The Descartes Systems Group Inc. (TSE:DSG) Analysts Are Pretty Bullish On The Stock After Recent Results
It's been a good week for The Descartes Systems Group Inc. (TSE:DSG) shareholders, because the company has just released its latest annual results, and the shares gained 2.8% to CA$123. It was a credible result overall, with revenues of US$573m and statutory earnings per share of US$1.34 both in line with analyst estimates, showing that Descartes Systems Group is executing in line with expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Descartes Systems Group after the latest results.
View our latest analysis for Descartes Systems Group
Taking into account the latest results, the consensus forecast from Descartes Systems Group's eleven analysts is for revenues of US$631.7m in 2025. This reflects a decent 10% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 25% to US$1.70. Before this earnings report, the analysts had been forecasting revenues of US$626.6m and earnings per share (EPS) of US$1.67 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The consensus price target rose 7.6% to CA$110despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Descartes Systems Group's earnings by assigning a price premium.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Descartes Systems Group's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 10% growth on an annualised basis. This is compared to a historical growth rate of 14% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 17% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Descartes Systems Group.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Descartes Systems Group going out to 2027, and you can see them free on our platform here.
We also provide an overview of the Descartes Systems Group Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
