Latest Ratios: P/E Ratio 41.9x · EV/EBITDA 19.8x · ROE 11.2%. (1997–2026 historical series)
Price-based multiples — how expensive the stock is relative to earnings, sales, book value, and cash flow
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Market Cap | $6.9B | $6.5B | $10.1B | $7.6B | $6.3B | $6.3B | $5.2B | $3.7B | $2.4B | $2.2B | $1.7B |
| Enterprise Value | $6.5B | $6.2B | $9.9B | $7.3B | $6.0B | $6.1B | $5.1B | $3.7B | $2.4B | $2.2B | $1.6B |
| P/E Ratio → | 41.93 | 39.14 | 70.63 | 65.37 | 61.88 | 72.77 | 100.10 | 99.58 | 77.65 | 81.00 | 70.48 |
| P/S Ratio | 9.24 | 8.79 | 15.54 | 13.27 | 12.99 | 14.77 | 15.02 | 11.40 | 8.78 | 9.21 | 8.20 |
| P/B Ratio | 4.36 | 4.07 | 7.30 | 6.14 | 5.74 | 6.27 | 5.75 | 4.52 | 4.53 | 4.38 | 3.88 |
| P/FCF | 25.85 | 24.60 | 47.59 | 37.48 | 33.88 | 36.62 | 41.08 | 37.37 | 33.18 | 32.60 | 24.71 |
| P/OCF | 25.29 | 24.07 | 46.13 | 36.48 | 32.81 | 35.61 | 39.90 | 35.62 | 30.95 | 30.30 | 23.03 |
P/E links to full P/E history page with 30-year chart
Enterprise-value multiples — capital-structure-neutral measures of total business value
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| EV / Revenue | — | 8.32 | 15.19 | 12.72 | 12.44 | 14.29 | 14.67 | 11.30 | 8.77 | 9.21 | 8.02 |
| EV / EBITDA | 19.83 | 18.81 | 38.60 | 34.91 | 31.04 | 36.41 | 37.61 | 32.33 | 28.02 | 29.78 | 25.40 |
| EV / EBIT | 27.16 | 25.78 | 52.42 | 47.80 | 45.59 | 59.38 | 71.49 | 70.07 | 57.98 | 60.70 | 50.88 |
| EV / FCF | — | 23.30 | 46.52 | 35.93 | 32.44 | 35.44 | 40.13 | 37.06 | 33.15 | 32.63 | 24.14 |
Margins and return-on-capital ratios measuring operating efficiency
Full margin charts and quarterly trend are on the Earnings History page
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross Margin | 65.9% | 65.9% | 75.6% | 75.9% | 76.7% | 76.0% | 74.2% | 73.7% | 72.7% | 73.2% | 72.5% |
| Operating Margin | 32.3% | 32.3% | 27.8% | 24.9% | 26.8% | 24.4% | 20.5% | 16.0% | 15.1% | 15.1% | 15.1% |
| Net Profit Margin | 22.5% | 22.5% | 22.0% | 20.2% | 21.0% | 20.3% | 14.9% | 11.4% | 11.4% | 11.3% | 11.7% |
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| ROE | 11.2% | 11.2% | 10.9% | 9.9% | 9.7% | 9.0% | 6.0% | 5.5% | 6.1% | 5.8% | 5.7% |
| ROA | 9.5% | 9.5% | 9.2% | 8.3% | 8.2% | 7.7% | 5.2% | 4.6% | 4.9% | 4.8% | 5.0% |
| ROIC | 14.9% | 14.9% | 13.1% | 12.2% | 12.0% | 9.8% | 6.8% | 5.9% | 6.0% | 6.0% | 6.1% |
| ROCE | 15.6% | 15.6% | 13.4% | 11.8% | 11.9% | 10.3% | 7.9% | 7.3% | 7.3% | 7.1% | 7.1% |
Solvency and debt-coverage ratios — lower is generally safer
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt / Equity | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 | 0.02 | 0.05 | 0.07 | — |
| Debt / EBITDA | 0.03 | 0.03 | 0.03 | 0.03 | 0.04 | 0.07 | 0.10 | 0.12 | 0.30 | 0.50 | — |
| Net Debt / Equity | — | -0.22 | -0.16 | -0.25 | -0.24 | -0.20 | -0.13 | -0.04 | -0.00 | 0.00 | -0.09 |
| Net Debt / EBITDA | -1.05 | -1.05 | -0.89 | -1.50 | -1.38 | -1.21 | -0.89 | -0.27 | -0.02 | 0.03 | -0.59 |
