Company Reports

Descartes operates the largest neutral shipping network in the world, connecting 200,000 shippers, manufacturers, suppliers, retailers, and government agencies and enabling the sharing of tens of billions of shipping-related transactions each year. The firm also offers a broad portfolio of solutions that solve a variety of challenges in the shipping industry.

We are raising our fair value estimate to $81 (CAD 110) per share, from $76 (CAD 103) previously, based on modestly higher margin estimates after Descartes reported solid results for its fiscal fourth quarter, including upside to both revenue and adjusted EBITDA relative to our expectations. We continue to see shares as fairly valued. Transaction volumes continue to face macro-related pressure but are performing reasonably well, while software subscription revenue remains resilient. Margins continue to improve and have effectively returned to levels from before the GroundCloud acquisition. The famously conservative management team was as excited as we have ever heard about the firm’s product portfolio, its competitive position, its margin opportunity, and the acquisition environment. Our opinion that the continued evolution of the supply chain toward more complexity and more exogenous shocks benefits Descartes and helps attract more customers to its network remains unchanged.

Descartes operates the largest neutral shipping network in the world, connecting 200,000 shippers, manufacturers, suppliers, retailers, and government agencies and enabling the sharing of tens of billions of shipping-related transactions each year. The firm also offers a broad portfolio of solutions that solve a variety of challenges within the shipping industry.

The Descartes Systems Group operates the largest neutral shipping network in the world, connecting 200,000 shippers, manufacturers, suppliers, retailers, and government agencies and enabling the sharing of 19 billion shipping-related transactions each year. The company also offers a broad portfolio of software solutions that solve real business challenges in the shipping industry.

Descartes reported solid results for its fiscal third quarter, including upside to revenue and adjusted EBITDA relative to what we anticipated. Transaction volumes held up reasonably well, while software subscription revenue was resilient. However, margins were a highlight and received a boost from recent restructuring actions. Management remains excited about the acquisition environment, which we continue to believe will begin to bolster growth in the coming quarters. Management was once again prudently cautious on its outlook given the environment, but noted a variety of positive indicators such as good Black Friday announcements. Our opinion that the continued evolution of the supply chain toward more complexity and exogenous shocks benefits Descartes and helps attract more customers to its network remains unchanged. Based on good results, we modestly increased our near-term estimates for growth and margins. As a result, we are raising our fair value estimate to $76 (CAD 103) per share, from $74 (CAD 101) previously, and view the shares as fairly valued.

The Descartes Systems Group operates the largest neutral shipping network in the world, connecting 200,000 shippers, manufacturers, suppliers, retailers, and government agencies and enabling the sharing of 19 billion shipping-related transactions each year. The company also offers a broad portfolio of software solutions that solve real business challenges in the shipping industry.

Descartes reported strong second-quarter results, with revenue and adjusted EBITDA easily topping our estimates. Demand indicators are positive and consistent with recent quarters. GroundCloud integration efforts are underway and seem to be off to a good start in terms of overall margin performance for the company. While the company made no acquisitions this quarter, management is optimistic on the deal-making front, which we think should help drive growth through fiscal 2025. Management was cautious in its outlook, which is not unusual. Our opinion that the continued evolution of the supply chain toward more complexity and more exogenous shocks benefits Descartes and helps attract more customers to their network remains unchanged. Based on strong results, we modestly increased our near-term estimates for both growth and margins. As a result, we raise our fair value estimate to $74 (CAD 101) per share, from $72 (CAD 98) previously, and view the shares as fairly valued.

The Descartes Systems Group operates the largest neutral shipping network in the world, connecting 200,000 shippers, manufacturers, suppliers, retailers, and government agencies and enabling the sharing of 19 billion shipping-related transactions each year. The company also offers a broad portfolio of software solutions that solve real business challenges in the shipping industry.

The Descartes Systems Group operates the largest neutral shipping network in the world, connecting 200,000 shippers, manufacturers, suppliers, retailers, and government agencies and enabling the sharing of 19 billion shipping-related transactions each year. The company also offers a broad portfolio of software solutions that solve real business challenges in the shipping industry.

