The Descartes Systems Group Inc. (NASDAQ: DSGX) has received a consensus rating of “Moderate Buy” from twelve brokerages, according to Marketbeat Ratings. Analysts have issued a variety of recommendations, with five rating the stock as a hold, six recommending a buy, and one analyst giving it a strong buy rating. The average price target for the next twelve months is set at $116.30.
Analysts Adjust Price Targets
Recent reports from several research firms have highlighted changes in their price targets for Descartes’ stock. Notably, Barclays reduced its target from $108.00 to $106.00 while maintaining an “equal weight” rating as of December 4, 2023. Conversely, Morgan Stanley increased its target price from $100.00 to $110.00, also assigning an “equal weight” rating in a research note dated December 9, 2023.
In a separate note, Weiss Ratings reaffirmed a “hold (c)” rating on the stock, while Raymond James Financial upgraded Descartes from a “market perform” to an “outperform” rating, setting a price objective of $118.00. Scotiabank adjusted its target price down from $127.00 to $115.00, maintaining an “outperform” rating.
Quarterly Earnings Exceed Expectations
The Descartes Systems Group recently announced its quarterly earnings on December 3, 2023. The technology company reported earnings per share (EPS) of $0.50, which surpassed analysts’ expectations of $0.46 by $0.04. Revenues for the quarter amounted to $186.78 million, exceeding analyst forecasts of $184.24 million. This represents an 11.2% increase in revenue compared to the same quarter last year, when the company reported an EPS of $0.42. Analysts predict that Descartes will achieve an EPS of 1.64 for the current fiscal year.
The company’s performance was bolstered by a return on equity of 10.57% and a net margin of 22.10%, indicating strong operational efficiency.
Institutional Investor Activity
Recent activity among hedge funds and institutional investors reflects growing interest in Descartes. Ritholtz Wealth Management increased its holdings by 1.7% during the third quarter, now owning 6,654 shares valued at $627,000. Meanwhile, GAMMA Investing LLC raised its position by 23.2%, acquiring an additional 117 shares to reach a total of 622 shares worth $63,000.
Other notable increases include Vista Finance LLC, which raised its stake by 4.0% to own 3,245 shares, and AXA S.A., which increased its holdings by 2.0% to own 6,702 shares valued at $681,000. Overall, institutional investors and hedge funds control approximately 77.73% of Descartes’ stock.
Founded in 1981 and headquartered in Waterloo, Ontario, the Descartes Systems Group specializes in cloud-based logistics and supply chain management solutions. Its software-as-a-service platform connects various aspects of global supply chains, aiding in transportation, customs clearance, routing, scheduling, and fleet management. Descartes’ modular applications provide real-time visibility and compliance for shippers, carriers, third-party logistics providers, and regulatory authorities.
As analysts continue to evaluate Descartes’ performance and market position, the company remains a notable player in the logistics technology sector.
