Financial Comparison: The Descartes Systems Group (DSGX) & HubSpot (HUBS)

The Descartes Systems Group (NASDAQ: DSGX) and HubSpot (NYSE:HUBS) are both mid-cap computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, risk, dividends and analyst recommendations.

Profitability

This table compares The Descartes Systems Group and HubSpot’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Descartes Systems Group 12.06% 5.97% 5.04%
HubSpot -13.17% -27.99% -10.98%

Insider & Institutional Ownership

78.3% of The Descartes Systems Group shares are owned by institutional investors. Comparatively, 96.1% of HubSpot shares are owned by institutional investors. 0.3% of The Descartes Systems Group shares are owned by company insiders. Comparatively, 12.1% of HubSpot shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares The Descartes Systems Group and HubSpot’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
The Descartes Systems Group $216.16 million 10.17 $72.59 million $0.34 84.27
HubSpot $318.38 million 9.94 -$34.68 million ($1.17) -73.08

The Descartes Systems Group has higher revenue, but lower earnings than HubSpot. HubSpot 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.

Analyst Recommendations

This is a summary of current recommendations for The Descartes Systems Group and HubSpot, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Descartes Systems Group 0 2 7 0 2.78
HubSpot 0 2 18 0 2.90

The Descartes Systems Group presently has a consensus price target of $32.31, indicating a potential upside of 12.78%. HubSpot has a consensus price target of $78.41, indicating a potential downside of 8.29%. Given The Descartes Systems Group’s higher probable upside, equities research analysts clearly believe The Descartes Systems Group is more favorable than HubSpot.

Risk and Volatility

The Descartes Systems Group has a beta of 0.55, indicating that its share price is 45% less volatile than the S&P 500. Comparatively, HubSpot has a beta of 2.42, indicating that its share price is 142% more volatile than the S&P 500.

Summary

The Descartes Systems Group beats HubSpot on 7 of the 13 factors compared between the two stocks.

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. Its 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. Its 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. It operates through MacroPoint.

About HubSpot

HubSpot, Inc. (HubSpot) provides a cloud-based marketing and sales software platform. The Company’s software platform features integrated applications to help businesses attract visitors to their Websites, convert visitors into leads, close leads into customers and delight customers so that they become promoters of those businesses. These integrated applications include social media, search engine optimization, blogging, Website content management, marketing automation, e-mail, sales productivity, customer relationship management (CRM), analytics and reporting. The Company’s products include HubSpot Marketing, HubSpot CRM and HubSpot Sales. The Company offers Professional Services and support. It offers professional services to educate and train customers on how to leverage its software platform and inbound marketing methodology to transform how their business attracts, engages and delights customers.

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