Solid and Steady Results for Descartes as Global Supply Chain Issues Persist; FVE Steady at $69

Descartes delivered typically solid first-quarter results, with revenue slightly ahead and adjusted EBITDA in line relative to our expectations. We are maintaining our fair value estimate for narrow-moat Descartes at $69 (CAD 88) per share and see shares as increasingly attractive. We see supply chain conditions persisting throughout the rest of this year given the conflict in Ukraine and the easing of China lockdowns, which may help near-term results but do not affect our long-term forecast. We continue to view Descartes as being well-positioned to address the heightening complexity of global transportation networks, especially as the firm's portfolio expands and geopolitical issues flare up. Also during the quarter, the firm applied to the Toronto Stock Exchange to repurchase up to 10% of its shares in the coming 12 months. We still see management preferring acquisitions over buybacks, but the balance sheet has $212 million in cash with no debt.