| Debt / FCF | — | -1.30 | -1.07 | -1.55 | -1.44 | -1.18 | -0.95 | -0.31 | -0.03 | 0.03 | -0.56 |
| Interest Coverage | 243.44 | 243.44 | 187.84 | 111.90 | 113.59 | 91.04 | 60.33 | 11.90 | 19.57 | 27.79 | 52.55 |
Net cash position: cash ($354M) exceeds total debt ($8M)
Short-term solvency ratios and asset-utilisation metrics
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Current Ratio | 2.16 | 2.16 | 1.62 | 2.05 | 2.11 | 2.19 | 1.95 | 1.13 | 1.03 | 1.11 | 1.35 |
| Quick Ratio | 2.16 | 2.16 | 1.62 | 2.05 | 2.11 | 2.18 | 1.94 | 1.12 | 1.03 | 1.10 | 1.35 |
| Cash Ratio | 1.60 | 1.60 | 1.09 | 1.58 | 1.63 | 1.60 | 1.28 | 0.50 | 0.39 | 0.52 | 0.71 |
| Asset Turnover | — | 0.40 | 0.40 | 0.39 | 0.37 | 0.36 | 0.33 | 0.35 | 0.42 | 0.38 | 0.41 |
| Inventory Turnover | 2527.50 | 2527.50 | 222.57 | — | 149.31 | 117.29 | 209.58 | 208.57 | 789.41 | 517.92 | 335.63 |
| Days Sales Outstanding | — | 44.42 | 39.74 | 40.62 | 33.93 | 35.84 | 54.47 | 47.52 | 47.52 | 49.13 | 52.14 |
Earnings, FCF, buyback, and dividend yields — total returns to shareholders
Full dividend history and growth charts are on the Dividend History page
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Dividend Yield | — | — | — | — | — | — | — | — | — | — | — |
| Payout Ratio | — | — | — | — | — | — | — | — | — | — | — |
| Metric | TTM | FY 2026 | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings Yield | 2.4% | 2.6% | 1.4% | 1.5% | 1.6% | 1.4% | 1.0% | 1.0% | 1.3% | 1.2% | 1.4% |
| FCF Yield | 3.9% | 4.1% | 2.1% | 2.7% | 3.0% | 2.7% | 2.4% | 2.7% | 3.0% | 3.1% | 4.0% |
| Buyback Yield | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| Total Shareholder Yield | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| Shares Outstanding | — | $88M | $87M | $87M | $86M | $86M | $86M | $83M | $78M | $77M | $77M |
Includes 30+ ratios · 30 years · Updated daily
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10-year return with dividends reinvested.
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Quick answers to the most common questions about buying DSGX stock.
The Descartes Systems Group Inc.'s current P/E ratio is 41.9x. The historical average is 58.3x. This places it at the 29th percentile of its historical range.
The Descartes Systems Group Inc.'s current EV/EBITDA is 19.8x. This enterprise value multiple compares the company's total value (equity + debt - cash) to its EBITDA. The historical average is 23.1x.
The Descartes Systems Group Inc.'s return on equity (ROE) is 11.2%. The historical average is -5.2%.
Based on historical data, The Descartes Systems Group Inc. is trading at a P/E of 41.9x. This is at the 29th percentile of its historical P/E range. Compare with industry peers and growth rates for a complete picture.
The Descartes Systems Group Inc. has 65.9% gross margin and 32.3% operating margin. Operating margin above 20% indicates strong pricing power and cost efficiency.
