Descartes Systems Group gets price target raise at Cantor Fitzgerald

A “strong” quarter has Cantor Fitzgerald Canada analyst Justin Kew feeling a little more bullish about Waterloo’s Descartes Systems Group (TSX:DSG, Nasdaq:DSGX).

Yesterday, Descartes reported its Q3, 2015 results. The company earned (U.S.) $4.15-million on revenue of $43.1-million, up 11% from the $38.8-million topline the company posted in last year’s third quarter.

“We’re pleased that we’ve once again delivered another record quarter of operating performance and continued strong cash generation, despite foreign exchange pressures on our non-U.S. revenues,” said CEO Ed Ryan. “Our focus on growing our global logistics network through disciplined operations and complementary acquisitions continues to deliver consistent, predictable financial results. With continued strong demand for our logistics solutions complemented by the contribution of our recently completed acquisitions, we remain optimistic for our upcoming fiscal periods.”

Kew says the quarter was in line with his revenue expectations, but slightly exceeded his EBITDA target.

“We remain impressed with the consistency of the business model and management’s ability to scale this business,” said the analyst.

In a research update to clients this morning, Kew maintained his “Buy” rating but raised his one-year target on Descartes from (U.S.) $15.00 to $17.00. The analyst explains that the bump comes from rolling his valuation base year forward.