ACI Worldwide (NASDAQ:ACIW) & The Descartes Systems Group (NASDAQ:DSGX) Financial Analysis

ACI Worldwide (NASDAQ:ACIW) and The Descartes Systems Group (NASDAQ:DSGX) are both mid-cap computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, risk, institutional ownership, valuation, dividends and profitability.

Insider and Institutional Ownership

94.7% of ACI Worldwide shares are owned by institutional investors. Comparatively, 77.7% of The Descartes Systems Group shares are owned by institutional investors. 1.1% of ACI Worldwide shares are owned by company insiders. Comparatively, 0.3% of The Descartes Systems Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares ACI Worldwide and The Descartes Systems Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ACI Worldwide	$1.70 billion	2.97	$203.12 million	$2.37	20.66
The Descartes Systems Group	$684.78 million	10.58	$143.27 million	$1.69	49.88

ACI Worldwide has higher revenue and earnings than The Descartes Systems Group. ACI Worldwide 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.

Risk & Volatility

ACI Worldwide has a beta of 1.09, meaning that its stock price is 9% more 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 recommendations for ACI Worldwide and The Descartes Systems Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ACI Worldwide	0	2	3	0	2.60
The Descartes Systems Group	0	5	6	1	2.67

ACI Worldwide currently has a consensus target price of $60.00, indicating a potential upside of 22.54%. The Descartes Systems Group has a consensus target price of $121.70, indicating a potential upside of 44.36%. Given The Descartes Systems Group’s stronger consensus rating and higher probable upside, analysts clearly believe The Descartes Systems Group is more favorable than ACI Worldwide.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
ACI Worldwide	14.76%	19.09%	8.63%
The Descartes Systems Group	21.64%	10.41%	8.81%

Summary

The Descartes Systems Group beats ACI Worldwide on 8 of the 15 factors compared between the two stocks.

About ACI Worldwide

ACI Worldwide, Inc., a software company, develops, markets, installs, and supports a range of software products and solutions for facilitating digital payments in the United States and internationally. The company operates in three segments: Banks, Merchants, and Billers. The company offers ACI Acquiring, a solution to process credit, debit, and prepaid card transactions, deliver digital innovation, and fraud prevention; ACI Issuing, a digital payment issuing solution for new payment offering; and ACI Enterprise Payments Platform that provides payment processing and orchestration capabilities for digital payments. It also provides ACI Low Value Real-Time Payments, a platform for processing real-time payments; and ACI High Value Real-Time Payments, a payments engine that offers multi-bank, multi-currency, 24×7 payment processing, and SWIFT messaging. In addition, the company offers ACI Payments Orchestration Platform for optimizing payments; omni-channel payment platform; ACI Fraud Management, a real-time approach to fraud management; and ACI Speedpay, an integrated suite of digital billing, payment, disbursement, and communication services. The company offers electronic bill presentment and payment services to consumer finance, insurance, healthcare, higher education, utility, government, telecommunications, and mortgage sectors; implementation services, include product installations and configurations, and custom software modifications; and business and technical consultancy, on-site support, product education, and testing services, as well as distributes or acts as a sales agent for software developed by third parties. It markets its products under the ACI Worldwide brand. The company was formerly known as Transaction Systems Architects, Inc. and changed its name to ACI Worldwide, Inc. in July 2007. The company was founded in 1975 and is based in Elkhorn, Nebraska.

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.