Descartes Story

DSGX -- USA Stock

USD 62.50 0.76 1.20%

Macroaxis Story

Descartes Systems is scheduled to announce its earnings today. The next earnings report is expected on the 3rd of March 2021. Descartes Systems Assets Non Current are fairly stable at the moment as compared to the past year. Descartes Systems reported Assets Non Current of 842.38 Million in 2019. Cash and Equivalents is likely to rise to about 47.3 M in 2020, whereas Average Assets are likely to drop slightly above 659.4 M in 2020. While some millenniums are indifferent towards technology space, it makes sense to break down The Descartes Systems as a unique investment alternative. We will inspect if it could be a much better year for Descartes Systems shareholders.

Published over a month ago

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Will Descartes Systems (NASDAQ:DSGX) be in financial trouble before January?

This firm currently holds 13.61 M in liabilities with Debt to Equity (D/E) ratio of 0.02, which may suggest Descartes Systems is not taking enough advantage from borrowing. Our advice module provides unbiased investment recommendation that can be used to complement current average analyst sentiment on The Descartes Systems. Our advice engine provides an advice for the firm potential to grow from the perspective of an investor's risk tolerance and investing horizon.

Descartes Systems financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Descartes Systems, including all of Descartes Systems's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Descartes Systems assets, the company is considered highly leveraged. Understanding the composition and structure of overall Descartes Systems debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.

Understanding Descartes Total Debt

Descartes Systems liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. Descartes Systems has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on Descartes Systems balance sheet include debt obligations and money owed to different Descartes Systems vendors, workers, and loan providers. Below is the chart of Descartes main long-term debt accounts currently reported on its balance sheet.

You can use The Descartes Systems financial leverage analysis tool to get a better grip on understanding its financial position

How important is Descartes Systems's Liquidity

Descartes Systems financial leverage refers to using borrowed capital as a funding source to finance The Descartes Systems ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Descartes Systems financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Descartes Systems's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions. It is good to see analyst projects for Descartes Systems, but it might be worth checking our own buy vs. sell analysis

Is Descartes Systems valued reasonably by the market?

The company reported the previous year's revenue of 335 M. Net Income was 42.69 M with profit before overhead, payroll, taxes, and interest of 240.07 M.

Asset Breakdown

842.3 M

Goodwill

756.5 M

Total Assets

Current Assets

	Total Assets	756.48 Million
	Current Assets	93.35 Million
	Assets Non Current	908.88 Million
	Goodwill	842.28 Million
	Tax Assets	22.14 Million

How will Descartes investors react to the next slide?

Current total risk alpha is at -1.11. The Descartes Systems is displaying above-average volatility over the selected time horizon. Investors should scrutinize The Descartes Systems independently to ensure intended market timing strategies are aligned with expectations about Descartes Systems volatility.

Our Final Take On Descartes Systems

While some other companies in the software?application industry are either recovering or due for a correction, Descartes may not be as strong as the others in terms of longer-term growth potentials. With an impartial outlook on the current market volatility, it may be better to hold off any inventment activity and neither take over nor exit any shares of Descartes Systems at this time. The The Descartes Systems risk-reward trade off is not appealing enough to do any trading. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Descartes Systems.

About Contributor

Ellen Johnson is a Member of Macroaxs Editorial Board. Ellen covers public companies in North America, focusing primarily on valuation and volatility. Six years of experience in predictive investment analytics and risk management. View Profile

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of The Descartes Systems. Please refer to our Terms of Use for any information regarding our disclosure principles.

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