Descartes Systems to Show Steady Organic Growth, 15% Adjusted EBITDA Rise in Q3, RBC Says

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Descartes Systems (DSGX) is likely to report stable organic growth and a 15% year-over-year rise in Q3 adjusted earnings before interest, taxes, depreciation, and amortization, RBC Capital Markets said Monday in a preview report.

RBC expects Q3 revenue of about $186 million, up roughly 10% year-over-year and slightly above consensus, and forecasts adjusted EBITDA of $83 million. The firm said constant-currency organic growth should remain steady at 0.4% year-over-year.

RBC said most of the quarter's revenue growth stems from acquisitions, including the Q1 contribution from the $40 million Finale Inventory purchase. The firm also flagged freight-market softness as a headwind.

RBC maintained an outperform rating and a $126 price target on Descartes.

Price: 82.34, Change: -0.08, Percent Change: -0.10

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