10:44 AM EDT, 08/30/2024 (MT Newswires) -- Descartes Systems Group ( DSGX ) is expected to release results for fiscal Q2 next Wednesday that would exceed market expectations, RBC said in a note Friday.

RBC analysts forecast GAAP EPS of $0.43, revenue of $161.3 million and adjusted EBITDA of $71 million, higher than the consensus of $0.39, $156.8 million and $70.7 million, respectively. The estimates exclude contribution from the BoxTop acquisition.

"Regarding the $90 million OCR acquisition...we believe Q2 margins may surprise as Descartes brings the business up to the typical profitability on its other trade content businesses," the analysts said.

They also expect organic growth to remain above historical averages, pointing to incrementally improved freight market.

"With organic growth stabilizing above historical averages, we believe Descartes' valuation may re-rate higher," they added. RBC kept its outperform rating and $115 price target.

Price: 100.03, Change: +0.13, Percent Change: +0.13