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Lantronix (LTRX)
NASDAQ:LTRX
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Lantronix
(NASDAQ:LTRX)
55Neutral
Positive Factors
Product Development
Management is placing key focus on edge AI/compute applications with several green-shoot wins.
Strategic Initiatives
Opex cuts and the asset acquisition of NetComm appear likely to sustain operating margin while new strategic design wins take hold.
Negative Factors
Financial Performance
Revenue declined as expected and was down 9% q/q and 16% y/y.
Lantronix (LTRX) vs. S&P 500 (SPY)
Market Cap
$102.40M
Dividend YieldN/A
Average Volume (3M)452.70K
Price to Earnings (P/E)―
Beta (1Y)0.14
Revenue Growth12.96%
EPS Growth48.58%
CountryUS
Employees373
SectorTechnology
Sector Strength45
IndustryHardware & Equipment
Share Statistics
EPS (TTM)-0.13
Shares Outstanding38,789,665
10 Day Avg. Volume395,191
30 Day Avg. Volume452,704
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.65
Price to Cash Flow (P/CF)75.00
P/FCF Ratio65.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$5.60Price Target Upside112.12% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Lantronix Business Overview & Revenue Model
Company DescriptionLantronix, Inc. (LTRX) is a global provider of secure turnkey solutions for the Internet of Things (IoT) and remote environment management (REM). The company specializes in software as a service (SaaS) and hardware solutions that enhance the capabilities of connected devices. Lantronix's core products include IoT connectivity solutions, remote management software, and embedded modules, which are utilized across various sectors including industrial, medical, transportation, retail, and government.
How the Company Makes MoneyLantronix generates revenue primarily through the sale of its hardware and software solutions. The company's key revenue streams include product sales, which comprise IoT connectivity hardware and embedded solutions, and service revenues from SaaS offerings for remote management. Lantronix also benefits from strategic partnerships with technology providers and OEMs (Original Equipment Manufacturers) which help expand its market reach. Additionally, custom solutions and value-added services contribute to its earnings by providing tailored offerings to specific industry needs. The company's focus on innovation and expanding its product portfolio further supports its revenue growth.
Lantronix Financial Statement Overview
Summary
Lantronix's financial performance is marked by solid revenue growth but ongoing profitability challenges. The company has a stable balance sheet with low leverage and improving cash flow management, but the persistent net losses and negative EBIT margins indicate operational inefficiencies.Income Statement
Lantronix shows stable revenue growth with a revenue increase from $129.7M in 2022 to $155.8M TTM. However, consistent net losses and negative EBIT margins indicate profitability challenges. Gross profit margins are reasonable, but negative EBIT and net profit margins highlight operating inefficiencies and cost control issues.55
Neutral
Balance Sheet
The balance sheet is stable with a strong equity base and a low debt-to-equity ratio of 0.039 TTM, showing prudent leverage management. However, return on equity is negative due to net losses, indicating inefficient use of shareholder funds.65
Positive
Cash Flow
Lantronix has improved its cash flow situation, with a positive operating cash flow of $10.1M TTM and positive free cash flow, indicating good cash management. The free cash flow to net income ratio is favorable, despite negative net income, demonstrating efficient cash conversion.70
Positive
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 155.84M | 160.33M | 131.19M | 129.66M | 71.48M | 59.88M | Gross Profit |
| 59.92M | 64.35M | 56.26M | 55.59M | 33.02M | 26.90M | EBIT |
| -2.94M | -2.86M | -6.67M | -2.17M | -643.00K | 1.72M | EBITDA |
| 2.22M | 4.62M | 792.00K | 896.00K | 377.00K | -1.85M | Net Income Common Stockholders |
| -4.91M | -4.52M | -8.98M | -5.36M | -4.04M | -10.74M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 19.21M | 26.24M | 13.45M | 17.22M | 9.74M | 7.69M | Total Assets |
| 134.22M | 136.21M | 151.62M | 137.37M | 72.57M | 67.93M | Total Debt |
| 3.06M | 26.55M | 18.96M | 15.95M | 3.68M | 5.15M | Net Debt |
| -16.15M | 314.00K | 5.51M | -1.28M | -6.06M | -2.54M | Total Liabilities |
| 56.31M | 54.85M | 74.07M | 57.48M | 26.47M | 21.41M | Stockholders Equity |
| 77.91M | 81.36M | 77.56M | 79.90M | 46.10M | 46.52M |
| Cash Flow | Free Cash Flow | ||||
| 9.61M | 17.14M | -2.44M | -11.53M | 3.52M | -3.09M | Operating Cash Flow |
| 10.14M | 18.62M | 237.00K | -9.42M | 4.30M | -2.52M | Investing Cash Flow |
| -6.99M | -1.48M | -7.32M | -25.75M | -783.00K | -13.97M | Financing Cash Flow |
| -6.08M | -4.36M | 3.32M | 42.65M | -1.47M | 5.90M |
Lantronix Technical Analysis
Negative
2.64
Price Trends
3.42
Negative
3.44
Negative
3.61
Negative
Market Momentum
-0.21
Negative
38.80
Neutral
43.76
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LTRX, the sentiment is Negative. The current price of 2.64 is below the 20-day moving average (MA) of 2.80, below the 50-day MA of 3.42, and below the 200-day MA of 3.61, indicating a bearish trend. The MACD of -0.21 indicates Negative momentum. The RSI at 38.80 is Neutral, neither overbought nor oversold. The STOCH value of 43.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LTRX.
