strategically ambiguous" framing feels overwrought; there's nothing ambiguous about a business that has compounded operating income from $103M to $210M in four years. Where Market Forces is right: trade policy risk is real — Descartes' customs/compliance modules benefit from tariff complexity but suffer if freight volumes collapse, and 2024-2025 freight recession is not yet in the rearview. The narrative model's "anchored/moderate" framing is the most honest of the bunch: this isn't a cult stock, it's a quiet quality name where the premium is intellectual, not emotional. That kind of premium compresses slowly on disappointment, not violently.
The contrarian case worth taking seriously: revenue growth has been decelerating. 2022→2023 was +14.4%, 2023→2024 was +17.9% (M&A boost), 2024→2025 was +13.6%, 2025→2026 was +12.0%. The trend is down, and organic is likely 6-8% underneath the M&A. If you strip acquisition contribution, this looks like a 7% organic grower at 40x — that's a de-rating waiting to happen. Also worth flagging: ROE of 10.1% and ROA of 8.6% are mediocre for a "software monopoly" — the balance sheet is bloated with acquisition goodwill, which is why ROIC (12.5%) understates incremental returns but also warns that capital allocation isn't as pristine as the P&L suggests. The data file is thin on quarterly detail (no quarter-by-quarter revenue breakout shown), no insider activity, and no explicit debt figure though d/e is flagged zero — I'll trust that but note it's the kind of thing that changes fast with a large acquisition. Anomaly worth naming: the "Macro Headwinds" tag conflicts with "Above Sector Benchmarks" — freight is weak but Descartes is outperforming peers, which is exactly the pattern that inverts when logistics volumes recover and everyone else's growth reaccelerates faster than DSGX's.
GPT Reading
Descartes screens like exactly the kind of company that deserves a premium: five straight years of clean growth, from $424.7M of revenue in FY2022 to $729.0M in FY2026, while operating income more than doubled from $103.4M to $210.0M and net income rose from $86.3M to $163.8M. That is not financial engineering; margins have held up or improved as scale built, with gross margin at 77.1%, operating margin at 28.8%, and net margin at 22.5% in the latest year. The cash profile is especially strong. Operating cash flow was $266.2M versus $163.8M of net income, and free cash flow was $260.5M because capex is almost nonexistent at $5.7M. This is a software asset with real durability, not just an accounting story. A debt-free balance sheet with $356.5M of cash also matters here because it gives Descartes room to keep compounding via tuck-in M&A without financing risk.
What stands out to me is that the market is not obviously crazy to pay up, but it is paying for a very specific outcome: continued low-teens growth with no margin slippage. At $6.62B market cap and $77.24 per share, the stock trades around 9.3x sales, 41.3x earnings, and roughly 25x free cash flow on my math using the reported $260.5M FCF. That FCF multiple is less demanding than the P/E and EV/EBITDA optics suggest because cash conversion is excellent and stockholders are not underwriting heavy reinvestment needs. Still, for a company whose 5-year revenue CAGR is 12.8% and latest annual growth is about 12%, this is not cheap. The business quality is high enough that I would not anchor to a simplistic software peer multiple, but neither do I see evidence in these numbers of a step-change to 18-20% growth that would justify a “must-own compounder” premium much above the current one.
The most important contradiction in the supplied models is that “fully priced” may be directionally right, but a fair value near $56 feels too punitive given the balance sheet, cash generation, and consistency of execution. A company doing $260.5M of FCF on a net-cash balance sheet should not be valued like an ordinary mature application software vendor with shaky retention or cyclical margins. If I haircut growth to high-single-digits over time and assume some modest multiple compression, I still struggle to get all the way down to the mid-$50s unless I also assume acquisition returns deteriorate or margins contract materially. Put differently: at $77 the stock already discounts quality, but the underlying data support a quality premium. My read is not “overvalued because expensive,” but “close to full value because the current price already captures most of what the numbers currently prove.”
