Financial Analysis: Elastic (NYSE:ESTC) versus The Descartes Systems Group (NASDAQ:DSGX)

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

Institutional & Insider Ownership

77.7% of The Descartes Systems Group shares are owned by institutional investors. Comparatively, 97.0% of Elastic shares are owned by institutional investors. 0.3% of The Descartes Systems Group shares are owned by company insiders. Comparatively, 15.9% of Elastic shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares The Descartes Systems Group and Elastic”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
The Descartes Systems Group	$572.90 million	17.79	$115.91 million	$1.59	74.92
Elastic	$1.27 billion	8.54	$61.72 million	$0.55	189.81

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

Volatility and Risk

The Descartes Systems Group has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500. Comparatively, Elastic has a beta of 1.06, indicating that its share price is 6% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for The Descartes Systems Group and Elastic, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
The Descartes Systems Group	0	4	9	1	2.79
Elastic	0	7	18	1	2.77

The Descartes Systems Group currently has a consensus target price of $117.92, suggesting a potential downside of 1.02%. Elastic has a consensus target price of $125.35, suggesting a potential upside of 20.07%. Given Elastic’s higher possible upside, analysts clearly believe Elastic is more favorable than The Descartes Systems Group.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
The Descartes Systems Group	21.80%	10.65%	8.88%
Elastic	4.39%	-13.20%	-4.59%

About The Descartes Systems Group

The Descartes Systems Group Inc. provides cloud-based logistics and supply chain management solutions worldwide. Its Logistics Technology platform offers a range of modular, interoperable web and wireless logistics management solutions. The company provides a suite of solutions that include routing, mobile, and telematics; transportation management; ecommerce, shipping, and fulfillment; customs and regulatory compliance; global trade intelligence; broker and forwarder enterprise systems; and B2B messaging and connectivity services. It also offers its customers to use its modular, software-as-a-service, and data solutions to route, schedule, track, and measure delivery resources; plan, allocate, and execute shipments; rate, audit, and pay transportation invoices; access and analyze global trade data; research and perform trade tariff and duty calculations; file customs and security documents for imports and exports; and various other logistics processes. In addition, the company provides consulting, implementation, and training services, as well as maintenance and support services. It serves transportation providers, such as air, ocean, and truck modes; logistics service providers, including third-party logistics providers, freight forwarders, and customs brokers; and distribution-intensive companies, such as manufacturers, retailers, distributors, and mobile business service providers through subscription, transactional or perpetual license basis. The Descartes Systems Group Inc. was incorporated in 1981 and is headquartered in Waterloo, Canada.

About Elastic

Elastic N.V., a data analytics company, delivers solutions designed to run in public or private clouds in multi-cloud environments. It primarily offers Elastic Stack, a set of software products that ingest and store data from various sources and formats, as well as performs search, analysis, and visualization on that data. The company's Elastic Stack product portfolio comprises Elasticsearch, a distributed, real-time search and analytics engine, and data store for various types of data, including textual, numerical, geospatial, structured, and unstructured; Kibana, a user interface, management, and configuration interface for the Elastic Stack; Elastic Agent that offers integrated host protection and central management services; Beats, a single-purpose data shippers for sending data from edge machines to Elasticsearch or Logstash; and Logstash, a data processing pipeline for ingesting data into Elasticsearch or other storage systems from a multitude of sources simultaneously. It also provides software solutions on the Elastic Stack that address cases, including search applications, workplace search, logs, metrics, application performance monitoring, synthetic monitoring, security information and event management (SIEM), endpoint security, extended detection and response, and cloud security. The company was incorporated in 2012 and is based in Amsterdam, the Netherlands.