What is our July take on Descartes Sys (NASDAQ:DSGX) valuation?

As many investors are getting excited about technology space, it is fair to break down Descartes Sys Group. We will evaluate why we are still confident in anticipation of a recovery. Is the firm valuation sustainable? Here I will cover a perspective on valuation of Descartes to give you a better outlook on taking a position in this stock.
Published over a year ago
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Reviewed by Michael Smolkin

Descartes Sys currently holds 13.06 M in liabilities with Debt to Equity (D/E) ratio of 0.01, which may suggest Descartes Sys 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 Descartes Sys Group. Our advice engine provides an advice for the firm potential to grow from the perspective of an investor's risk tolerance and investing horizon.
We determine the current worth of Descartes Systems Group using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Descartes Systems based exclusively on its fundamental and basic technical indicators. By analyzing Descartes Systems's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Descartes Systems's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Descartes Systems. We calculate exposure to Descartes Systems's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Descartes Systems's related companies.

Descartes Systems Investment Alerts

Descartes investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Descartes Systems Group performance across your portfolios.Please check all investment alerts for Descartes

Descartes Systems Valuation Ratios as Compared to Competition

Our valuation model uses many indicators to compare Descartes value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Descartes Systems competition to find correlations between indicators driving the intrinsic value of Descartes.

What is driving Descartes Systems Investor Appetite?

The small slide in market price for the last few months could raise concerns from investors as the firm it trading at a share price of 58.15 on 82,500 in volume. The company executives did not add much value to Descartes Sys investors in May. However, diversifying your holdings with Descartes Sys Group or similar stocks can still protect your portfolio during high-volatility market scenarios. The stock standard deviation of daily returns for 90 days investing horizon is currently 1.57. The below-average Stock volatility is a good sign for longer-term investment options and for buy-and-hold investors.
 2018 2019 2020 2021 (projected)
Cost of Revenue74.99 M85.72 M89.91 M81.15 M
Consolidated Income31.28 M37 M52.1 M56.21 M

Margins Breakdown

Descartes profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Descartes Sys itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Descartes Sys profit margins.
0.14
Profit Margin
0.37
EBITDA Margin
EBITDA Margin0.37
Gross Margin0.8
Profit Margin0.14
Descartes Sys Earnings Before Interest Taxes and Depreciation Amortization EBITDA is fairly stable at the moment. Also, Descartes Sys Average Assets is fairly stable at the moment.

Descartes Sys is projected to stay a bit over $59 in July

Skewness just dropped to -7.38, may suggest upcoming price decrease. Descartes Sys Group is displaying above-average volatility over the selected time horizon. Investors should scrutinize Descartes Sys Group independently to ensure intended market timing strategies are aligned with expectations about Descartes Sys volatility. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Descartes Sys' stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Descartes Sys' stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

While few other entities in the software—application industry are either recovering or due for a correction, Descartes Sys may not be performing as strong as the other in terms of long-term growth potentials. With a relatively neutral outlook on the current economy, it is better to hold off any trading of Descartes as the current risk-reward utility is not appealing enough. 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 Sys.

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Editorial Staff

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 Raphi Shpitalnik do not own shares of Descartes Systems Group. Please refer to our Terms of Use for any information regarding our disclosure principles.

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