DZS (DZSIQ) AI Stock Analysis

• Market Cap: $3.88K
• Dividend Yield: N/A
• Average Volume (3M): 128.03K
• Price to Earnings (P/E): ―
• Beta (1Y): 23.57
• Revenue Growth: -42.88%
• EPS Growth: 27.48%
• Country: US
• Employees: 660
• Sector: Technology
• Sector Strength: 81
• Industry: Hardware & Equipment
• EPS (TTM): -2.16
• Shares Outstanding: 38,789,400
• 10 Day Avg. Volume: 325,975
• 30 Day Avg. Volume: 128,025
• PEG Ratio: -4.12
• Price to Book (P/B): 2.50
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -6.42
• Enterprise Value/Market Cap: 94.83K
• Enterprise Value/Revenue: 0.46
• Enterprise Value/Gross Profit: 11.04
• Enterprise Value/Ebitda: -0.86
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 53 Neutral
• Price Target: ―

DZS faces substantial financial difficulties, with declining revenues and negative profit margins. Despite technical indicators suggesting potential stock momentum and recent strategic initiatives, the company's valuation remains poor due to negative earnings. Positive earnings call projections and corporate strategies provide some optimism, but significant risks remain.

DZS Business Overview & Revenue Model

Company Description

DASAN Zhone Solutions Inc. engages in the provision of broad-based network access solutions. It offers solutions for broadband access, Ethernet switching, mobile backhaul, passive optical local-area network (POL), and software defined networks (SDN). The company was founded in June 1999 and is headquartered in Oakland, CA.

How the Company Makes Money

DZS makes money through the sale of its network access solutions and services to telecommunications service providers and enterprises. The company generates revenue from the sale of hardware products like optical line terminals and customer premises equipment, as well as from software solutions for network management. DZS also offers professional services such as installation, maintenance, and support, which contribute to its earnings. Key revenue streams include the deployment of broadband and mobile transport solutions, which are critical for service providers looking to upgrade their infrastructure to support higher data speeds and increased network capacity. Moreover, strategic partnerships with telecommunications companies and technology providers play a significant role in expanding DZS's market reach and enhancing its revenue opportunities.

DZS Financial Statement Overview

Summary

DZS is facing significant financial challenges with declining revenue, high leverage, and negative profit margins. The company also has negative operating and free cash flows, indicating severe liquidity pressures.

Income Statement

The income statement of DZS shows significant challenges. The company has been experiencing declining revenues over the years, with a negative revenue growth rate from 2023 to the TTM period. Gross profit margins have decreased from previous periods, indicating pressure on the company's operational efficiency. The net profit margin is deeply negative, reflecting substantial net losses, which is a critical concern. Both the EBIT and EBITDA margins are negative, highlighting ongoing operational challenges.

Balance Sheet

DZS's balance sheet reveals high leverage, with a debt-to-equity ratio that has fluctuated but remains concerning due to high debt levels relative to equity. The equity ratio has decreased over time, indicating a reduced proportion of equity financing. However, there has been some improvement in equity over the TTM period. Return on equity is negative, further emphasizing profitability issues.

Cash Flow

The cash flow statement indicates cash flow difficulties, with negative operating and free cash flows. The free cash flow growth rate is negative, signaling deteriorating cash generation capability. The operating cash flow to net income ratio shows challenges in converting sales into cash, and the free cash flow to net income ratio is also negative, highlighting liquidity pressures.

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
161.81M	244.54M	375.69M	350.21M	300.64M	306.88M
	Gross Profit
33.33M	40.44M	118.36M	120.27M	96.88M	100.11M
	EBIT
-58.30M	-128.99M	-26.71M	-18.21M	-6.05M	214.00K
	EBITDA
-94.22M	-121.88M	-32.15M	-32.25M	-12.53M	4.00M
	Net Income Common Stockholders
-74.78M	-135.22M	-37.43M	-34.68M	-23.08M	-13.26M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.30M	18.96M	38.32M	53.47M	54.42M	33.39M
	Total Assets
178.50M	249.38M	385.01M	257.67M	252.23M	243.57M
	Total Debt
22.44M	67.74M	50.03M	16.20M	63.99M	58.87M
	Net Debt
18.14M	48.78M	11.71M	-37.27M	9.57M	25.48M
	Total Liabilities
146.17M	226.82M	242.28M	125.76M	158.65M	137.03M
	Stockholders Equity
32.33M	22.56M	142.73M	131.91M	93.58M	106.55M
Cash Flow		Free Cash Flow
-33.25M	-47.45M	-55.43M	-19.91M	2.79M	-25.02M
	Operating Cash Flow
-32.72M	-45.88M	-50.90M	-14.33M	5.06M	-22.70M
	Investing Cash Flow
-7.99M	255.00K	-28.01M	-9.48M	-2.27M	-6.97M
	Financing Cash Flow
54.63M	29.29M	64.77M	23.78M	17.62M	28.04M

DZS Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.02
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DZSIQ, the sentiment is Negative. The current price of 0.02 is below the 20-day moving average (MA) of 0.42, below the 50-day MA of 0.64, and below the 200-day MA of 0.79, indicating a bearish trend. The MACD of -0.19 indicates Positive momentum. The RSI at 21.07 is Positive, neither overbought nor oversold. The STOCH value of 1.37 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DZSIQ.

DZS Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
USIO	67 Neutral	$36.72M	11.36	19.38%	―	3.07%	―
Sector *	62 Neutral	$11.92B	10.03	-7.37%	3.70%	7.32%	-8.25%
DZSIQ	53 Neutral	$3.88K	―	-142.44%	―	-42.88%	27.48%
AIRG	46 Neutral	$47.18M	―	-25.57%	―	8.46%	39.81%
MAXN	45 Neutral	$50.61M	―	307.38%	―	-54.68%	63.56%
CMTL	44 Neutral	$58.20M	―	-43.88%	―	-12.02%	-615.33%
CMBM	41 Neutral	$9.92M	―	-112.88%	―	-34.89%	-579.83%

DZS Corporate Events

DZS Inc. Completes Financial Restatement and Strategic Moves

DZS Inc. has completed its financial restatement and made strategic moves to optimize its business, including divesting certain business units and acquiring NetComm to enhance connectivity solutions. With a focus on sustained profitable growth, the company is positioning itself for future expansion through technology differentiation, particularly in AI and software-defined network automation, as the industry emerges from an inventory correction phase.

DZS Sells IoT Portfolio to Lantronix for $6.5M

DZS Inc. has announced the sale of its Industrial IoT solutions portfolio to Lantronix for $6.5 million, a move that enhances Lantronix’s reach in the IoT market while allowing DZS to focus on its core Broadband Networking and Connectivity systems and Cloud Edge software. This strategic transaction strengthens DZS’s balance sheet and expands Lantronix’s customer base, adding approximately 60 new clients across the U.S., Europe, and Australia, including several marquee names.

DZS Reports Q3 2024 Growth Amid Challenges

DZS Inc. announced its Q3 2024 financial results, highlighting a quarter of topline growth and progress on key initiatives despite a drop in orders compared to the previous year. The company reported a 22.8% increase in net revenue from Q2 2024 and improved gross margins. While losses have decreased, DZS aims to achieve break-even Adjusted EBITDA by 2025 through cost-saving initiatives and synergies from its NetComm acquisition.