The Descartes Systems Group Inc. (DSGX): A Bull Case Theory 

We came across a bullish thesis on The Descartes Systems Group Inc. on Don Wharton Victoria, BC’s Substack by Don Wharton. In this article, we will summarize the bulls’ thesis on DSGX. The Descartes Systems Group Inc.’s share was trading at $75.58 as of January 29th. DSGX’s trailing and forward P/E were 44.82 and 26.11 respectively according to Yahoo Finance.

The Descartes Systems Group Inc. provides global logistics technology solutions worldwide. DSGX appears to be entering a potential recovery phase after a year marked by volatility, operational concerns, and a sharp decline in its share price. Following a 12% drop after fiscal Q1 results due to tariff-related headwinds and a challenging macro backdrop, the stock continued sliding, losing another 20% over six months and bottoming at $110.55 in mid-November.

The narrative shifted last week when the company reported strong fiscal Q3 2026 results, prompting a 14% rebound as investors reacted to clear signs of momentum returning to the business. Services revenue grew 11% year over year while adjusted EBITDA rose 19%, but the most important signal was organic growth accelerating to 7% from 4% in each of the past two quarters, suggesting underlying demand is strengthening.

Management attributed the performance to heightened customer reliance on its solutions, driven by growing complexity in global trade flows. Demand increased for tariff and sanctions data, foreign trade zone capabilities that help importers navigate uncertainty, high-velocity e-commerce customs clearance tools, and real-time shipment visibility—areas where Descartes’ platform remains mission-critical.

Analysts responded favorably, highlighting resilience amid supply-chain unpredictability and noting a supportive environment for M&A as smaller competitors face financing pressures. Despite the recent bounce, the stock still trades at the lower end of its historical EV/EBITDA range, implying that the market has not fully priced in improving fundamentals. While it remains uncertain whether this quarter marks the beginning of a sustained turnaround, the combination of accelerating organic growth, strengthened demand drivers, and a still-discounted valuation positions Descartes as an attractive potential recovery story with improving risk-reward dynamics.

Previously we covered a bullish thesis on Microsoft Corporation (MSFT) by Long-term Investing in February 2025, which highlighted the company’s strong cloud and AI momentum. The company’s stock price has appreciated approximately by 5.79% since our coverage. This is because the thesis played out. The thesis still stands as AI-driven demand continues to support long-term growth. Don Wharton shares a similar view but emphasizes operational resilience at Descartes Systems Group.

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Disclosure: None.