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DSP Group (DSPG) Hits 52-Week High, Can the Run Continue?
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Shares of DSP Group have been strong performers lately, with the stock up 35.2% over the past month. The stock hit a new 52-week high of $16.97 in the previous session. DSP Group has gained 3.6% since the start of the year compared to the -9.7% move for the Zacks Computer and Technology sector and the -4.5% return for the Zacks Semiconductor - Communications industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 3, 2020, DSP Group reported EPS of $0.06 versus consensus estimate of $0.03 while it beat the consensus revenue estimate by 0.9%.
For the current fiscal year, DSP Group is expected to post earnings of $0.31 per share on $125 million in revenues. This represents a 6.9% change in EPS on a 6.28% change in revenues. For the next fiscal year, the company is expected to earn $0.46 per share on $133 million in revenues. This represents a year-over-year change of 48.39% and 6.4%, respectively.
Valuation Metrics
DSP Group may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
DSP Group has a Value Score of D. The stock's Growth and Momentum Scores are A and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 52.6X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 36.4X versus its peer group's average of 18.6X. Additionally, the stock has a PEG ratio of 3.51. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, DSP Group currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if DSP Group passes the test. Thus, it seems as though DSP Group shares could still be poised for more gains ahead.
How Does DSP Group Stack Up to the Competition?
Shares of DSP Group have been moving higher, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also solid potential picks, including NeoPhotonics , Spirent Communications (SPMYY - Free Report) , and Plantronics , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
The Zacks Industry Rank is in the top 4% of all the industries we have in our universe, so it looks like there are some nice tailwinds for DSP Group, even beyond its own solid fundamental situation.
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DSP Group (DSPG) Hits 52-Week High, Can the Run Continue?
Shares of DSP Group have been strong performers lately, with the stock up 35.2% over the past month. The stock hit a new 52-week high of $16.97 in the previous session. DSP Group has gained 3.6% since the start of the year compared to the -9.7% move for the Zacks Computer and Technology sector and the -4.5% return for the Zacks Semiconductor - Communications industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 3, 2020, DSP Group reported EPS of $0.06 versus consensus estimate of $0.03 while it beat the consensus revenue estimate by 0.9%.
For the current fiscal year, DSP Group is expected to post earnings of $0.31 per share on $125 million in revenues. This represents a 6.9% change in EPS on a 6.28% change in revenues. For the next fiscal year, the company is expected to earn $0.46 per share on $133 million in revenues. This represents a year-over-year change of 48.39% and 6.4%, respectively.
Valuation Metrics
DSP Group may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
DSP Group has a Value Score of D. The stock's Growth and Momentum Scores are A and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 52.6X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 36.4X versus its peer group's average of 18.6X. Additionally, the stock has a PEG ratio of 3.51. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, DSP Group currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if DSP Group passes the test. Thus, it seems as though DSP Group shares could still be poised for more gains ahead.
How Does DSP Group Stack Up to the Competition?
Shares of DSP Group have been moving higher, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also solid potential picks, including NeoPhotonics , Spirent Communications (SPMYY - Free Report) , and Plantronics , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
The Zacks Industry Rank is in the top 4% of all the industries we have in our universe, so it looks like there are some nice tailwinds for DSP Group, even beyond its own solid fundamental situation.