The best bear case against my view is straightforward and credible. Revenue growth has been good, not exceptional, and the market is paying almost 9x revenue for a business with 12% recent top-line growth and about 10% ROE. If logistics end markets soften, investors may suddenly decide this is a consolidator, not a platform, and rerate it toward 6-7x sales or the low-30s P/E range. On FY2026 numbers, even a 32x earnings multiple on $163.8M of net income implies meaningful downside from here, and an EV/revenue compression from 8.6x to 7.0x would also pull the stock materially lower. The bear also gets to point out that excellent FCF partly reflects very low capex, which is normal for software but does not by itself prove a widening moat. If organic growth is lower than the headline trend because acquisitions did some of the work, the premium can unwind faster than the fundamentals deteriorate.
What would change my mind in either direction is pretty specific. I would get more constructive above the current price if Descartes can push revenue growth into the mid-teens while keeping operating margin near 29% and free cash flow conversion above 90% of operating cash flow; that combination would show the platform narrative is translating into stronger monetization, not just stable execution. I would turn bearish if growth slips below 10% for a couple of periods, or if operating margin falls back toward 25-26% while acquisitions continue, because that would expose the current valuation as paying a premium for resilience that is no longer there. As it stands, this is a very good business at a price that mostly knows it.
Grok Reading
Descartes is a high-quality logistics software franchise whose numbers tell a story of disciplined compounding rather than explosive growth. Revenue has marched from $424.7M in fiscal 2022 to $729.0M in fiscal 2026 at a 12.8% CAGR, while net income nearly doubled from $86.3M to $163.8M and free cash flow hit $260.5M on just $5.7M of capex—an exceptional conversion profile. Gross margin sits at 77.1%, operating margin at 28.8%, and net margin at 22.5%, with zero debt and $356.5M in cash against $1.62B of equity. The operating leverage is real: earnings CAGR of 18.9% has outpaced revenue, and ROIC of 12.6% is respectable for a capital-light model. What stands out is how little of the story is about acceleration; recent revenue growth of 12% YoY and earnings growth of 14.3% are steady, not breakout, and the business looks every bit the mature earner the rule-based tag suggests.
At $77.24 and a $6.62B market cap, the market is capitalizing that steadiness at 41.3x earnings, 9.3x sales, and 29.1x EV/EBITDA. Those multiples imply the market is paying for durable mid-teens growth plus a structural premium for network stickiness in global trade compliance and logistics messaging. The internal valuation composite at roughly $56—about 27% below the current price—aligns with what the cash-flow math supports if you refuse to underwrite perpetual multiple expansion. FCF yield on the current enterprise is only around 4%, which is thin insurance against any slowdown in freight volumes or customer expansion. Macro headwinds flagged in the secondary signals matter here: logistics tech demand is not insulated from trade-policy noise or softer shipment activity, and a 12% grower does not deserve a growth-stock multiple indefinitely.
The strongest case against calling this overvalued rests on the quality of the cash engine and the embedded moat narrative. Opponents would correctly note that FCF quality is pristine, the balance sheet is a fortress, and Rule-of-40 arithmetic (roughly 12% growth plus ~29% operating margin) clears 40, justifying a premium to ordinary software. They would also argue that earnings power is still compounding into the multiple—if NI keeps growing at mid-teens, the forward P/E compresses without the stock needing to fall—and that mission-critical network effects and switching costs make the 37% narrative premium sticky rather than speculative. I weigh that differently because the data show no clear acceleration that would validate expanding or even holding a 29x EV/EBITDA print; organic growth remains low-double-digit, ROE is only 10.1%, and the platform-monopoly story has moderate intensity and durability that can unwind with one soft logistics cycle. Quality is already in the price; upside optionality is not.
I would reverse course if the next two quarters show organic revenue re-accelerating sustainably above 15–16% with stable or expanding operating margins, or if the stock retraces toward the mid-$50s to low-$60s where the free-cash-flow yield and growth rate rebalance. Sustained evidence that network pricing power is lifting net retention and expanding addressable wallet share beyond the current trajectory would also force a re-rating of the multiple. Absent those, the setup favors waiting.
Big-3 Panel — where each AI stands
Advanced Analysis Forensic deep-dive · separate lenses
Descartes shows a textbook mature-earner profile: revenue compounded from $424.7M (2022) to $729.0M (2026), a ~14.5% CAGR, with gross margin steady in the 75-77% band and operating margin expanding from 24.4% to 28.8%. Net income more than doubled ($86.3M to $163.8M) and FCF grew from $171.3M to $260.5M, i.e. FCF conversion of ~160% of net income in the latest year (OCF/NI 1.77x). Earnings quality checks are pristine: accruals -6.1% of assets, Beneish M -2.56, Altman Z 15.65 -- these are numbers you see in genuinely clean software P&Ls.
