Deswell (DSWL) AI Stock Analysis

• Market Cap: $52.59M
• Dividend Yield: 6.15%
• Average Volume (3M): 22.20K
• Price to Earnings (P/E): 4.2
• Beta (1Y): 0.17
• Revenue Growth: -1.72%
• EPS Growth: 20.66%
• Country: US
• Employees: 921
• Sector: Technology
• Sector Strength: 88
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 0.47
• Shares Outstanding: 15,935,239
• 10 Day Avg. Volume: 20,271
• 30 Day Avg. Volume: 22,201
• PEG Ratio: 0.07
• Price to Book (P/B): 0.37
• Price to Sales (P/S): 0.56
• P/FCF Ratio: 2.85
• Enterprise Value/Market Cap: -0.72
• Enterprise Value/Revenue: -0.58
• Enterprise Value/Gross Profit: -2.61
• Enterprise Value/Ebitda: -3.88
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 78 Outperform
• Price Target: ―

Deswell's stock score reflects its strong financial foundation, characterized by excellent profitability margins, no debt, and solid cash flow management. The low P/E ratio and high dividend yield highlight its attractive valuation. However, technical indicators suggest a neutral to slightly bearish outlook, which moderates the overall score.

Positive Factors

Balance Sheet Health

Deswell's lack of debt and strong equity position provide financial stability and flexibility, reducing risk and supporting long-term growth.

Cash Generation Ability

The growth in free cash flow indicates efficient cash management, ensuring the company can fund operations and investments without external financing.

Profitability Margins

Strong profitability margins reflect operational efficiency and pricing power, enhancing Deswell's ability to sustain earnings over time.

Negative Factors

Revenue Decline

The decline in revenue growth suggests challenges in market demand or competition, which could impact future sales and profitability.

Market Position

A declining revenue trend may indicate weakening market position or competitive pressures, potentially affecting long-term business prospects.

Revenue Growth Trends

Sustained revenue decline can limit growth opportunities and affect the company's ability to invest in innovation and expansion.

Deswell Business Overview & Revenue Model

Company Description

Deswell Industries, Inc. manufactures and sells injection-molded plastic parts and components, electronic products and subassemblies, and metallic molds and accessory parts for original equipment manufacturers and contract manufacturers. It operates in two segments, Plastic Injection Molding and Electronic Products Assembling. The company produces a range of plastic parts and components that are used in the manufacture of consumer and industrial products, which include plastic components for electronic entertainment products, power tools, accessories, and outdoor equipment; cases for flashlights, telephones, printers, scanners; parts for industrial components, and indoor control switches, as well as parts for audio equipment, and cases and key tops for personal organizers and remote controls; double injection caps; parts for medical products comprising apparatus for blood tests; laser key caps; automobile components; and plastic components of automatic robot. It also provides electronic products that consist of audio equipment, including digital and analogue mixing consoles, amplifiers, signal processors, audio interfaces, network audio equipment, and speaker enclosures; consumer audio products, such as multi-channel receivers-amplifiers, and wired and wireless audio streaming products; printed circuit board assemblies; and IoT products. The company sells its products primarily in China, the United States, Hong Kong, the United Kingdom, Norway, Holland, Canada, and internationally. Deswell Industries, Inc. was founded in 1987 and is based in Macau.

How the Company Makes Money

Deswell Industries generates revenue through the manufacturing and sale of injection-molded plastic components and electronic products. The company's key revenue streams include contracts with original equipment manufacturers (OEMs) and other businesses that require custom plastic parts and electronic assemblies. Deswell leverages its manufacturing facilities in China to produce cost-effective and high-quality products, which are then sold to clients across various industries. Partnerships with major companies in the automotive, consumer electronics, and telecommunications sectors significantly contribute to Deswell's earnings, as these industries consistently demand precision components and assemblies. Additionally, Deswell's ability to offer a complete range of services, from design to final production, enhances its value proposition and attracts a diverse customer base.

Deswell Financial Statement Overview

Summary

Deswell exhibits strong financial performance with excellent profitability margins and a robust balance sheet characterized by no debt and high equity. Despite a decline in revenue, the company shows solid cash flow management and profitability, reflecting financial resilience.

Income Statement

Deswell has shown strong performance in terms of net profit margin and EBIT margin, with the latest figures being 11.11% and 5.45% respectively. The company also experienced a significant improvement in net income from $2.06 million in 2023 to $7.71 million in 2024. However, the revenue growth rate was negative at -10.53%, which indicates a decline in sales, affecting overall revenue growth.

Balance Sheet

Deswell exhibits a robust equity position with a debt-to-equity ratio of 0, indicating no reliance on debt financing. The return on equity is also strong at 8.18%, showcasing efficient use of equity capital. The company's equity ratio stands at 84.75%, reflecting a stable financial foundation with a high proportion of assets financed by shareholders' equity.

Cash Flow

The cash flow statement reveals a healthy operating cash flow to net income ratio of 1.71, suggesting strong cash generation relative to net income. Free cash flow has grown by 5.09% from the previous year, which is a positive sign of cash flow health. Additionally, the free cash flow to net income ratio is a robust 1.66, indicating efficient cash flow management.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	65.66M	67.61M	69.37M	77.54M	85.49M	64.89M
Gross Profit	14.57M	13.64M	13.90M	12.84M	13.95M	13.17M
EBITDA	9.79M	3.95M	9.34M	4.83M	9.80M	10.46M
Net Income	12.47M	11.14M	7.71M	2.06M	8.23M	8.23M
Balance Sheet
Total Assets	128.21M	120.21M	111.08M	110.38M	115.54M	107.86M
Cash, Cash Equivalents and Short-Term Investments	79.67M	75.50M	57.91M	46.98M	43.88M	45.30M
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	20.17M	18.09M	16.91M	20.73M	24.63M	22.17M
Stockholders Equity	108.05M	102.12M	94.17M	89.65M	90.91M	85.69M
Cash Flow
Free Cash Flow	7.95M	13.20M	12.83M	12.21M	-1.69M	2.75M
Operating Cash Flow	8.35M	13.53M	13.21M	13.00M	-183.00K	3.30M
Investing Cash Flow	1.07M	2.04M	-16.43M	-1.11M	-3.43M	-2.72M
Financing Cash Flow	-3.19M	-3.19M	-3.19M	-3.19M	-3.14M	-2.86M

Deswell Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3.25
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DSWL, the sentiment is Negative. The current price of 3.25 is below the 20-day moving average (MA) of 3.51, below the 50-day MA of 3.46, and above the 200-day MA of 2.92, indicating a neutral trend. The MACD of -0.06 indicates Positive momentum. The RSI at 38.58 is Neutral, neither overbought nor oversold. The STOCH value of >-0.01 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DSWL.

Deswell Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DSWL	78 Outperform	$52.59M	4.22	12.06%	6.15%	-1.72%	20.66%
LGL	64 Neutral	$32.91M	35.27	2.33%	―	14.07%	153.24%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
MIND	60 Neutral	$67.51M	20.12	9.37%	―	2.21%	-15.60%
REFR	49 Neutral	$48.45M	-26.33	-87.36%	―	-16.49%	-59.21%
OPTX	41 Neutral	$51.69M	-17.61	-27.25%	―	-44.83%	-296.14%