{"id":87158,"date":"2023-11-21T14:11:37","date_gmt":"2023-11-21T19:11:37","guid":{"rendered":"https:\/\/ifintechworld.com\/news\/csp-sees-positive-initial-client-response-to-azt-protect-software-nasdaqcspi\/"},"modified":"2023-11-21T14:11:40","modified_gmt":"2023-11-21T19:11:40","slug":"csp-sees-positive-initial-client-response-to-azt-protect-software-nasdaqcspi","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=87158","title":{"rendered":"CSP Sees Positive Initial Client Response To AZT Protect Software (NASDAQ:CSPI)"},"content":{"rendered":"
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A Quick Take On CSP Inc.<\/h2>\n

CSP Inc.<\/strong> (NASDAQ:CSPI<\/span>) provides a wide range of managed IT services, security software and related IT consulting services.<\/p>\n

The firm has produced profitable growth in recent quarters and has launched its ARIA security software product, which may drive growth in the period ahead.<\/span><\/p>\n

Investors with a risk-on perspective may wish to consider a Buy of CSPI at around $24.80 per share on the company’s growth prospects.<\/p>\n

CSPI Overview And Market<\/h2>\n

Lowell, Massachusetts-based CSP Inc. was founded in 1968 and operates in two segments, Technology Solutions and High Performance Products.<\/p>\n

The Technology Solutions segment provides a wide range of value-added reseller products and services, professional IT consulting services and managed IT services.<\/p>\n

The High Performance Products segment offers its ARIA Software-Defined Security solution, Myricom network adapters and products for digital signal processing applications in defense environments.<\/span><\/p>\n

The firm is headed by President and Chief Executive Officer Victor Dellovo, who has been with the firm since 2003 and, prior to that, was President of Technisource Hardware.<\/p>\n

CSP acquires customers through its direct sales and marketing efforts as well as through bidding processes.<\/p>\n

According to a 2023 market research report by Grand View Research, the global market for managed IT services was estimated at $267 billion in 2022 and is forecasted to reach $741 billion by 2030.<\/p>\n

This represents a forecast CAGR (Compound Annual Growth Rate) of 13.6% from 2023 to 2030.<\/p>\n

The main drivers for this expected growth are the difficulty in finding qualified persons to handle the increasing complexity in systems design and administration.<\/p>\n

Also, the chart below shows the historical and projected future growth prospects for the managed services market in the U.S.:<\/p>\n

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\"U.S. <\/picture>
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Grand View Research<\/span><\/p>\n<\/figcaption><\/figure>\n<\/p>\n

The firm also operates in software security and other hardware markets.<\/p>\n

CSPI\u2019s Recent Financial Trends<\/h2>\n

Total revenue by quarter (blue columns) has continued to grow, although unevenly; Operating income by quarter (red line) has remained positive in recent quarters:<\/p>\n

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\"Total <\/picture>
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Seeking Alpha<\/span><\/p>\n<\/figcaption><\/figure>\n<\/p>\n

Gross profit margin by quarter (green line) has fluctuated without a discernible trend; Selling and G&A expenses as a percentage of total revenue by quarter (amber line) have trended lower more recently, indicating increasing efficiency in this regard:<\/p>\n

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\"Gross <\/picture>
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Seeking Alpha<\/span><\/p>\n<\/figcaption><\/figure>\n<\/p>\n

Earnings per share (Diluted) have turned sharply higher in the most recent quarter:<\/p>\n

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\"Earnings <\/picture>
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Seeking Alpha<\/span><\/p>\n<\/figcaption><\/figure>\n<\/p>\n

(All data in the above charts is GAAP.)<\/p>\n

In the past 12 months, CSPI\u2019s stock price has risen 214.92% vs. that of the iShares Expanded Technology-Software ETF\u2019s (IGV) gain of 46.76%:<\/p>\n

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\"52-Week<\/span>
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Seeking Alpha<\/span><\/p>\n<\/figcaption><\/figure>\n<\/p>\n

For balance sheet results, the firm ended the quarter with $16.2 million in cash and equivalents and $1.7 million in total debt, all of which was categorized as short-term.<\/p>\n

Over the trailing twelve months, free cash used was ($2.7 million), during which capital expenditures were $0.2 million. The company paid $1.1 million in stock-based compensation in the last four quarters.<\/p>\n

Valuation And Other Metrics For CSPI<\/h2>\n

Below is a table of relevant capitalization and valuation figures for the company:<\/p>\n

<\/span><\/p>\n\n\n\n<\/colgroup>\n\n\n\n\n\n\n\n\n\n\n\n\n\n
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Measure (Trailing Twelve Months)<\/strong><\/p>\n<\/td>\n

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Amount<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

Enterprise Value \/ Sales<\/p>\n<\/td>\n

\n

1.5<\/p>\n<\/td>\n<\/tr>\n

\n

Enterprise Value \/ EBITDA<\/p>\n<\/td>\n

\n

34.3<\/p>\n<\/td>\n<\/tr>\n

\n

Price \/ Sales<\/p>\n<\/td>\n

\n

1.6<\/p>\n<\/td>\n<\/tr>\n

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Revenue Growth Rate<\/p>\n<\/td>\n

\n

38.4%<\/p>\n<\/td>\n<\/tr>\n

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Net Income Margin<\/p>\n<\/td>\n

\n

7.9%<\/p>\n<\/td>\n<\/tr>\n

\n

EBITDA %<\/p>\n<\/td>\n

\n

4.4%<\/p>\n<\/td>\n<\/tr>\n

\n

Market Capitalization<\/p>\n<\/td>\n

\n

$113,460,000<\/p>\n<\/td>\n<\/tr>\n

\n

Enterprise Value<\/p>\n<\/td>\n

\n

$99,610,000<\/p>\n<\/td>\n<\/tr>\n

\n

Operating Cash Flow<\/p>\n<\/td>\n

\n

-$2,490,000<\/p>\n<\/td>\n<\/tr>\n

\n

Earnings Per Share (Fully Diluted)<\/p>\n<\/td>\n

\n

$1.11<\/p>\n<\/td>\n<\/tr>\n

\n

Free Cash Flow Per Share<\/p>\n<\/td>\n

\n

-$0.64<\/p>\n<\/td>\n<\/tr>\n

\n

R&D \/ Revenue<\/p>\n<\/td>\n

\n

5.0%<\/p>\n<\/td>\n<\/tr>\n<\/table>\n

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