Verify before trusting this (5)
- Organic vs acquired revenue growth split and recent M&A cadence/multiples paid
- Customer concentration and net revenue retention in the Global Logistics Network
- Goodwill/intangibles as % of assets and any impairment history
- Capitalized software development costs treatment in FCF
- Segment/geographic exposure to tariff and trade-volume cyclicality
The composite fair value sits at $56.14 against a $77.24 price - roughly 27% overvalued on the blended read. The DCF alone gets to $72.34 (still ~6% below price), while the EPV floor at $23.75 shows how much of today's cap rests on future growth rather than current earnings power. Even taking the most generous input (DCF) and adding a quality premium for the fortress balance sheet and clean earnings, you struggle to justify materially above the mid-$70s. Earnings quality is high, so no haircut is warranted - but that argues against paying a discount, not for paying a premium. The market is capitalizing Descartes as a bona fide network-effect monopoly with durable pricing power and a productive M&A flywheel. That may prove right, but it is already the base case in the price. Bull-case optionality (accelerating logistics digitization, tuck-in accretion) is fully embedded; any hiccup in organic growth or deal cadence would compress the multiple quickly given the ~27% premium to blended FV. This is a good business trading at a full price, not a mispricing.
Verify before trusting this (4)
- Organic (ex-acquisition) revenue growth rate in latest filings
- Recent M&A cadence, multiples paid, and post-deal margin contribution
- Net cash position and capital return posture (buybacks vs dry powder)
- Any guidance or commentary on pricing power / net retention
DSGX sits in an unusual sentiment pocket: the market regime is mildly risk-on (+52), but with a beta of 0.19 the tape barely moves this name either way. Macro pressure from 4.63% 10y yields and a 26.2 market PE is a generic headwind for all software multiples, but Descartes' defensive profile and steady FCF trajectory blunt the transmission - this is not the kind of high-duration, story-driven software that gets whipsawed by rate moves. The platform-monopoly narrative (moderate intensity, moderate durability, low cult) provides a quiet floor: the market is willing to pay a ~37% premium to DCF because it believes the logistics-plumbing story, and that belief is not currently cracking. But it is also not accelerating - intensity is only moderate and the cult coefficient is low, so there is no euphoric bid pulling the stock higher either. Momentum is genuinely constructive (12.8% CAGR, improving trend), which is a real if understated tailwind - the tape is not fighting the chart. Net-net, the forces roughly offset: a soft macro headwind on software multiples and a mature-utility bear whisper on one side, a supportive narrative and healthy price trend on the other, with beta so low that neither side hits with force.
Verify before trusting this (4)
- Any crack in the platform-monopoly narrative (churn disclosure, competitor win, pricing pushback) that would flip the story from supportive to neutral
- Freight and logistics volume data - a further leg down could pull DSGX into a weak-sector sentiment bucket
- Analyst target revisions - a wave of cuts would signal the premium multiple is losing sponsor support
- 10y yield above 4.75-5% would materially pressure premium software multiples even for low-beta names
The world is getting more complicated for goods movement and that is structurally good for Descartes: tariff regimes in flux, re-routed supply chains, more customs jurisdictions per shipment, tighter sanctions screening. That raises the compliance and trade-content demand curve. The offsetting force is the same disorder suppressing physical volumes — soft container and parcel throughput throttles the per-transaction lines, so the net effect is a growth band that stays positive but narrow rather than an inflection. Macro backdrop is a headwind (10y 4.63) in two ways: it pressures logistics customers' capex appetite, and it raises the bar on acquisition math for a company whose headline growth depends on buying assets. Application-software demand is in contraction phase, so multiple-year budget expansion tailwinds should not be assumed. Net: the demand for the plumbing keeps rising; the meter on the plumbing runs slower than the plumbing's importance implies.
Prediction unavailable. valuation-synthesis has no result for DSGX — the prediction needs its fair-value anchors.