Marvelous Microcaps

Decisionpoint Systems, Inc (DPSI)


At Perritt Capital Management, we take focused positions in companies where we have a high conviction in their success; companies that are out of the mainstream of small cap investing. To highlight our process, we are pleased to present the newest installment in our ongoing series “Marvelous Microcaps – Big Ideas on Small Companies.”  This series profiles companies that we believe have a niche in their existing markets or are launching a product that could disrupt their marketplace.


Decisionpoint Systems, Inc. (DPSI) is a provider of enterprise level technology solutions primarily to the logistics, distribution & warehousing industries. The company’s core focus is offering mobility solutions for customer needs in moving & tracking both products and assets. They offer hardware solutions including full mobile computing solutions, data capture equipment, barcode and RFID scanners along with a full suite of service and support functions to engage customers and meet their needs throughout product life cycles. They offer asset tracking applications for customers to monitor their assets, inventory control applications for warehousing and distribution and reverse lifecycle/end of life product disposal support. Their emphasis on service as a key component of their business plan. By engaging with customers as their ongoing support specialists and having their software installed in system critical functions within their customer’s operations, Decisionpoint is able to earn higher margins on revenues throughout the lifecycle for their products. These sticky relationships also help them retain customers due to the high level of integration they strive for with their customer relationships.

Decisionpoint is led by CEO Steve Smith, who joined the firm in 2018 when the company was generating $35 million a year in revenue and was modestly profitable with EBITDA of $1.2 million. Steve and his team have since grown the company by almost 4x in revenue and will exit 2023 with revenues of around $112 million. Profitability has grown even more, with project EBITDA to be around $9.1 mil for 2023, an increase of 7.5x from when Steve joined the company.

Decisionpoint is a growth stage company and as such is acquisitive. Under their current management regime, the company has completed three acquisitions with the most recent one being in April of 2023. These acquisitions have helped build out the product and service offerings that Decisionpoint brings to their customers, and it is expected that these types of transactions will continue at the pace of 1-2 a year depending on the size.


We first found Decisionpoint through our internal screening process in the fall of 2021 and were interested in their growth profile. While their revenue growth was impressive over the course of 2018-2020, where they grew revenues by 80% from $35mil to $63.3, even more impressive was their improvement in EBITDA, which quadrupled to $4.9mil from $1.1mil during that same time period. We believed that this demonstrated significant leverage in their business model. At this time, the stock was not well known by the investing public and was trading at a solid base of around $4.00 per share without much reaction to their recent results. To emphasize the unknown nature of the company, we were one of the first institutional investors to reach out to the company. We spoke with management and they confirmed our thesis that there was continued leverage to be unlocked in their business model and began to take a position.

Since then, the company has met most of our expectations. Revenue has grown to over $100 mil with the company recently guiding for $111-113 mil in revenue for 2023 and EBITDA of $8.9-9.2mil. They have completed a successful acquisition and are using their cashflow to pay down the related debt while making necessary investments in their own business. We believe that much of the leverage is obscured by their continued spend in the business and will materialize over the next couple of years as they continue to grow the topline. In their last quarterly earnings report from Q3 of 2023, they reported that software and service revenue was a record 45% of total revenue. This revenue comes with higher margins and we contend that this is a prelude to higher bottom line margin expansion in the future relative to top line.

We believe that Decisionpoint is selling the necessary tools and support services to an area of the economy that is experiencing a secular growth trend in e-commerce as it relates to distribution and logistics. Their ongoing investment in their business both internally and through acquisitions should allow for continued topline growth while their high level of integration with their customers and ongoing service commitments should help retain current business and enable the company to capture revenue from the full customer lifecycle.

Data here is obtained from what are considered reliable sources.  We consider the data used to be relevant and reliable.

Fund holdings and sector allocations are subject to change at any time and should not be considered a recommendation to buy or sell any security. Please click PRCGX and PREOX for a list of the top ten holdings.


EBITDA – earnings before interest, taxes, depreciation, and amortization (used as an indicator of the overall profitability of a business.


Before you invest in the Perritt MicroCap Opportunities Fund or Perritt Ultra MicroCap Fund, please refer to the prospectus for important information about the investment company, including investment objectives, risks, charges, and expenses. You may also obtain a hard copy of the  prospectus by calling 800-331-8936. The prospectus should be read carefully before you invest.


Mutual fund investing involves risk. Principal loss is possible. The Funds invest in smaller companies, which involve additional risks, such as limited liquidity and greater volatility. The Funds invest in microcap companies which tend to perform poorly during times of economic stress. The Ultra MicroCap Fund may invest in early-stage companies which tend to be more volatile and more speculative than investments in more established companies. 

Past Performance does not guarantee future results.


The Perritt Funds are distributed by Quasar Distributors, LLC.


First published January 2024.

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