A tech inventory can nonetheless be a purchase when it’s down if the enterprise retains getting stronger whereas the market temper will get weaker. You need sticky prospects, recurring income, and a product that solves an unglamorous downside firms can’t ignore. You additionally need proof within the numbers, not only a story. If money move stays strong, margins maintain, and administration retains executing, a falling share value can flip into a chance as an alternative of a warning.
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DSG
Descartes Methods Group (TSX:DSG) matches the “quiet powerhouse” profile. It sells software program that helps firms transfer items world wide and keep compliant whereas doing it. Suppose delivery, routing, customs filings, commerce compliance, and all the information and paperwork that hold world logistics from turning into chaos. It earns most of its income from providers, which are typically steadier than one-off licence gross sales. That steadiness issues most when buyers get nervous and begin punishing something that feels cyclical.
Over the past yr, the tech inventory pulled again meaningfully, which has made folks ask the correct query: Is one thing damaged, or is the market simply in a nasty temper? With Descartes, the tech inventory has stored behaving like a compounding enterprise. It continued so as to add capabilities, deepen its community, and place itself because the system behind the system for logistics and compliance. When an organization’s product sits within the “should work every single day” class, demand often seems to be extra resilient than it does for trendier tech.
The tech inventory’s personal updates have additionally leaned assured. In its current quarterly outcomes, it highlighted report quarterly income and report revenue from operations. It additionally put a share-repurchase program in place via a traditional course issuer bid, which indicators administration sees worth within the inventory at present ranges. It additionally outlined a deliberate finance management transition for spring 2026, and people sorts of adjustments often occur most easily when a enterprise has a steady footing.
Earnings help
Now to the half that issues if you wish to maintain it for many years: earnings energy. In its fiscal 2026 third quarter, Descartes reported income of US$187.7 million, up 11% yr over yr. It posted revenue from operations of US$56.6 million and internet revenue of US$43.9 million. Diluted earnings per share (EPS) got here in at US$0.50. Money supplied by working actions reached US$73.4 million, displaying a tech inventory that already prints actual cash whereas it grows.
The longer view seems to be constant, too. In its fiscal 2025 annual outcomes, Descartes reported income of US$651 million and internet revenue of US$143.3 million. Diluted EPS landed at US$1.64. Working money move got here in at US$219.3 million. These numbers present a sample, not a one-off quarter. That is what long-term winners typically appear to be within the center innings.
The ahead setup for Descartes stays well timed. International commerce retains throwing curveballs, whether or not that comes from shifting guidelines, tighter screening, or rising compliance complexity. Descartes sells instruments that assist prospects cope with complexity as an alternative of hoping it disappears. That provides it a sensible tailwind, as companies hold delivery items even when the principles really feel messy. The chance is {that a} broad slowdown in delivery volumes can nonetheless soften some activity-based income, even when recurring providers income stays resilient.
Backside line
So, might this be the Canadian tech inventory to purchase whereas it’s down? It might, if an investor desires a worthwhile, cash-generating software program enterprise with a crucial position in world commerce and the endurance to carry via sentiment swings. It is also a move for anybody who wants a quick bounce, as premium tech can re-rate slowly when buyers keep cautious. If the aim actually is a long time, the case rests on one factor: Descartes retains turning complexity into recurring income, quarter after quarter, while not having good financial situations to do it.