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CSP Inc (CSPI)
:CSPI
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CSP
(NASDAQ:CSPI)
Rating:56Neutral
Price Target:
$13.50
▲(16.68%Upside)
CSP (CSPI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$114.12M
Dividend Yield1.09%
Average Volume (3M)53.49K
Price to Earnings (P/E)40175.0
Beta (1Y)1.49
Revenue Growth-11.53%
EPS Growth-128.96%
CountryUS
Employees111
SectorTechnology
Sector Strength90
IndustryInformation Technology Services
Share Statistics
EPS (TTM)-0.01
Shares Outstanding9,863,101
10 Day Avg. Volume16,456
30 Day Avg. Volume53,487
Financial Highlights & Ratios
PEG Ratio0.20
Price to Book (P/B)2.26
Price to Sales (P/S)0.00
P/FCF Ratio25.65
Enterprise Value/Market Cap0.75
Enterprise Value/Revenue0.38
Enterprise Value/Gross Profit5.02
Enterprise Value/Ebitda28.61
Forecast
1Y Price Target
$12.50Price Target Upside8.04% Upside
Rating ConsensusHold
Number of Analyst Covering0
CSP Business Overview & Revenue Model
Company DescriptionCSP Inc. develops and markets IT integration solutions, security products, managed IT services, purpose built network adapters, and cluster computer systems for commercial and defense customers worldwide. It operates in two segments, Technology Solutions and High Performance Products. The Technology Solutions segment provides third-party computer hardware and software as a value added reseller to various customers in Web and infrastructure hosting, education, telecommunications, healthcare services, distribution, financial and professional services, and manufacturing industries. This segment also offers professional IT consulting services, such as planning, designing, assessment, implementation, migration, optimization, and project management; storage and virtualization solutions; enterprise security intrusion prevention, network access control, and unified threat management services; and IT security compliance services. In addition, this segment provides unified communications, wireless, and routing and switching solutions; custom software applications and solutions development and support services; optimization, maintenance, and technical support services; and managed IT services, such as monitoring, reporting, and management of alerts for the resolution and preventive general IT, as well as IT security support tasks. Further, this segment offers managed and cloud services, such as proactive monitoring and remote management of IT infrastructure, managed and hosted unified communication services, security, and backup and replication. The High Performance Products segment offers ARIA Software-Defined Security, a cybersecurity solution; Myricom network adapters; and multicomputer products for digital signal processing applications in the defense markets. CSP Inc. was incorporated in 1968 and is headquartered in Lowell, Massachusetts.
How the Company Makes MoneyCSP Inc. generates revenue through the sale of its high-performance products, such as networking hardware and software solutions, primarily to government and defense sectors. Additionally, the company provides managed IT and cybersecurity services to commercial clients, which include ongoing support and consulting, establishing recurring revenue streams. Partnerships with technology manufacturers and service providers also play a significant role in expanding their market reach and capabilities, further contributing to their financial performance.
CSP Earnings Call Summary
Earnings Call Date:May 14, 2025
(Q2-2025)
| % Change Since: -27.87%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive developments in the AZT PROTECT product line and reseller partnerships, alongside challenges such as a decline in service revenue and gross profit margin, resulting in an overall revenue decline and a quarterly loss.Q2-2025 Updates
Positive Updates
AZT PROTECT Gains Traction
Six new customers signed during the quarter, with potential for follow-on sales reaching seven figures. The pipeline for AZT has increased fivefold over the past few quarters.
New Reseller Partnerships
New reseller partnership with Rexel USA and Oryx Industries, expanding market reach in the U.S. and South Africa. This includes significant projects like protecting a large building material manufacturer and cell tower providers.
Strong Cash Position
The company ended the quarter with over $29 million in cash and cash equivalents, supporting ongoing investments and shareholder returns.
Technology Solutions Revenue and Contracts
Technology Solutions business generated $12 million in revenue. New contracts include a Microsoft Azure migration project for a Florida-based healthcare provider.
Negative Updates
Decline in Service Revenue
Service revenue decreased to $4.6 million from $5.2 million in the prior year due to the absence of a repeat multi-million dollar deal.
Higher Component Costs
Gross profit margin decreased from 45.3% to 32% due to higher component costs and absence of a high-margin contract from the previous year.
Overall Revenue Decline
Overall revenue for the quarter dropped to $13.1 million from $13.7 million in the previous year.
Quarterly Loss
The company reported a loss of $108,000 or $0.01 per diluted share for the fiscal second quarter.
