The Descartes Systems Group

DSGX

Software - Application · Technology

Price

$78.21

+0.38 (+0.49%)

Market Cap

$6.70B

Exchange

NASDAQ

Winston Score

Winston is curious

A decent business — some strong pillars, some weaker.

Data as of Aug 23, 2026 · filings through Apr 30, 2026

How the score breaks down

Quality

Strong

Growth

Exceptional

Cash Flow

Exceptional

Stability

Good

Valuation

Good

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Share count rising — dilution

+1.6% over 4y

The company has issued more shares over this period, which dilutes each existing shareholder’s stake.

Diluted shares outstanding: 86.2M (2022) → 87.6M (2026)

Winston Score History

The full picture

Descartes Systems Group is a Canadian software company that helps businesses move goods around the world more efficiently. Its tools handle things like route planning for delivery trucks, customs and trade compliance filings, and tracking shipments across global supply chains. Customers include logistics companies, freight brokers, retailers, and manufacturers — essentially any business that ships products.

Descartes makes money primarily through subscription fees and transaction-based charges, meaning customers pay regularly to use its cloud-based platform. The company operates globally, with a strong presence in North America and Europe, and generates roughly $600 million in annual revenue. Its competitive edge comes from a large network of connected trading partners, carriers, and government agencies, which makes its platform more valuable the more people use it — a classic network effect. The main risk is that global trade volumes can slow during economic downturns, which would reduce the transaction fees that make up a meaningful portion of its revenue.

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Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+15.7% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

+35.7% YoY

YoY Growth Rate

EPS growth accelerating

R&D Spend

$108M/ year

↑ Rising (+13% vs prior year)

14.4% of revenue

In line with sector average (15%)

Investing heavily in future products and technology

Insider Activity

0.2%ownership

→ Flat

Insider ownership roughly steady over the past year

Cash Position

Cash flow positive

$377M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth + cash flow

The Descartes Systems Group is a rare growth stock that's already generating positive cash flow while growing at 16%. The Winston Score doesn't fully credit this transition from "burner" to "earner."

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

Each metric is explained in plain language so you know exactly what you're looking at. Start your free trial now.

Quality

Profit per sale

Gross Margin

68.6%

Premium pricing power — 68.6% gross margin

Profit after running costs

Operating Margin

33.3%

Excellent — 33.3% operating margin

Return on the money invested

ROCE

14.4%

Good — 14.4% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales growth

Sales YoY

+12.8%

Fast-growing sales (+12.8% YoY)

Profit growth

EPS YoY

+21.2%

Earnings growing fast (+21.2% YoY)

Healthy double-digit earnings growth — what compounders look like.

How steady the profit is

EPS Consistency

8/8 quarters

Every recent quarter grew earnings vs last year

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Cash Flow

Profit that turns into cash

Cash Conversion

164%

Turns 164% of profit into real cash

Spare cash per sale

FCF Margin

37.5%

Converts sales into free cash efficiently (37.5%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

What it owes vs what it owns

Debt / Equity

N/A

Data not available

Covers its interest

Interest Cover

243.60x

Comfortably covers interest (243.6x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

Price vs profit

P/E Ratio (TTM)

38.0x

Pricey — P/E 38.0

P/E over 35. The market is pricing in heavy, sustained growth.

Cheaper or dearer next year

P/E vs Forward

+8.1

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (38.0 → 29.8)

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Dividends

Not applicable for this business.

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