The Descartes Systems Group Inc. (DSGX) Stock Analysis
Score ACompounder · Grade B · Bearish
$72.97
$125.36
+71.8%
10/10
B
Compounder
Investment Thesis
Good opportunity: Solid company with good risk/reward at 10.0:1.
For New Investors
Quantitative score: high
For Current Holders
Quantitative score: neutral
Buy if
- Price drops 15-20% (improves asymmetry)
- Bull scenario catalysts materialize
- Market-wide correction creates opportunity
Sell if
- Bear scenario triggers occur
- Quality metrics deteriorate (ROIC declining)
- Better alternatives emerge
Valuation
Fair Value estimate: $125.36 (+71.8%). Significantly undervalued.
PEG-Based EPS
$132.34
FCF DCF Model
$145.58
EV/EBITDA
$90.51
Blended Fair Value
$125.36
Confidence
High
Methods
PEG-Based EPS, FCF 2-Stage DCF, EV/EBITDA
Quality Analysis
76/120 points
Investable
ROE (3Y Avg)
10.0%
ROIC-WACC Spread
3.5%
D/E Ratio
0.0x
Current Ratio
2.2x
Interest Coverage
243x
FCF Positive Years
3/3
Quality Flags
- Low ROE: 10.0% (need >18%, got 7/20 pts)
- ROIC spread: 3.4pp (got 9/25 pts)
- Volatile gross margins: std dev 4.5pp (need <3.0pp)
Market Sentiment
Wall Street Consensus
$98.50
+35.0% Upside
13 analysts
Range: $82.00 — $118.00
Rating: Buy
Our model aligns with Wall Street consensus.
Trend & Technical
Price ($72.97) is 10.6% below SMA 200 ($81.62). Bearish trend. Caution on entry.
Tech Score 34/100 — Weak technicals. Bearish bias in trend or momentum.
Risk & Reward
Asymmetry Ratio
10.00:1
Expected Return
+58.0%
Bull Upside
+106.1%
Bear Downside
-10.0%
Excellent asymmetry: >3:1 ratio. Upside significantly outweighs downside.
Verdict: Very Favorable
Scenario Analysis
Bear
Base
Bull
Buy Zone & Action Plan
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AI Executive Summary
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Technical Analysis
RSI, MACD, moving averages, trend signals, and momentum indicators.
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Frequently Asked Questions
What is the fair value of DSGX?
Based on our multi-method conviction analysis, the estimated fair value of The Descartes Systems Group Inc. (DSGX) is $125.36. This is calculated by blending PEG-Based EPS, FCF 2-Stage DCF, EV/EBITDA and applying a quality premium of 0% based on the company's fundamentals. The confidence level of this estimate is high.
Is DSGX a buy, sell, or hold?
DSGX currently has a BUY rating with a conviction score of 10/10. Good opportunity: Solid company with good risk/reward at 10.0:1. Quantitative score: high.
Is DSGX a high-quality stock?
The Descartes Systems Group Inc. has a quality grade of B (76/120 points), rated as Investable. Key metrics include ROE of 10.0%, ROIC-WACC spread of 3.5%, and D/E ratio of 0.0x.
What type of stock is DSGX?
DSGX is classified as a "compounder" in our framework. High P/E: 36.3x, Low dividend (reinvesting): 0.0%, Moderate growth: 14.8%, Compounder growth range: 14.8%, Consistent FCF: 3/3 years positive
What do Wall Street analysts say about DSGX?
13 Wall Street analysts have a consensus price target of $98.50 for DSGX, representing +35.0% upside. Targets range from $82.00 to $118.00. The consensus recommendation is "Buy". Our model aligns with Wall Street consensus.
What are the risks of investing in DSGX?
The risk/reward asymmetry ratio for DSGX is 10.00:1, rated as Very Favorable. Excellent asymmetry: >3:1 ratio. Upside significantly outweighs downside. The expected return is +58.0%, with bull case upside of +106.1% and bear case downside of -10.0%.
What is the current trend for DSGX?
DSGX is in a bearish trend. Price ($72.97) is 10.6% below SMA 200 ($81.62). Bearish trend. Caution on entry. The technical score is 34/100.
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Last updated: June 15, 2026 · Framework version 3.7
This analysis is for informational purposes only and should not be considered financial advice. Always do your own research before making investment decisions.