DSGX Stock Is Cruising Ahead in the Logistics Field

DSGX stock price
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Descartes Stock Continues Climbing Higher

The world is changing fast with technological advancements, and the enterprises that prepare for these changes will be the ones that are likely to survive and thrive. Companies that help these enterprises achieve their desired digital transformations have the potential to turn out superlative gains for their investors.

Descartes Systems Group Inc (NASDAQ:DSGX) is a Canadian multinational technology company that provides on-demand software-as-a-service (SaaS). It focuses on improving the productivity and performance of logistics-intensive businesses. It is a global leader with expertise in logistics software, supply chain management software, and cloud-based services.

Descartes provides solutions such as logistics technology platforms, transportation management, global logistics network services, and customs compliance services.

Customers use its modular SaaS to plan, route, schedule, track, and measure deliveries. Descartes helps companies access global trade data and file customs and security documents for imports and exports. The success of its business performance has been reflected in the rising DSGX stock price.

It is vital for logistics-intensive organizations to reduce their operating costs, improve margins, and better serve their customers. Descartes helps them achieve these goals and, therefore, Descartes stock has gained from strong demand for its services.

As the market continues to transform, Descartes has been evolving to meet its customers’ needs. Although the rate of adoption of newer logistics and supply chain management technologies has been increasing, a large number of organizations still use manual business processes.

The supply chain management software market is already huge and is growing. According to Gartner Inc (NYSE:IT), the market is likely to touch $19.0 billion by 2021. (Source: “Supply Chain Management software market expected to exceed $13 billion in 2017,” Supply Chain Quarterly, July 7, 2017.)

Descartes is well positioned to capitalize on the emerging opportunities. It is one of the largest multi-modal and neutral logistics networks. It enjoys a strong market position with competitive barriers. It has industry-leading customers including Delta Air Lines, Inc. (NYSE:DAL), British Airways Plc., Home Depot Inc (NYSE:HD), and Crate and Barrel.

With the increase in automation, global security and compliance, and omnichannel retail, the future looks bright for DSGX stock.

Descartes has been acquiring other companies in order to grow and stay ahead in its field. Last month, the company acquired Aljex Software Inc., which is a cloud-based provider of back-office transportation management solutions for freight brokers and transportation providers.

And last year, it acquired MacroPoint, LLC, an electronic transportation network that provides location-based truck tracking and predictive truck capacity data content. This U.S.-based company runs a connected network of over two million trucking assets and drivers.

Descartes reported its fiscal-year 2018 and fourth-quarter financial results early this month. For the full year, the company reported revenues of $237.4 million, up 16% from $203.8 million a year ago. Net income went up by 13%. For the quarter, revenues increased by 20% to touch $63.6 million. Net income went up by 10%.

The growing business has been pushing Descartes stock higher. The DSGX stock price has gone up by over 200% over the past five years. The following chart shows this impressive rise.

dsgx stock chart

Chart courtesy of StockCharts.com

The company has been consistently increasing its revenue and has a diversified revenue base with more than 18,500 customers in over 160 countries. Looking at the way Descartes has been growing in recent years, DSGX stock appears to have more triple-digit upside ahead.

Analyst Take

Descartes Systems Group Inc. uses data and technology to simplify complex business processes and has expertise in logistics and supply chain management business processes. With its solutions, it is able to improve the productivity and performance of logistics-intensive businesses.

Being a pure-play logistics technology provider that has a compelling combination of network, applications, and data content has made Descartes a strong performer. Investors should not miss the opportunity to look further into Descartes stock.