The Descartes Systems Group Inc.'s Debt/EBITDA ratio is 0.0x, indicating low leverage. A ratio below 2x is generally considered financially healthy.
Key Metrics
Top Statement Risk
Growth deceleration and goodwill concentration
Premium Pricing Reflects Defensive Moat
At a forward EV/EBITDA of 20.57 and a PEG of 1.55, DSGX commands a premium to many application software peers, suggesting the market prices in its regulatory compliance moat more than its decelerating growth rate.
The P/E of 39.81 is elevated relative to peers like Progress Software (24.05) but aligns with the defensive, high-margin profile of a toll-booth business. However, the forward P/E of 40.77 indicates no anticipated earnings multiple compression, implying growth must re-accelerate to justify the current valuation. The EV/EBITDA of 18.77 appears high relative to a business with 14.4% revenue growth, suggesting investors are paying for the network effect and recurring revenue stickiness, not just current earnings.
Sustainable Margin Power Amid Volatility
Operating margin expanded to 33.2% in Q2 2027 from 26.8% a year prior, driven by a gross margin that stabilized at ~69% after a volatile peak of 76.9% in mid-2026, indicating the high-fixed-cost model is delivering powerful operating leverage.
The current 68.9% gross margin, while below its 2026 peak, represents a new, higher plateau compared to the 65.7% level of early 2025, suggesting successful product mix shifts or pricing power. The 24.9% net margin is exceptionally strong for the software sector and underscores the quality of earnings, as it is driven by core operations rather than financial engineering. Investors should monitor whether the recent gross margin moderation represents a new steady state or the beginning of a trend back toward historical averages.
Improving Capital Efficiency Drives ROIC
ROIC has steadily climbed to 4.0% in Q2 2027 from a low of 2.8% in Q2 2026, indicating that the company is generating more profit per dollar of invested capital, primarily through margin expansion rather than asset turnover improvements.
The ROIC expansion is directly correlated with the jump in operating margin, confirming that the primary driver is increased profitability, not a more efficient use of assets. However, the ROIC level remains low in absolute terms, which is a function of the asset-heavy balance sheet dominated by goodwill and intangibles from acquisitions. This suggests the company's value creation story is less about traditional capital efficiency metrics and more about building a dominant, high-margin network.
Minimal Leverage Maximizes Strategic Optionality
With a Debt/Equity ratio of essentially zero and an interest coverage ratio of 278x, the company maintains a fortress balance sheet, eliminating refinancing risk and providing significant capacity for M&A without financial strain.
The negligible debt load and $354 million cash position create a self-funding model for acquisitions, insulating the company from rising interest rates. This financial strength is a core component of the 'string of pearls' strategy, allowing management to be opportunistic without shareholder dilution or balance sheet risk. The lack of leverage is a structural advantage that reduces the overall risk profile, especially important for a serial acquirer.
Robust Liquidity With No Inventory Risk
A current and quick ratio of 2.02, coupled with zero inventory days, reflect an exceptionally strong and liquid position that can easily withstand operational volatility or fund strategic initiatives without external financing.
The identical current and quick ratios confirm there is no meaningful inventory holding, which is characteristic of a pure software/services model and eliminates a key source of liquidity risk. This clean working capital profile, where days sales outstanding is 41 and days payable outstanding is 26, suggests efficient cash collection relative to payment cycles. The liquidity position is more than adequate to cover short-term obligations, providing a deep buffer for any macroeconomic stress.
Misapplied Price-to-Sales Multiple
The P/S ratio of 8.77 is frequently cited for DSGX but obscures the true earnings power of the business, as it fails to account for the 32.3% operating margin and ignores the significant cash flow generation of its asset-light model.
Investors often use the P/S multiple to compare Descartes to high-growth, unprofitable SaaS peers, but this is a misapplication. Descartes' high gross and operating margins mean that a large portion of each sales dollar falls to the bottom line, making P/E or EV/EBITDA more appropriate. The P/S ratio understates the company's profitability and cash conversion, potentially leading to an incorrect assessment of its valuation relative to less profitable software firms with similar revenue multiples.