U.S. markets close in 3 hours 28 minutes
  • S&P 500

    3,945.79
    -53.05 (-1.33%)
     
  • Dow 30

    33,614.50
    -332.60 (-0.98%)
     
  • Nasdaq

    11,047.96
    -191.98 (-1.71%)
     
  • Russell 2000

    1,815.69
    -24.53 (-1.33%)
     
  • Crude Oil

    74.53
    -2.40 (-3.12%)
     
  • Gold

    1,784.00
    +2.70 (+0.15%)
     
  • Silver

    22.36
    -0.05 (-0.23%)
     
  • EUR/USD

    1.0490
    -0.0008 (-0.07%)
     
  • 10-Yr Bond

    3.5610
    -0.0380 (-1.06%)
     
  • GBP/USD

    1.2188
    -0.0006 (-0.05%)
     
  • USD/JPY

    136.7660
    +0.0810 (+0.06%)
     
  • BTC-USD

    16,985.56
    -110.11 (-0.64%)
     
  • CMC Crypto 200

    400.33
    -1.47 (-0.37%)
     
  • FTSE 100

    7,521.39
    -46.15 (-0.61%)
     
  • Nikkei 225

    27,885.87
    +65.47 (+0.24%)
     

Market Sentiment Around Loss-Making DZS Inc. (NASDAQ:DZSI)

We feel now is a pretty good time to analyse DZS Inc.'s (NASDAQ:DZSI) business as it appears the company may be on the cusp of a considerable accomplishment. DZS Inc. provides broadband network access solutions and communications platforms in the Americas, Europe, the Middle East, Africa, and Asia. The US$319m market-cap company’s loss lessened since it announced a US$35m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$17m, as it approaches breakeven. As path to profitability is the topic on DZS' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for DZS

DZS is bordering on breakeven, according to the 5 American Communications analysts. They expect the company to post a final loss in 2022, before turning a profit of US$18m in 2023. The company is therefore projected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 165% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

Underlying developments driving DZS' growth isn’t the focus of this broad overview, though, bear in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 20% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of DZS which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at DZS, take a look at DZS' company page on Simply Wall St. We've also put together a list of key aspects you should further examine:

  1. Valuation: What is DZS worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether DZS is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on DZS’s board and the CEO’s background.

  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here