Analysts at CIBC Capital Markets and Raymond James adjusted their price targets on Descartes Systems Group Inc. (DSG.TO, DSGX).
CIBC Analyst Stephanie Price raised her price target on the Canadian multinational software company to US$118 from US$116, and maintained an Outperformer rating following its Q1 results.
"The freight environment remains volatile, with Descartes noting lower shipment volumes in the quarter," Price said in a note to clients.
"Descartes continues to roll out AI agents to help clients monitor and respond to logistics disruptions and is leveraging AI internally to improve efficiency," the analyst said.
"The company remains well capitalized, with $377 Million in net cash to spend on M&A and/or its NCIB," Price said.
Raymond James analyst Steven Li lowered his price target to US$108 from US$118, and maintained an Outperform rating.
"Fundamental set-up looks strong with improving organic growth into easier comps," Li said in a note to clients.
"M&A set-up sounded good, too, and we believe combined with the improving organic growth, could push A-EBITDA into a period of heightened growth (high-teens, this 1Q already A-EBITDA was +20% y/y)," the analyst said.
"This level of EBITDA growth has compounding implications as over the last 10 years; DSGX has converted on average 84% of its A-EBITDA into FCF like clockwork."