If you are looking for a “set it and forget it” Canadian stock, Descartes Systems Group (TSX:DSG) deserves your full attention. The Waterloo-based logistics technology company is sitting roughly 41% below its all-time high, making it attractive to value investors.
This is my clear view: Descartes is a buy for long-term investors willing to be patient.
Source: Getty Images
The bull case for the mid-cap Canadian stock
Valued at a market cap of $8.7 billion, the TSX tech stock returned 300% to shareholders in the past decade. Even after accounting for the ongoing pullback, Descartes has delivered inflation-beating returns for long-term shareholders.
Descartes operates behind the scenes, powering the global movement of goods for some of the world’s largest companies. The company offers a cloud-based logistics platform that helps businesses route deliveries, manage shipments, file customs documents, and track goods across air, ocean, and truck networks.
Its clients include freight forwarders, customs brokers, retailers, manufacturers, and distributors across North America, Europe, the Middle East, Africa, and Asia-Pacific.
Every time a company ships a product across a border, someone needs to handle the customs filings, the routing decisions, and the compliance checks. Descartes is often the technology platform used to process these transactions.
What makes the business model attractive is its stickiness. Customers do not typically rip out logistics software and replace it. It is deeply embedded in their daily operations, allowing Descartes to collect recurring subscription revenue from a loyal, hard-to-replace customer base year after year.
Is the Canadian tech stock a good buy?
At its June 2026 Annual Meeting of Shareholders, Descartes CEO Edward Ryan pointed to artificial intelligence as a growing driver of value for customers.
Ryan described how the company is already using AI within its MacroPoint solution to speed up the process of adding trucking companies and trading partners to its network. More importantly, he outlined a longer-term opportunity that sounds genuinely compelling.
“Our network, I think, over time, we’re already starting to see some of these results, is able to identify problems that they might be having on those particular shipments and use the network and all of its knowledge of where everything and assets are going to be over the next 30 days to try and reconnect or reset up those shipments to operate more quickly,” Ryan said at the meeting.
Basically, Descartes sits atop a massive network that handles roughly a month’s worth of global shipments at any given time. When things go wrong, and in global logistics, they often do, its AI tools can spot the problem and rebook or reroute shipments before the disruption snowballs into a costly delay.
Ryan called this “the biggest area to help us” over the long run.
Is the TSX tech stock undervalued?
Descartes has built its business through a disciplined acquisition strategy, buying modular logistics software companies over many years and weaving them into its broader platform. The result is a deeply interoperable suite of tools that serves a wide range of supply chain needs under one roof.
Analysts tracking the TSX tech stock forecast free cash flow to improve from $260.5 billion in fiscal 2026 (ended in January) to $474 billion in fiscal 2031.
If DSG stock is priced at 25 times forward FCF, which is below the 10-year average of 31.6 times, it could deliver over 80% returns within the next four years.
The 41% pullback from its highs reflects the broader reset in software valuations over the past couple of years. But the underlying business has not deteriorated. Revenue remains largely recurring, and the platform continues to grow. And now, an AI-powered catalyst is beginning to take shape atop an already durable foundation.
For long-term investors, a quality logistics software company with growing AI capabilities, a loyal customer base, and a 41% discount to its peak is a setup worth acting on.
I believe stocks like Descartes are ones buy-and-hold investors should build positions in during periods of market weakness.
