Deswell (DSWL) AI Stock Analysis

• Market Cap: $37.93M
• Dividend Yield: 8.4%
• Average Volume (3M): 23.26K
• Price to Earnings (P/E): 3.4
• Beta (1Y): 0.27
• Revenue Growth: -5.68%
• EPS Growth: 67.36%
• Country: US
• Employees: 921
• Sector: Technology
• Sector Strength: 81
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 0.31
• Shares Outstanding: 15,935,239
• 10 Day Avg. Volume: 19,901
• 30 Day Avg. Volume: 23,264
• PEG Ratio: -0.27
• Price to Book (P/B): 0.47
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 3.46
• Enterprise Value/Market Cap: 0.53
• Enterprise Value/Revenue: 0.06
• Enterprise Value/Gross Profit: 1.50
• Enterprise Value/Ebitda: 0.67
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• 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.

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	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
66.81M	69.37M	77.54M	85.49M	64.89M	65.37M
	Gross Profit
13.40M	13.90M	12.84M	13.95M	13.17M	11.86M
	EBIT
3.30M	3.79M	2.89M	2.89M	3.26M	1.41M
	EBITDA
4.86M	5.39M	4.83M	4.87M	4.43M	3.86M
	Net Income Common Stockholders
10.34M	7.71M	2.06M	8.23M	8.23M	-1.32M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
65.76M	57.91M	46.98M	43.88M	46.81M	42.74M
	Total Assets
120.48M	111.08M	110.38M	115.54M	107.86M	95.38M
	Total Debt
0.00	0.00	0.00	0.00	0.00	0.00
	Net Debt
-13.44M	-15.75M	-22.16M	-13.46M	-20.22M	-22.51M
	Total Liabilities
21.71M	16.91M	20.73M	24.63M	22.17M	15.06M
	Stockholders Equity
98.76M	94.17M	89.65M	90.91M	85.69M	80.32M
Cash Flow		Free Cash Flow
11.58M	12.83M	12.21M	-1.69M	2.75M	12.61M
	Operating Cash Flow
11.95M	13.21M	13.00M	-183.00K	3.30M	13.12M
	Investing Cash Flow
-16.85M	-16.43M	-1.11M	-3.43M	-2.72M	-2.66M
	Financing Cash Flow
-3.98M	-3.19M	-3.19M	-3.14M	-2.86M	-2.32M

Deswell Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.45
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DSWL, the sentiment is Positive. The current price of 2.45 is above the 20-day moving average (MA) of 2.34, above the 50-day MA of 2.30, and above the 200-day MA of 2.39, indicating a neutral trend. The MACD of <0.01 indicates Negative momentum. The RSI at 55.27 is Neutral, neither overbought nor oversold. The STOCH value of 62.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DSWL.

Deswell Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DSWL	78 Outperform	$37.93M	3.41	11.35%	8.40%	-5.68%	67.36%
LGL	64 Neutral	$37.51M	89.50	1.04%	―	28.82%	60.24%
MIND	63 Neutral	$47.66M	33.52	12.53%	―	22.59%	―
Sector *	62 Neutral	$11.89B	9.95	-7.22%	4.98%	7.31%	-8.91%
REFR	49 Neutral	$58.64M	―	-37.98%	―	62.28%	44.68%
FCUV		$26.29M	―	-145.98%	―	―	―
OPTX	47 Neutral	$47.33M	―	-2.17%	―	―	―