Portfolio: Zacks Earnings Certain

Descartes Systems is a logistics‑software and network company that provides the “nervous system” for transportation, trade compliance, and logistics‑intensive businesses, with a growing AI and data moat and structurally high switching costs in many workflows. The company operates the Global Logistics Network (GLN), a multimodal network that connects hundreds of thousands of logistics, transportation, manufacturing, distribution, retail, government, and ecommerce entities in more than 160 countries. The GLN processes large volumes of logistics messages (tenders, status updates, customs filings, etc.) across a vast trading community, creating a network data asset on routes, service levels, and performance. This allows Descartes to create proprietary global trade intelligence and compliance data that is mission-critical for clients. The SaaS pricing model creates high revenue & earnings visibility (91% client retention rate) in addition to their nondiscretionary, mission-critical role they play for intermodal shipping companies worldwide.

The recent stock slide from $115 to $70 is pure multiple compression, in our view, rather than true fundamental risk. At a P/E of 27x using forward EPS expectations, shares are trading for the lowest valuations since 2013 and represent a compelling buying opportunity, in our view.