Descartes Systems Group Inc. DSGX recently announced that Cathay Cargo, a global air freight service provider, has utilized Descartes’ cutting-edge Bluetooth Low Energy air cargo tracking solution to securely transport two giant pandas from Chengdu, China, to Hong Kong. Cathay Cargo has been leveraging Descartes’ tracking solution since 2021 as part of its Ultra Track cargo tracking service. This collaboration allows Cathay Cargo to offer its customers real-time location and condition data for sensitive and high-value shipments such as electronics, pharmaceuticals, perishables and even endangered species like giant pandas.
Descartes’ air cargo tracking solution is instrumental in allowing Cathay Cargo to monitor not only the location of shipments but also key condition parameters such as temperature, light exposure, vibration and humidity, all critical for ensuring the safe delivery of sensitive goods. Ultra Track is now available in 29 airports across Cathay Cargo’s global network, enabling the company to maintain a high level of transparency and reliability in its logistics operations.
A key aspect of the Descartes air cargo tracking solution is its ability to provide comprehensive shipment visibility. This is made possible through the Descartes Global Logistics Network service. The Bluetooth Low Energy tags, which are attached to Unit Load Devices or pallets, communicate location and condition data to its readers stationed across Descartes' IoT network. The initiative allows air cargo providers to monitor shipments both in the air and on the ground. The platform tracks a wide range of environmental conditions, safeguarding the cargo’s integrity during transit.
For airlines and ground handling agents, solutions like Descartes’ air cargo tracking system are crucial. By offering a comprehensive IoT platform that tracks location and shipment conditions, Descartes is aiding logistics providers in meeting the growing demands of today’s global supply chains. With DSGX’s Bluetooth Low Energy air cargo tracking solution, Cathay Cargo could offer real-time visibility into the location and condition of this top-priority shipment, ensuring the pandas arrived safely at their destination.
DSGX’s Advanced Solutions & Buyouts Fuel Growth
Momentum in real-time visibility, global trade intelligence, routing and scheduling solutions and e-commerce business is driving DSGX’s performance. In the last reported quarter, DSGX revenues soared 14% year over year to $163.4 million, beating the Zacks Consensus Estimate by 2.8%. The organic revenue growth of 9% from new and existing customers during the quarter propelled top-line expansion.
The Descartes Systems Group Inc. Price and Consensus
The Descartes Systems Group Inc. Price and Consensus
The Descartes Systems Group Inc. price-consensus-chart | The Descartes Systems Group Inc. Quote
On Oct. 1, 2024, DSGX’s route planning and execution solution was adopted by Mississippi-based Mitchell Companies to bolster distribution efficiency and maintain high delivery productivity. Also, Brazil-based Solar Coca-Cola has adopted its route execution and fleet performance management solution to enhance the last-mile delivery performance for more than 1,400 drivers across 44 distribution centers and 13 production facilities, covering 70% of Brazil. The company’s premium cloud-based transportation management system solution was used by Nynas AB to automate communications across the customer order lifecycle.
In addition to strong organic growth, DSGX remains focused on acquisitions to drive the top line. Synergies stemming from the acquisition of BoxTop Technologies during the quarter, along with OCR and Thyme ASD buyouts settled in the first quarter with GroundCloud and Localz acquisition in 2024, drove the top-line performance.
Apart from these deals, DSGX recently acquired Sellercloud for about $110 million in cash to expand its e-commerce suite with advanced inventory and order management capabilities. In September 2024, it acquired Assure Assist, Inc. (operating as MyCarrierPortal), known for its carrier onboarding and risk monitoring solutions for the trucking industry. Descartes’ acquisition of MCP involves an up-front consideration of $24 million in cash, with the potential for an additional $6 million in performance-based consideration. The initiative is aimed at enhancing DSGX’s capabilities in fraud prevention and compliance within the trucking industry.
However, uncertainty prevailing over global macroeconomic conditions, geopolitical turmoil and volatile supply-chain issues continue to weigh on DSGX’s performance.
DSGX’S Zacks Rank & Stock Price Performance
At present, DSGX has a Zacks Rank #5 (Strong Sell). Its shares have gained 44.1% compared with the sub-industry’s growth of 27.4% in the past year.
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Stocks to Consider
Some better-ranked stocks from the broader technology space are Workday Inc. WDAY, Cirrus Logic, Inc. CRUS, and SS&C Technologies Holdings, Inc. SSNC. WDAY presently sports a Zacks Rank #1 (Strong Buy), whereas SSNC & CRUS carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
WDAY is a leading provider of enterprise-level software solutions for financial management and human resource domains. The company’s cloud-based platform combines finance and HR in a single system, making it easier for organizations to provide analytical insights and decision support. In the last reported quarter, it delivered an earnings surprise of 7.36%.
SS&C Technologies Holdings delivered an earnings surprise of 3.1%, on average, in the trailing four quarters. In the last reported quarter, SSNC pulled off an earnings surprise of 4.9%. The Zacks Consensus Estimate for its earnings is pegged at $5.18.
Cirrus Logic’s performance is driven by increasing shipments in the smartphone market. Steady momentum in the laptop market and standout next-generation flagship smartphone design cushion the top line. CRUS delivered an earnings surprise of 56.6%, on average, in the trailing four quarters.
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