Analyzing The Descartes Systems Group (NASDAQ:DSGX) & Simulations Plus (NASDAQ:SLP)

Simulations Plus (NASDAQ:SLP) and The Descartes Systems Group (NASDAQ:DSGX) are both computer and technology companies, but which is the better stock? We will compare the two companies based on the strength of their risk, analyst recommendations, institutional ownership, valuation, dividends, earnings and profitability.

Institutional & Insider Ownership

78.1% of Simulations Plus shares are held by institutional investors. Comparatively, 77.7% of The Descartes Systems Group shares are held by institutional investors. 19.4% of Simulations Plus shares are held by insiders. Comparatively, 0.3% of The Descartes Systems Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Simulations Plus and The Descartes Systems Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Simulations Plus	-78.63%	11.62%	10.84%
The Descartes Systems Group	21.64%	10.41%	8.81%

Volatility and Risk

Simulations Plus has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500. Comparatively, The Descartes Systems Group has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for Simulations Plus and The Descartes Systems Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Simulations Plus	1	5	4	1	2.45
The Descartes Systems Group	0	5	6	1	2.67

Simulations Plus presently has a consensus target price of $24.40, indicating a potential upside of 49.42%. The Descartes Systems Group has a consensus target price of $121.70, indicating a potential upside of 53.53%. Given The Descartes Systems Group’s stronger consensus rating and higher probable upside, analysts clearly believe The Descartes Systems Group is more favorable than Simulations Plus.

Valuation and Earnings

This table compares Simulations Plus and The Descartes Systems Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Simulations Plus	$80.38 million	4.09	$9.95 million	($3.15)	-5.18
The Descartes Systems Group	$684.78 million	9.95	$143.27 million	$1.69	46.91

The Descartes Systems Group has higher revenue and earnings than Simulations Plus. Simulations Plus is trading at a lower price-to-earnings ratio than The Descartes Systems Group, indicating that it is currently the more affordable of the two stocks.

Summary

The Descartes Systems Group beats Simulations Plus on 9 of the 14 factors compared between the two stocks.

About Simulations Plus

Simulations Plus, Inc. develops drug discovery and development software for modeling and simulation, and prediction of molecular properties utilizing artificial intelligence and machine learning based technology worldwide. The company operates through two segments, Software and Services. It offers GastroPlus, which simulates the absorption and drug interaction of compounds administered to humans and animals; and DDDPlus and MembranePlus simulation products. The company also provides products based on mechanistic and mathematical models, such as DILIsym, NAFLDsym, ILDsym, RENAsym, IPFsym, and MITOsym products. In addition, it offers Absorption, Distribution, Metabolism, Excretion, and Toxicity Predictor for chemistry-based computer program that takes molecular structures as inputs and predicts their properties; and MedChem Designer, as well as MonolixSuite products for modeling and simulation that allows for population analyses, rapid clinical trial data analyses, and regulatory submissions. Further, the company provides clinical-pharmacology-based consulting services, which includes population pharmacokinetic and pharmacodynamic modeling, exposure-response analyses, clinical trial simulations, data programming, and technical writing services in support of regulatory submissions; and early drug discovery services. Additionally, it offers creative and insightful consulting services to support its quantitative systems pharmacology/quantitative systems toxicology modelling. The company serves pharmaceutical, biotechnology, agrochemical, cosmetics, and food industry companies, as well as academic and regulatory agencies. Simulations Plus, Inc. was incorporated in 1996 and is headquartered in Lancaster, California.

About The Descartes Systems Group

The Descartes Systems Group Inc. provides cloud-based logistics and supply chain management solutions worldwide. Its Logistics Technology platform offers a range of modular, interoperable web and wireless logistics management solutions. The company provides a suite of solutions that include routing, mobile, and telematics; transportation management; ecommerce, shipping, and fulfillment; customs and regulatory compliance; global trade intelligence; broker and forwarder enterprise systems; and B2B messaging and connectivity services. It also offers its customers to use its modular, software-as-a-service, and data solutions to route, schedule, track, and measure delivery resources; plan, allocate, and execute shipments; rate, audit, and pay transportation invoices; access and analyze global trade data; research and perform trade tariff and duty calculations; file customs and security documents for imports and exports; and various other logistics processes. In addition, the company provides consulting, implementation, and training services, as well as maintenance and support services. It serves transportation providers, such as air, ocean, and truck modes; logistics service providers, including third-party logistics providers, freight forwarders, and customs brokers; and distribution-intensive companies, such as manufacturers, retailers, distributors, and mobile business service providers through subscription, transactional or perpetual license basis. The Descartes Systems Group Inc. was incorporated in 1981 and is headquartered in Waterloo, Canada.