Durable Capital Liquidates Descartes Systems Position: Should Investors Avoid the Stock?
Key Points
Descartes Systems sold 2,253,704 shares in The Descartes Systems Group, reducing exposure by an estimated $229.08 million.
The transaction represented approximately 1.73% of the fund's reportable U.S. equity assets under management (AUM).
Post-trade stake in Descartes: 0 shares, $0 value.
The position previously accounted for approximately 1.73% of AUM as of the prior quarter.
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Durable Capital Partners LP fully exited its position in The Descartes Systems Group (NASDAQ:DSGX), cutting 2,253,704 shares, for an estimated $229.08 million portfolio shift, according to a Nov. 14, 2025, SEC filing.
What happened
According to its Nov. 14, 2025, SEC filing, Durable Capital Partners sold its entire holding in The Descartes Systems Group during the third quarter of 2025.
What else to know
The fund sold out of Descartes Group, which represented 1.7% of its reportable AUM as of the prior quarter; post-trade, the stake is 0% of AUM.
Durable Capital's top holdings after the filing:
- RBC Bearings (NYSE: RBC): $983.94 million (7.3% of AUM)
- Coupang (NYSE: CPNG): $799.63 million (5.9% of AUM)
- Shopify (NASDAQ: SHOP): $675.26 million (5.0% of AUM)
- Colliers International Group (NASDAQ: CIGI): $577.84 million (4.3% of AUM)
- XPO (NYSE: XPO): $559.90 million (4.1% of AUM
As of Dec. 4, 2025, shares of Descartes Systems were priced at $94.87, down 23% from a year ago, underperforming the S&P 500 by 36 percentage points over that period.
Company overview
| Metric | Value |
|---|---|
| Price (as of market close 2025-12-4) | $94.87 |
| Market Capitalization | $8.2 billion |
| Revenue (TTM) | $704 million |
| Net Income (TTM) | $156 million |
Company snapshot
Descartes Systems:
- Provides cloud-based logistics and supply chain management solutions, including routing, transportation management, customs compliance, and e-commerce warehouse management.
- Operates a modular, software-as-a-service (SaaS) business model, generating revenue through subscriptions and data-driven logistics services.
- Serves transportation providers, logistics service providers, manufacturers, retailers, distributors, and other distribution-intensive enterprises globally.
The Descartes Systems Group is a leading provider of cloud-based logistics technology, enabling customers to optimize and automate complex supply chain processes.
The company leverages its scalable SaaS platform and global logistics network to deliver mission-critical solutions for efficiency and compliance.
Its focus on interoperability and modularity supports serving diverse, logistics-intensive industries worldwide.
Foolish take
Durable Capital's complete sale of Descartes Systems is certainly eye-catching. After owning the stock for the last five years -- during which time the stock matched the S&P 500's total returns -- the firm is seemingly taking its profits and moving on to new ideas.
However, from a long-term Foolish perspective, I think there are plenty of reasons to keep holding (or even adding to) shares of the company today.
Descartes is a 15-bagger since 2010, over which time it doubled the returns of the S&P 500. This is despite the stock's 23% pullback this year.
Utilizing its expertise as a serial acquirer, the company has emerged as a leader in its cloud-based logistics and supply chain management niche. In a world shifting increasingly toward omnichannel sales, Descartes solutions are quickly becoming a no-brainer selection over outdated legacy systems.
Holding numerous No. 1 and leadership designations from industry experts -- and generating undeniably steady sales growth of 14% annually over the last one, five, and ten years -- Descartes may be a buy-the-dip opportunity in my opinion.
That said, the company still trades at 36 times free cash flow, so its premium valuation may have played a role in Durable Capital's decision to sell. Ultimately, I'd be thinking in terms of a decade or more when holding Descartes, so I'd rather buy the best-in-class stock today, even at a slightly lofty valuation.
Glossary
Exited position: When an investor sells all shares of a particular holding, fully closing out their investment.
Portfolio shift: A significant change in the composition or allocation of assets within an investment portfolio.
Assets under management (AUM): The total market value of assets a fund or investment manager oversees for clients.
Reportable U.S. equity assets: U.S. stock holdings that must be disclosed to regulators, typically in quarterly filings.
Stake: The amount of ownership or shares an investor holds in a company.
Holdings: The individual securities or assets owned by a fund or investor.
Quarterly average pricing: The average price of a security over a specific quarter, used for estimating transaction values.
Cloud-based: Services or software delivered over the internet rather than installed locally on computers.
Logistics: The management of the flow of goods, information, and resources from origin to consumption.
Supply chain management: The coordination and oversight of all activities involved in producing and delivering products.
Software-as-a-Service (SaaS): A software delivery model where applications are accessed online via subscription rather than purchased outright.
TTM: The 12 months ending with the most recent quarterly report.
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Josh Kohn-Lindquist has positions in Coupang and Shopify. The Motley Fool has positions in and recommends Colliers International Group, Descartes Systems Group, and Shopify. The Motley Fool recommends Coupang and XPO. The Motley Fool has a disclosure policy.
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