Head-To-Head Analysis: The Descartes Systems Group (DSGX) versus QAD (NASDAQ:QADB)
QAD (NASDAQ: QADB) and The Descartes Systems Group (NASDAQ:DSGX) are both small-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitabiliy, risk, institutional ownership, earnings, dividends and analyst recommendations.
QAD pays an annual dividend of $0.24 per share and has a dividend yield of 0.9%. The Descartes Systems Group does not pay a dividend. QAD pays out -28.2% of its earnings in the form of a dividend.
Earnings and Valuation
This table compares QAD and The Descartes Systems Group’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|QAD||$283.96 million||1.75||$10.09 million||($0.85)||-30.75|
|The Descartes Systems Group||$209.38 million||8.74||$70.06 million||$0.33||73.03|
The Descartes Systems Group has higher revenue, but lower earnings than QAD. QAD is trading at a lower price-to-earnings ratio than The Descartes Systems Group, indicating that it is currently the more affordable of the two stocks.
This table compares QAD and The Descartes Systems Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|The Descartes Systems Group||11.80%||5.78%||4.99%|
Institutional & Insider Ownership
1.9% of QAD shares are owned by institutional investors. Comparatively, 79.2% of The Descartes Systems Group shares are owned by institutional investors. 67.4% of QAD shares are owned by company insiders. Comparatively, 0.3% of The Descartes Systems Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
This is a summary of current ratings and target prices for QAD and The Descartes Systems Group, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|The Descartes Systems Group||0||2||7||0||2.78|
QAD presently has a consensus target price of $33.00, suggesting a potential upside of 26.24%. The Descartes Systems Group has a consensus target price of $33.00, suggesting a potential upside of 36.93%. Given The Descartes Systems Group’s higher probable upside, analysts clearly believe The Descartes Systems Group is more favorable than QAD.
Volatility and Risk
QAD has a beta of 0.91, suggesting that its share price is 9% less volatile than the S&P 500. Comparatively, The Descartes Systems Group has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500.
The Descartes Systems Group beats QAD on 9 of the 16 factors compared between the two stocks.
QAD Inc. (QAD) is a provider of vertically oriented enterprise software solutions for global manufacturing companies across the automotive, life sciences, consumer products, food and beverage, high technology and industrial products industries. QAD Enterprise Applications enables measurement and control of business processes and supports operational requirements, including financials, manufacturing, demand and supply chain planning, customer management, business intelligence and business process management. QAD delivers components of its solution for a range of mobile platforms. The Company’s mobile suite includes a requisition approval solution, a mobile business intelligence solution, mobile browse capability and mobile application monitoring tools to support system administrators. Its mobile browse capability allows users to view, filter and sort data accessible through QAD Browses within QAD Enterprise Applications using mobile devices.
About The Descartes Systems Group
Descartes Systems Group Inc (Descartes) is a Canada-based global provider of federated network and global logistics technology solutions that help its customers make and receive shipments and manage related resources. The Company’s network-based solutions, which primarily consist of services and software, connect people to their trading partners and enable business document exchange (bookings, bills of lading, status messages); regulatory compliance and customs filing; route and resource planning, execution and monitoring; access and leverage global trade and restricted party data; inventory and asset visibility; rate and transportation management, and warehouse operations. The Company’s solutions include Logistics Technology Platform that fuses the Descartes Global Logistics Network (Descartes GLN); customs and regulatory compliance; routing, mobile and telematics; global logistics network services; transportation management, and broker and forwarder enterprise systems.
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