Fact based stock research
Descartes Systems (TSX:DSG)

CA2499061083

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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Descartes Systems stock research in summary

descartes.comhome

ANALYSIS: With an Obermatt Combined Rank of 78 (better than 78% compared with investment alternatives), Descartes Systems (Application Software, Canada) shares have much better financial characteristics than comparable stocks. Shares of Descartes Systems are low in value (priced high) with a consolidated Value Rank of 20 (worse than 80% of alternatives). But they show above-average growth (Growth Rank of 73) and are safely financed (Safety Rank of 92, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 78, is a strong buy recommendation based on Descartes Systems's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Descartes Systems exhibits low value (Obermatt Value Rank of 20), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 73). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 92) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	20
Growth Rank	73
Safety Rank	92
Combined Rank	78

Country	Canada
Industry	Application Software
Index	NASDAQ, TSX Composite
Size class	Small

31-Jul-2025. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Descartes Systems

RESEARCH HISTORY	2022	2023	2024	2025
VALUE
VALUE	11	21	21	20
GROWTH
GROWTH	61	51	73	73
SAFETY
SAFETY	85	100	95	92
SENTIMENT
SENTIMENT	63	61	85	^new
360° VIEW
360° VIEW	67	74	78	^new

Most recent update of the stock research: 31-Jul-2025. Financial reporting date used for calculating ranks: 31-Jan-2025. Stock research history is based on the Obermatt Method. The higher the rank, the better Descartes Systems is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2022	2023	2024	2025
VALUE
VALUE	11	21	21	20
GROWTH
GROWTH	61	51	73	73
SAFETY
SAFETY	85	100	95	92
COMBINED
COMBINED	54	77	86	78

Last update of combined financial performance: 31-Jul-2025. Stock analysis on combined financial performance: The higher the rank of Descartes Systems the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 20 (worse than 80% compared with alternatives), Descartes Systems shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Descartes Systems. Price-to-Sales is 9 which means that the stock price compared with what market professionals expect for future profits is higher than 91% of comparable companies, indicating a low value concerning Descartes Systems's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 49, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Descartes Systems. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 20 and Dividend Yield, which is lower than 99% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 20, is a sell recommendation based on Descartes Systems's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Descartes Systems? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Descartes Systems? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Descartes Systems may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2022	2023	2024	2025
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	9	10	13	9
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	32	34	28	20
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	45	36	53	49
DIVIDEND YIELD
DIVIDEND YIELD	1	1	1	1
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	11	21	21	20

Last update of Value Rank: 31-Jul-2025. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Descartes Systems; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 73 (better than 73% compared with alternatives), Descartes Systems shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all four indicators above average for Descartes Systems. Sales Growth has a value of 58, which means that, currently, professionals expect the company to grow more than 58% of its competitors. The same is valid for Profit Growth with a value of 54 and for Capital Growth with 73. In addition, Stock Returns had an above-average rank value of 53, which means they have been higher than 53% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 73, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Descartes Systems exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more

GROWTH METRICS	2022	2023	2024	2025
REVENUE GROWTH
REVENUE GROWTH	39	48	52	58
PROFIT GROWTH
PROFIT GROWTH	80	29	69	54
CAPITAL GROWTH
CAPITAL GROWTH	19	64	49	73
STOCK RETURNS
STOCK RETURNS	85	43	83	53
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	61	51	73	73

Last update of Growth Rank: 31-Jul-2025. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Descartes Systems.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 92 (better than 92% compared with alternatives) for 2025, the company Descartes Systems has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Descartes Systems is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Descartes Systems. Leverage is at a rank of 100, meaning the company has a below-average debt-to-equity ratio. It has less debt than 100% of its competitors. Liquidity is also good at a rank of 95, meaning the company generates more profit to service its debt than 95% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 31, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 69% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 92 (better than 92% compared with alternatives), Descartes Systems has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Descartes Systems. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. Investors may have a short-term debt challenge with Descartes Systems and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2022	2023	2024	2025
LEVERAGE
LEVERAGE	100	100	100	100
REFINANCING
REFINANCING	19	31	24	31
LIQUIDITY
LIQUIDITY	84	98	95	95
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	85	100	95	92

Last update of Safety Rank: 31-Jul-2025. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Descartes Systems and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2022	2023	2024	2025
ANALYST OPINIONS
ANALYST OPINIONS	n/a	34	42	^new
OPINIONS CHANGE
OPINIONS CHANGE	50	50	50	^new
PRO HOLDINGS
PRO HOLDINGS	47	56	79	^new
MARKET PULSE
MARKET PULSE	98	80	86	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	63	61	85	^new

Last update of Sentiment Rank: 31-Jul-2025. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Descartes Systems.
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