Descartes Systems DSGX shares rallied 4.4% in the last trading session to close at $112.50. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 5.6% gain over the past four weeks.

The increase in share price can be attributed to optimism surrounding the company’s acquisition strategy. Descartes has strategically acquired companies to enhance its product offerings and secure innovative technologies and talent. This approach strengthens its overall portfolio, enabling the company to capitalize on growth opportunities across various sectors, driving revenues. It recently expanded its e-commerce portfolio by acquiring Sellercloud for about $110 million, funded by cash in hand. Sellercloud is a leading provider of omnichannel e-commerce solutions that supports small and mid-sized retailers, distributors, wholesalers and manufacturers manage their operations across multiple channels.

In September 2024, Descartes expanded its portfolio by acquiring Assure Assist, Inc., operating as MyCarrierPortal (“MCP”). MCP is renowned for its carrier onboarding and risk monitoring solutions for the trucking industry, enabling freight brokers and shippers to manage their carrier networks efficiently. In June 2024, it acquired England-based BoxTop Technologies Limited for $13 million (or £10.25 million) in an all-cash transaction. The acquisition will integrate BoxTop solutions with its Global Logistics Network platform. The initiative is likely to broaden the network’s reach and capabilities, providing customers with even greater efficiency and visibility across their supply chains.

In the last reported quarter, DSGX revenues soared 14% year over year to $163.4 million, beating the Zacks Consensus Estimate by 2.8%. Synergies stemming from the acquisition of BoxTop Technologies during the quarter, along with OCR and Thyme ASD buyouts settled in the fiscal first quarter, drove the top-line performance.

In addition to inorganic expansion, DSGX remains focused on organic growth to drive revenues. Momentum in real-time visibility, global trade intelligence, routing and scheduling solutions and e-commerce business bodes well. It witnessed organic revenue growth of 9% from new and existing customers in the last reported quarter.

This logistics provider is expected to post quarterly earnings of $0.44 per share in its upcoming report, which represents a year-over-year change of +41.9%. Revenues are expected to be $162.98 million, up 12.6% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Descartes Systems, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on DSGX going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Descartes Systems is part of the Zacks Computer - Software industry. Sapiens SPNS, another stock in the same industry, closed the last trading session 5% higher at $38.98. SPNS has returned 2.8% in the past month.

For Sapiens , the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.37. This represents a change of +8.8% from what the company reported a year ago. Sapiens currently has a Zacks Rank of #3 (Hold).

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