We assign a fundamental rating of 5 out of 10 to DSP. DSP was compared to 278 industry peers in the Software industry. DSP has an excellent financial health rating, but there are some minor concerns on its profitability. DSP is valued quite expensively, but it does show have an excellent growth rating.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

DSP had positive earnings in the past year.
DSP had a positive operating cash flow in the past year.
In multiple years DSP reported negative net income over the last 5 years.
DSP had a positive operating cash flow in 4 of the past 5 years.

1.2 Ratios

With a Return On Assets value of 0.47%, DSP perfoms like the industry average, outperforming 57.19% of the companies in the same industry.
The Return On Equity of DSP (7.90%) is better than 70.86% of its industry peers.
DSP has a Return On Invested Capital of 1.51%. This is in the better half of the industry: DSP outperforms 65.11% of its industry peers.

		Industry Rank	Sector Rank
ROA	0.47%
ROE	7.9%
ROIC	1.51%

ROA(3y)-1.15%

ROA(5y)0.6%

ROE(3y)-6.93%

ROE(5y)1.47%

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

DSP has a Profit Margin (0.57%) which is in line with its industry peers.
In the last couple of years the Profit Margin of DSP has declined.
The Operating Margin of DSP (1.63%) is better than 62.95% of its industry peers.
In the last couple of years the Operating Margin of DSP has declined.
The Gross Margin of DSP (45.90%) is worse than 72.30% of its industry peers.
DSP's Gross Margin has been stable in the last couple of years.

		Industry Rank	Sector Rank
OM	1.63%
PM (TTM)	0.57%
GM	45.9%

OM growth 3YN/A

OM growth 5Y-31.13%

PM growth 3YN/A

PM growth 5Y-30.98%

GM growth 3Y2.69%

GM growth 5Y1.24%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so DSP is destroying value.
The number of shares outstanding for DSP remains at a similar level compared to 1 year ago.
The number of shares outstanding for DSP has been increased compared to 5 years ago.
There is no outstanding debt for DSP. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.

2.2 Solvency

DSP has an Altman-Z score of 2.41. This is not the best score and indicates that DSP is in the grey zone with still only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.41, DSP perfoms like the industry average, outperforming 54.68% of the companies in the same industry.
DSP has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.

		Industry Rank	Sector Rank
Debt/Equity	0
Debt/FCF	0
Altman-Z	2.41

ROIC/WACC0.14

WACC11.08%

2.3 Liquidity

DSP has a Current Ratio of 2.62. This indicates that DSP is financially healthy and has no problem in meeting its short term obligations.
With a decent Current ratio value of 2.62, DSP is doing good in the industry, outperforming 70.86% of the companies in the same industry.
DSP has a Quick Ratio of 2.62. This indicates that DSP is financially healthy and has no problem in meeting its short term obligations.
With a decent Quick ratio value of 2.62, DSP is doing good in the industry, outperforming 71.22% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	2.62
Quick Ratio	2.62

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

DSP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 57.14%, which is quite impressive.
The Earnings Per Share has been decreasing by -5.11% on average over the past years.
The Revenue has grown by 22.97% in the past year. This is a very strong growth!
Measured over the past years, DSP shows a quite strong growth in Revenue. The Revenue has been growing by 11.89% on average per year.

EPS 1Y (TTM)57.14%

EPS 3YN/A

EPS 5Y-5.11%

EPS Q2Q%-33.33%

Revenue 1Y (TTM)22.97%

Revenue growth 3Y8.88%

Revenue growth 5Y11.89%

Sales Q2Q%7.08%

3.2 Future

The Earnings Per Share is expected to grow by 51.28% on average over the next years. This is a very strong growth
Based on estimates for the next years, DSP will show a quite strong growth in Revenue. The Revenue will grow by 13.52% on average per year.

EPS Next Y19.99%

EPS Next 2Y67.24%

EPS Next 3Y67.45%

EPS Next 5Y51.28%

Revenue Next Year19.12%

Revenue Next 2Y18.42%

Revenue Next 3Y17.82%

Revenue Next 5Y13.52%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 115.73, the valuation of DSP can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of DSP is on the same level as its industry peers.
DSP's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 28.87.
DSP is valuated quite expensively with a Price/Forward Earnings ratio of 35.01.
Compared to the rest of the industry, the Price/Forward Earnings ratio of DSP is on the same level as its industry peers.
The average S&P500 Price/Forward Earnings ratio is at 25.96. DSP is valued slightly more expensive when compared to this.

		Industry Rank	Sector Rank
PE	115.73
Fwd PE	35.01

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, DSP is valued a bit cheaper than 69.78% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, DSP is valued a bit cheaper than 60.43% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	43.4
EV/EBITDA	27.44

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
DSP's earnings are expected to grow with 67.45% in the coming years. This may justify a more expensive valuation.