DZS Secures $25M in Funding, Signs Agreement to Divest Asia Business
January 7, 2024
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DZS ($NASDAQ:DZSI) Inc., a leading provider of advanced communications and networking solutions, has recently secured $25M in funding and has officially agreed to divest its Asia business. The agreement was a major step forward in the company’s long-term growth strategy and will further expand opportunities in the communications industry. It designs, manufactures, and sells a wide array of products and services ranging from enterprise-level network and communication solutions to consumer-grade internet-of-things devices and services. The company’s portfolio includes various networking technologies such as Ethernet switches, routers, and IP/MPLS networks as well as a range of software applications for organizations. Through this divestment and infusion of capital, DZS Inc. will be able to focus its resources and strengthen its foothold in the global market.
It will also help the company better manage its operations in Asia and expand its reach into other markets. Furthermore, the additional funds will enable the company to continue developing innovative products and services that will benefit its customers worldwide. The agreement to divest its Asia business marks a significant milestone for DZS Inc., as it puts the company in a better position for sustained growth and success in the long term. The company is confident that this decision will result in a more profitable business model and ultimately position DZS Inc. as a leading player in the global communications space.
Stock Price
On Friday, DZS Inc. made major announcements regarding their financials. The company announced that they had secured $25 million in funding from private investors, and had signed an agreement to divest their Asia business. This news sent shockwaves through the market, with DZS Inc.’s stock opening at $1.6 and closing at $1.6, a 5.5% drop from the prior closing price of $1.6. This drop indicates that the investors were not optimistic about the company’s outlook, despite the new funding. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Dzs Inc. More…
| Total Revenues | Net Income | Net Margin |
| 389.46 | -51.52 | -11.8% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Dzs Inc. More…
| Operations | Investing | Financing |
| -55.17 | -25.68 | 71.4 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Dzs Inc. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 360.92 | 233.04 | 4.11 |
Key Ratios Snapshot
Some of the financial key ratios for Dzs Inc are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 11.6% | – | -11.3% |
| FCF Margin | ROE | ROA |
| -15.2% | -20.4% | -7.7% |
Analysis
GoodWhale has conducted an analysis of the financials of DZS INC. Our Star Chart shows that the company is strong in terms of growth and profitability, but weak in dividend. We have classified DZS INC as ‘cheetah’, which is a type of company that has achieved high revenue or earnings growth but is considered to be less stable due to lower profitability. For investors who are looking for higher return with higher risks, DZS INC may be a suitable choice. Despite its lower dividend, the company has an intermediate health score of 4/10, meaning it is likely to safely ride out any crisis without the risk of bankruptcy. More…
Peers
The competition in the telecommunications industry is fierce. DZS Inc. is up against some of the biggest names in the business, including Extreme Networks Inc., ADVA Optical Networking SE, and Ciena Corp. Each company is striving to provide the best products and services to their customers. While DZS Inc. has a strong presence in the market, its competitors are not far behind.
– Extreme Networks Inc ($NASDAQ:EXTR)
With a market cap of $2.5 billion and a return on equity of 40.12%, Extreme Networks is a publicly traded networking company that provides software-driven networking solutions to enterprise customers. The company delivers high-performance switching, routing, and security solutions that enable customers to build agile, data-driven networks that connect their people, applications, and devices.
– ADVA Optical Networking SE ($LTS:0NOL)
ADVA Optical Networking SE has a market cap of 1.08B as of 2022, a Return on Equity of 4.24%. The company provides optical and Ethernet-based networking solutions.
– Ciena Corp ($NYSE:CIEN)
Ciena is a network specialist that provides equipment, software and services that support mission-critical applications for communications service providers, enterprises and governments worldwide. Its products and services enable its customers to drive revenue, reduce expenses and improve efficiency by delivering high-capacity, high-speed networking solutions. Ciena’s common stock is listed on the NASDAQ Global Select Market under the symbol CIEN and is included in the S&P 500 index.
ROE is return on equity and is a measure of how well a company uses investment funds to generate profits. A company with a higher ROE is using funds more effectively to generate profits. Ciena’s ROE of 6.6% indicates that it is using funds efficiently to generate profits.
Ciena’s market cap is 6.64B as of 2022. This means that the market value of Ciena’s outstanding shares is 6.64B. Ciena’s market cap is a good indicator of the company’s size and its position in the market.
Summary
DZS Inc., a US-based technology company, has secured $25 million in funding and signed a definitive agreement to divest its Asia business. On the same day, the company’s stock price dropped. Investors have been taking a cautious approach to this news, as it is unclear how the new funding and divestment will affect the company’s future prospects.
Analysts are likely to be watching closely as more details emerge. In the meantime, cautious investors may want to wait and see how the company performs before making any investments.
