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Supply Chain Risk

Critical Review: CommVault Systems (NASDAQ:CVLT) versus Descartes Systems Group (NASDAQ:DSGX)

Descartes Systems Group (NASDAQ:DSGX) and CommVault Systems (NASDAQ:CVLT) 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 analyst recommendations, valuation, institutional ownership, dividends, profitability, earnings and risk.

Risk & Volatility

Descartes Systems Group has a beta of 0.68, suggesting that its share price is 32% less volatile than the S&P 500. Comparatively, CommVault Systems has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500.

Insider & Institutional Ownership

84.5% of Descartes Systems Group shares are owned by institutional investors. Comparatively, 85.3% of CommVault Systems shares are owned by institutional investors. 0.3% of Descartes Systems Group shares are owned by insiders. Comparatively, 12.0% of CommVault Systems shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Descartes Systems Group 10.58% 5.28% 4.01%
CommVault Systems -0.39% 7.18% 3.37%

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Descartes Systems Group $275.17 million 12.91 $31.28 million $0.40 105.58
CommVault Systems $710.96 million 3.21 $3.56 million $0.60 83.20

Descartes Systems Group has higher earnings, but lower revenue than CommVault Systems. CommVault Systems is trading at a lower price-to-earnings ratio than Descartes Systems Group, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Descartes Systems Group and CommVault Systems, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Descartes Systems Group 0 4 6 0 2.60
CommVault Systems 0 3 2 0 2.40

Descartes Systems Group currently has a consensus target price of $43.22, indicating a potential upside of 2.35%. CommVault Systems has a consensus target price of $60.40, indicating a potential upside of 20.99%. Given CommVault Systems’ higher possible upside, analysts plainly believe CommVault Systems is more favorable than Descartes Systems Group.

About Descartes Systems Group

The Descartes Systems Group Inc. provides federated network and logistics technology solutions worldwide. Its Logistics Application Suite offers a range of modular, cloud-based, and interoperable Web and wireless logistics management applications. The company’s Logistics Application Suite offers solutions, such as route planning and execution, mobile applications, and telematics and compliance; transportation management solutions comprising carrier compliance and rate management, freight audit and settlement, dock scheduling and yard management, pool distribution, transportation planning and execution, and logistics flow control, as well as visibility, tracking, and performance management; and global logistics network services, such as document management, community, and connectivity services. Its Logistics Application Suite solutions also include customs and regulatory compliance solutions, such as cargo security compliance, declaration and fiscal compliance, customs warehouse management, ocean regulatory services, industry program support services, global trade content, and government solutions; and broker and forwarder enterprise system solutions, such as forwarder back office, and brokerage and declaration services. In addition, the company offers consulting, implementation, and training services; and maintenance and support services. It serves transportation providers, logistics service providers, and distribution-intensive companies through distributors, alliance partners, and value added resellers. The company was founded in 1981 and is headquartered in Waterloo, Canada.

About CommVault Systems

Commvault Systems, Inc. provides data protection and information management software applications and related services in the United States, Canada, Latin America, Europe, the Middle East, Africa, Australia, New Zealand, Southeast Asia, and China. The company offers data protection, backup, and recovery software solutions for the backup of databases, files, applications, endpoints, and virtual machines according to data type and recovery profile; and help to optimize storage with deduplication, recover data, and leverage reports. It also provides cloud and infrastructure management software solutions to manage storage hardware and virtual infrastructure; and retention and compliance software solutions that provide content based retention, enterprise search and e-discovery, email archiving, data loss prevention, and secure file sharing services. In addition, the company offers Commvault HyperScale, a cloud-ready on premises data management solution; and Commvault HyperScale software and appliances. Further, it provides customer support, consulting, assessment and design, installation, training, implementation and post-deployment, and education services. The company sells its software and services directly through its sales force to large enterprises, small and medium sized businesses, and government agencies, as well as indirectly through its network of value-added reseller partners, systems integrators, corporate resellers, and original equipment manufacturers. It licenses its software applications to customers in the banking, insurance and financial services, government, healthcare, pharmaceuticals and medical services, technology, legal, manufacturing, utility, and energy industries. The company has strategic relationships with Atos, Cisco, Citrix, Fujitsu, Hewlett Packard Enterprise, Infinidat, Microsoft, Oracle, SAP, and VMware. Commvault Systems, Inc. was founded in 1988 and is headquartered in Tinton Falls, New Jersey.

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