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Dr. Charlie Tian is the founder and CEO of GuruFocus.com, a leading global investment research platform established in 2004. With a Ph.D. in physics, Dr. Tian transitioned from science to finance, applying a data-driven, disciplined approach to value investing.
GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is rated on a scale of 1 to 10 and is based on these factors:
1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.
4. Other debt related ratios.
A higher score indicates a stronger financial position, with companies rated 7 or above considered financially stable and unlikely to face distress. Conversely, a score of 3 or below suggests potential financial difficulties, indicating a higher risk of distress.
Deswell Industries did not have earnings to cover the interest expense.
Deswell Industries's debt to revenue ratio for the quarter that ended in Mar. 2026 was 0.00.
As of today, Deswell Industries's Altman Z-Score is 3.42.
The rank is rated on a scale of 1 to 10. A higher score indicates a stronger financial position, with companies rated 7 or above considered financially stable and unlikely to face distress. Conversely, a score of 3 or below suggests potential financial difficulties, indicating a higher risk of distress.
Deswell Industries has the Financial Strength Rank of 10. It shows strong financial strength and is unlikely to fall into distressed situations.
Deswell Industries Financial Strength Related Terms
FRA:DW2 vs ELTK, FSTJ, DAIO: Financial Strength Comparison
For the Electronic Components subindustry, Deswell Industries's Financial Strength, along with its competitors' market caps and Financial Strength data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Deswell Industries Financial Strength vs Hardware Industry
For the Hardware industry and Technology sector, Deswell Industries's Financial Strength distribution charts can be found below:
* The bar in red indicates where Deswell Industries's Financial Strength falls into.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:
Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.
The zones of discrimination were as such:
When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.
Deswell Industries has a Z-score of 3.42, indicating it is in Safe Zones. This implies the Z-Score is strong.
Good Sign:
Altman Z-score of 3.42 is strong.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Deswell Industries (FRA:DW2) has a Financial Strength of 10 as of Mar. 2026. The financial strength rank measures the strength of a company's balance sheet based on revenue and debt. View historical data on Deswell Industries and its competitors. This is near median its historical median of 10.00. Over the past decade, Deswell Industries' Financial Strength has ranged from 7.00 to 10.00.
Is Deswell Industries' Financial Strength too high?
Deswell Industries' current Financial Strength of 10 is near median its 10-year median of 10.00. Over the past 10 years, this metric has ranged from a low of 7.00 to a high of 10.00. Overall, Deswell Industries has a GF Score™ of 64/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Deswell Industries' Financial Strength compare to ELTK and FSTJ?
Deswell Industries' Financial Strength of 10 can be compared against companies in the Hardware industry. Historically, Deswell Industries' own Financial Strength has ranged from 7.00 to 10.00 over the past decade. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Financial Strength for a Hardware company?
A good Financial Strength depends on the Hardware industry context. However, Financial Strength should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Financial Strength mean?
A high Financial Strength can signal that a stock is expensive relative to its fundamentals. The financial strength rank measures the strength of a company's balance sheet based on revenue and debt. View historical data on Deswell Industries and its competitors. Deswell Industries's current Financial Strength is 10, which is near median its own 10-year median of 10.00. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Deswell Industries stock overvalued right now?
Based on GuruFocus' analysis, Deswell Industries (FRA:DW2) is currently considered Significantly Overvalued. The stock's GF Value™ is €1.87, compared to a current price of €2.70 — trading 44.4% above its estimated fair value. The current Financial Strength is 10, which is near median its 10-year median of 10.00. Deswell Industries' overall GF Score™ is 64/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Financial Strength calculated?
Financial Strength is calculated from a company's financial statements. For Deswell Industries (FRA:DW2), the current Financial Strength is 10 as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Deswell Industries (FRA:DW2) Overvalued in 2026?
Based on GuruFocus' analysis, Deswell Industries stock appears to be overvalued.
The current stock price of €2.70 is trading 44.4% above its estimated GF Value™ of €1.87.
GuruFocus considers Deswell Industries to be Significantly Overvalued.
Key valuation signals for FRA:DW2:
Financial Strength: 10 (near median its 10-year median of 10.00)
GF Value™: €1.87 vs. price of €2.70 (44.4% above fair value)
No single metric tells the full story. See the FRA:DW2 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Deswell Industries Inc is engaged in the manufacturing and selling of injection-molded plastic parts and components. In addition, it also offers manufacturing services for electronic products and subassemblies and manufactures metallic molds and accessory parts for original equipment manufacturers and contract manufacturers. The company conducts all of its manufacturing activities at separate plastics, electronics and metallic operation factories located in the People's Republic of China. It operates through the Plastic Injection Molding and Electronic Products Assembling segments. The firm offers products such as automobile components, medical testing equipment, parts for audio equipment, av receivers, active subwoofers, digital system key sets, communication products and others.
64GF Score
Get the complete analysis for FRA:DW2
Financial Strength is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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