The Descartes Systems Group (TSX:DSG) GF Value Rank : 5 (As of Apr. 26, 2024)

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What is The Descartes Systems Group GF Value Rank?

The Descartes Systems Group has the GF Value Rank of 5.

The GF Value Rank is determined by the price-to-GF-Value (P/GF Value) ratio, a proprietary metric calculated based on historical multiples along with an adjustment factor based on a company's past returns and growth and future estimates of the business' performance.

GuruFocus found that for valuation, we cannot simply give stocks a better GF Value rank simply because they have a lower P/GF Value ratio. Backtesting shows that over the long term, the two worst-performing groups are the most expensive group (with the highest P/GF Value ratio) and the least expensive group (with the lowest P/GF Value ratio).

We can understand why the most expensive group underperforms. We were initially puzzled by the underperformance of the least expensive group, but we realized there is a reason why some stocks are super cheap. If they look too undervalued, it is often because the businesses behind them are poor quality. The market realized this and gave them low valuations. In a way, the market is efficient.

After multiple backtesting analyses, we granted the stocks in third-cheapest percentile the highest GF Value rank, as they have performed the best over a full market cycle. Stock performance is actually not as sensitive to valuation as it is to growth and profitability. On average, the companies in the 20%-50% valuation groups have similar performances. Therefore, we should avoid the most expensive and the least expensive stocks. We can be more tolerant of valuation.

Please click GF Score to see more details on the GF Score's 5 Key Aspects of Analysis.

Competitive Comparison of The Descartes Systems Group's GF Value Rank

For the Software - Application subindustry, The Descartes Systems Group's GF Value Rank, along with its competitors' market caps and GF Value Rank data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

The Descartes Systems Group's GF Value Rank Distribution in the Software Industry

For the Software industry and Technology sector, The Descartes Systems Group's GF Value Rank distribution charts can be found below:

* The bar in red indicates where The Descartes Systems Group's GF Value Rank falls into.

The Descartes Systems Group GF Value Rank Related Terms

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The Descartes Systems Group (TSX:DSG) Business Description

Industry

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Comparable Companies

Traded in Other Exchanges

DSGX:USA DC2:Germany

Address

120 Randall Drive, Waterloo, ON, CAN, N2V 1C6

Website

https://www.descartes.com

The Descartes Systems Group provides a software solution that allows users in the shipping industry to communicate with one another. The core product is the Global Logistics Network, which is best understood as transaction driven. Descartes charges clients to send/receive messages, data, and documents on the GLN (the transactions). Customers typically contract for a monthly minimum over a multiyear period. The GLN platform allows for Descartes to upsell additional software modules as well, typically provided via a software-as-a-service model.