DSGX stock wins target raise at RBC

Following the company’s most recent results, RBC analyst Paul Treiber has raised his price target on Descartes Systems Group (Descartes Systems Group Stock Quote, Chart, News, Analysts, Financials NASDAQ:DSGX)

On March 6, DSG reported its Q4 and fiscal 2024 results. In the fourth quarter, the company posted Adjusted EBITDA of $247.5-million on revenue of $572.9-million, a topline that was up 18 per cent over the same period a year prior.

“Global trade continues to be impacted by military conflicts, disruptions to major shipping routes and a growing list of sanctions from various governments around the world,” said Edward J. Ryan, Descartes’s chief executive officer. “Our global logistics network is designed to help shippers, carriers and logistics services providers adapt their supply chains to efficiently manage the life cycle of shipments in this increasingly dynamic landscape. As a result, our customers are trusting us with more of their business, which puts us in a strong financial position to continue to invest in our business.”

As reported by The Globe and Mail, Treiber March 7 maintained his “Outperform” rating and raised his price target on DSGX from (US) $100 to $110. The analyst says DSGX is setting itself up for another impressive year.

“Management expects a strong pace of M&A in 2024, given the favourable environment, with a large number of companies available for sale,” the analyst wrote. “Net cash reached an all-time high of $314-million Q4 and we forecast Descartes to generate $229-million FCF over the next 12 months. Management sees M&A as the sole use of cash in the foreseeable future. We estimate every $200-million deployed on acquisitions is 8-per-cent accretive to EPS.”