Descartes reported strong first-quarter results, with revenue and adjusted EBITDA coming in above our estimates. Management noted continued normalization of the shipping industry toward its prepandemic state, as United States container imports increase, port delays lessen, and the freight spot price decreases. We were also pleased to hear integration efforts following the recent acquisitions of both Localz and GroundCloud are underway. With integration efforts and persistent currency headwinds expected to weigh on near-term results, management provided a prudent outlook and maintained its 40%-45% adjusted EBITDA margin outlook for the fiscal year. We view headwinds as transitory and hold our long-term view that Descartes is well-positioned to address the heightening complexity of global transportation networks. With this, we are raising our fair value estimate to $72 (CAD 98) per share, from $68 (CAD 91) previously, and view the shares as slightly overvalued.

Descartes reported solid fourth-quarter results, with revenue and adjusted EBITDA margin that matched our expectations. Management noted improving macroeconomic factors within the shipping industry paired with a strong demand environment, even with increasing tone of caution from customers entering the next fiscal year. Management announced its acquisitions of Supply Vision, a ship management solutions provider and GroundCloud, a final-mile carrier solutions provider, which is the firm’s largest acquisition to date. With expected acquisition integration efforts as well as persistent currency headwinds, management provided a conservative outlook and maintained the 40% to 45% adjusted EBITDA margin outlook for the fiscal year. We view current obstacles as transitory and expect the improving shipping industry to act as a tailwind for results in the near-term. We hold our long-term view that Descartes is well-positioned to address the heightening complexity of global transportation networks, especially as the firm's portfolio expands.

The Descartes Systems Group operates the largest neutral shipping network in the world, connecting 200,000 shippers, manufacturers, suppliers, retailers, and government agencies and enabling the sharing of 19 billion shipping-related transactions each year. The company also offers a broad portfolio of software solutions that solve real business challenges in the shipping industry.

Descartes produced a mixed third quarter, with revenue short of our expectations and adjusted EBITDA margin slightly ahead. Management noted the demand environment remained good even as the tone among its customers was increasingly cautious. Management previewed adjusted EBITDA margin for fiscal 2024 at 40% to 45%, which, while positive, is where it has been operating at over the last two years and inspires little change to our estimates. Based on results and commentary, we are lowering our growth assumptions modestly for fiscal 2024 and accordingly are lowering our fair value estimate to $67 (CAD 91) per share, from $69 (CAD 91, no change due to currency moves) previously. Shares remain fairly valued, in our view. We see supply chain conditions persisting throughout the rest of the year, given the conflict in Ukraine and 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.

The Descartes Systems Group operates the largest neutral shipping network in the world, connecting 200,000 shippers, manufacturers, suppliers, retailers, and government agencies and enabling the sharing of 19 billion shipping-related transactions each year. The company also offers a broad portfolio of software solutions that solve real business challenges in the shipping industry.

Descartes produced solid second-quarter results, with revenue and adjusted EBITDA slightly ahead of our expectations. Management noted the demand environment was good and that shipping volumes are healthy even if shipping rates have begun to ease. We are maintaining our fair value estimate for narrow-moat Descartes at $69 (CAD 91) per share and see shares as fairly valued. We see supply chain conditions persisting throughout the rest of the year given the conflict in Ukraine and 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.

The Descartes Systems Group operates the largest neutral shipping network in the world, connecting 200,000 shippers, manufacturers, suppliers, retailers, and government agencies and enabling the sharing of 19 billion shipping-related transactions each year. The company also offers a broad portfolio of software solutions that solve real business challenges in the shipping industry.

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.

Descartes delivered solid fourth-quarter results in typical fashion for the company, with revenue and adjusted EBITDA slightly ahead of our expectations. We view Descartes as being well-positioned to address the heightening complexity of global transportation networks, especially as the firm's portfolio grows, both organically and through bolt-on acquisition activity. We maintain our fair value estimate for narrow-moat Descartes at $69 (CAD 88) per share and see shares as fairly valued after shares have pulled back over the last several months. We see supply chain conditions persisting throughout the rest of this year especially given the conflict in the Ukraine, which may help near-term results, but ultimately believe our long-term forecast still applies.

The Descartes Systems Group operates the largest neutral shipping network in the world, connecting 200,000 shippers, manufacturers, suppliers, retailers, and government agencies and enabling the sharing of 19 billion shipping-related transactions each year. The company also offers a broad portfolio of software solutions that solve real business challenges in the shipping industry.

The Descartes Systems Group operates the largest neutral shipping network in the world, connecting 200,000 shippers, manufacturers, suppliers, retailers, and government agencies and enabling the sharing of 19 billion shipping-related transactions each year. The company also offers a broad portfolio of software solutions that solve real business challenges in the shipping industry.