Portfolio: Zacks Earnings Certain Core

Descartes Systems (DSGX) is a high-quality, asset-light logistics software and trade-compliance provider built around its Global Logistics Network, which embeds it deeply into customer workflows and creates strong network effects and switching costs. It generates ~80%+ recurring revenue, 45%+ EBITDA margins, excellent FCF conversion, and carries no debt, funding a steady cadence of small, accretive M&A that extends its product breadth and network. Secular tailwinds include growing supply‑chain complexity and e‑commerce logistics needs—all of which increase demand for Descartes’ customs, trade intelligence, and transportation solutions. AI features (automated classification, screening, routing) should enhance product value and pricing power. The main risks are decelerating organic growth, dependence on continued M&A execution, but its recent valuation compression from its premium multiple now makes it an attractive buying opportunity.