The Market Expects Relatively Little From DSP Group's Transformation

DSP Group (DSPG) is trying to do a difficult thing in the chip space and basically reinvent itself with new applications for its core competencies in voice integration and low-power functionality. Somewhat unusually for the chip group, it’s not staking its turnaround/reinvention on a sizable M&A transaction, and is instead trying to reinvest the earnings it still generates from its fading lead business in DECT/CAT-iq SoCs for cordless phones.

In targeting markets like home gateways, low-power IoT connectivity, enterprise VoIP, and voice user interface SoCs, I believe the company is making logical decisions about where it can apply its core technologies and generate better growth in the coming years. There are admittedly not really any blockbusters here, but likely enough to generate decent revenue growth and margins in the coming years. For now, though, the Street isn’t buying it, as the shares seem to trade in line with some rather lackluster expectations.

Click here for more:
The Market Expects Relatively Little From DSP Group's Transformation