Expect another record quarter from Descartes Systems, says Cantor Fitzgerald

Cantor Fitzgerald analyst Tom Liston says across all metrics he expects another record quarter from Waterloo’s Descartes Systems Group (Descartes Systems Group Stock Quote, Chart, News: TSX:DSG).

On Thursday, before market open, Descartes will report its Q1, 2014 financial results. The company is following a Q4 in which it posted a topline of $33.8-million, which was up 14% from the same period a year prior.

Liston says the combination of Descartes’ highly stable business, along with recent acquisitions like the pickup of KSD Software, plus large license deals, all point to another record quarter for revenue, EBITDA, and trailing twelve-months EBITDA. In a research update to clients this morning Liston maintained his BUY recommendation and (U.S.) $12 one-year target on Descartes (the company is also listed on the NASDAQ under the symbol DSGX).

Liston says he expects Descartes will earn $10.2-million on revenue of $33.2 million, which puts his topline number slightly below consensus, and his bottom line slightly above it. His expected topline number would be an 18% year-over-year improvement, he notes.

The Cantor Fitzgerald analyst, who rates Descartes as a TOP PICK, says the company is tacking on seemingly effortless double-digit growth because it is a highly strategic vendor, and is experiencing a network effect as its logistics solutions are fast becoming indispensable to some of the world’s best companies.

Shares of Descartes Systems Group on the TSX closed today up .5% to $10.95.