Company Guidance
During the CSPI fiscal 2025 second quarter results conference call, several key metrics and guidance were discussed. Revenue for the quarter was $13.1 million, slightly down from $13.7 million in the prior year, with service revenue at $4.6 million compared to $5.2 million previously. Despite a challenging operating environment, the company secured a six-figure 12-month customer support contract and signed six new customers for its AZT PROTECT solution, which is gaining traction in the OT marketplace. The Technology Solutions segment generated $12 million in revenue, maintaining profitability. The company ended the quarter with over $29 million in cash and cash equivalents, while repurchasing $384,000 worth of common shares and declaring a $0.03 per share quarterly cash dividend. The pipeline for AZT PROTECT expanded fivefold over recent quarters, with new reseller partnerships and significant contracts, including a notable South African cell tower protection agreement expected to generate seven-figure sales over 18 months. Despite potential challenges from price increases and customer spending reductions, CSPI is focused on maximizing opportunities, particularly in the growth of its AZT PROTECT offering.CSP Financial Statement Overview
Summary
CSP's financial performance is mixed. The balance sheet is strong with low leverage, but revenue growth and profitability are weak, as seen in the income statement. The cash flow statement provides a positive outlook with strong cash management and free cash flow.Income Statement
CSP's income statement shows a challenging position with declining revenues and profitability. The TTM revenue decreased by 0.48%, indicating flat growth, while gross and net profit margins are negative, reflecting operational inefficiencies. The EBIT and EBITDA margins are also negative, suggesting difficulties in covering operational costs.55
Neutral
Balance Sheet
The company's balance sheet is relatively strong with a low debt-to-equity ratio of 0.01, suggesting prudent financial leverage. The equity ratio stands at 70.69%, indicating a solid equity base relative to total assets. However, return on equity has been negative in recent periods, highlighting profitability challenges.72
Positive
Cash Flow
CSP's cash flow statement shows resilience, with a positive free cash flow growth rate of 10.09% in the TTM period. The operating cash flow to net income ratio is robust, indicating effective cash management despite the net losses. Free cash flow to net income ratio is positive, reflecting strong cash generation capabilities.78
Positive
| Breakdown | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 55.22M | 64.65M | 54.36M | 49.21M | 61.79M |
| Gross Profit | 18.86M | 21.92M | 18.83M | 16.15M | 17.17M |
| EBITDA | 610.00K | 5.93M | 3.24M | 2.08M | 271.00K |
| Net Income | -326.00K | 5.20M | 1.89M | 234.00K | -1.45M |
Balance Sheet | |||||
| Total Assets | 69.44M | 65.90M | 75.06M | 62.97M | 53.65M |
| Cash, Cash Equivalents and Short-Term Investments | 30.59M | 25.22M | 23.98M | 20.01M | 19.26M |
| Total Debt | 4.67M | 2.95M | 5.18M | 1.70M | 3.88M |
| Total Liabilities | 22.17M | 19.76M | 36.10M | 28.93M | 24.11M |
| Stockholders Equity | 47.27M | 46.15M | 38.96M | 34.05M | 29.53M |
Cash Flow | |||||
| Free Cash Flow | 4.02M | 3.63M | 2.44M | 1.80M | 14.00K |
| Operating Cash Flow | 4.21M | 3.91M | 2.67M | 1.90M | 244.00K |
| Investing Cash Flow | -256.00K | -341.00K | 20.00K | -166.00K | -345.00K |
| Financing Cash Flow | 1.38M | -2.40M | 1.33M | -954.00K | 832.00K |
CSP Technical Analysis
Negative
11.57
Price Trends
12.75
Negative
14.27
Negative
14.98
Negative
Market Momentum
-0.32
Negative
38.77
Neutral
16.44
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CSPI, the sentiment is Negative. The current price of 11.57 is below the 20-day moving average (MA) of 11.91, below the 50-day MA of 12.75, and below the 200-day MA of 14.98, indicating a bearish trend. The MACD of -0.32 indicates Negative momentum. The RSI at 38.77 is Neutral, neither overbought nor oversold. The STOCH value of 16.44 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CSPI.
CSP Risk Analysis
CSP disclosed 26 risk factors in its most recent earnings report. CSP reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
CSP Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $674.30M | 81.55 | 137.01% | ― | 262.87% | 873.76% | |
58 Neutral | $219.33M | 30.51 | 8.09% | 3.96% | -12.26% | ― | |
57 Neutral | $899.15M | 11.56 | -16.27% | 2.29% | 10.33% | -39.65% | |
56 Neutral | $117.81M | 14.84 | -44.27% | ― | -13.18% | 4.83% | |
56 Neutral | $114.12M | 40,175.00 | -3.16% | 1.09% | -11.53% | -128.96% | |
54 Neutral | $252.56M | ― | -73.85% | 1.14% | -9.86% | -2426.25% | |
50 Neutral | $207.23M | ― | -38.32% | ― | -21.83% | -67.07% |
* Technology Sector Average
Performance Comparison
CSPI
CSP
11.04
-3.98
-26.50%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.