Lantronix Risk Analysis
Lantronix disclosed 43 risk factors in its most recent earnings report. Lantronix reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Lantronix Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $4.67B | 19.94 | 17.70% | ― | 12.29% | 147.67% | |
72 Outperform | $3.19B | 31.60 | 15.40% | 1.85% | 5.05% | 632.38% | |
58 Neutral | $21.35B | 10.05 | -19.26% | 2.35% | 5.02% | -22.63% | |
55 Neutral | $678.81M | ― | -123.20% | ― | -19.70% | -70.40% | |
55 Neutral | $102.40M | ― | -6.35% | ― | 12.96% | 48.58% | |
48 Neutral | $101.57M | ― | -7.73% | ― | -14.33% | 29.34% | |
41 Neutral | $17.54M | ― | -112.88% | ― | -34.89% | -579.83% |
* Technology Sector Average
Performance Comparison
LTRX
Lantronix
2.64
-1.05
-28.46%
ADTN
Adtran
8.98
3.43
61.80%
IRDM
Iridium Communications
27.35
-0.89
-3.15%
ITRI
Itron
103.31
14.13
15.84%
KVHI
KVH Industries
5.17
0.57
12.39%
CMBM
Cambium Networks
0.65
-3.79
-85.36%
Lantronix Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -37.14% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive strategic moves and notable challenges. The successful acquisition of NetComm and strategic positioning in the edge AI market are promising, while revenue decline and challenges in certain segments pose concerns.Highlights
Successful NetComm Acquisition
Lantronix acquired NetComm for $6.5 million, expanding its Connect business with 4G and 5G gateways. Integration is progressing well, and new cross-selling opportunities are being explored.
Edge AI Market Growth
Lantronix is strategically positioning itself in the $76 billion edge AI market by 2031, focusing on compute and connect of edge. The company showcased its edge intelligence technology at CES, receiving positive feedback.
Strengthened Qualcomm Partnership
Lantronix is integrating Qualcomm's AI framework into its systems, strengthening its collaboration with Qualcomm. This includes developing AI solutions for banking, manufacturing, and agriculture.
Cost Reduction Initiatives on Track
Lantronix made significant progress in its cost reduction initiatives, expected to reduce fiscal 2025 OpEx by $4.5 million compared to fiscal 2024.
Lowlights
Revenue Decline
Revenue for FQ2 2025 was $31.2 million, down approximately $5.9 million or 16% year-over-year, primarily due to lower activity in out-of-band management and switch products.
Challenges with Smart Grid Rollout
Sequentially lower revenue is expected in FQ3 2025 due to a slower-than-anticipated rollout by a large smart grid customer in Europe.
Automotive Segment Weakness
The automotive segment experienced lower volume from its largest customer, contributing to sequential revenue decline.
Company Guidance
During the Fiscal Year 2025 Second Quarter Results Conference Call, Lantronix reported a revenue of $31.2 million for the second quarter, with a non-GAAP EPS of $0.04, both within the guidance range. The GAAP gross margin was 42.6%, while the non-GAAP gross margin was 43.2%. The company completed the strategic acquisition of NetComm for $6.5 million, which is expected to enhance their Connect business. The integration of NetComm is ongoing, with new opportunities identified in Australia and New Zealand. Cost-saving initiatives have progressed, significantly reducing operating expenses. For the third quarter, Lantronix anticipates revenue between $27 million and $31 million, with a non-GAAP EPS range of $0.01 to $0.05 per share. The company is positioning itself strategically to capitalize on the edge AI market, projecting significant growth opportunities, particularly with partnerships like Qualcomm. They expect these efforts to drive future growth in the company's key verticals: enterprise, smart cities, and transportation.Lantronix Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Lantronix Announces Leadership Change in Engineering
Neutral
Feb 13, 2025
On February 7, 2025, Lantronix, Inc. announced that Eric Bass will step down from his role as Vice President of Engineering and Research & Development. He will continue to work with the company in a non-officer capacity. This change suggests a shift in leadership within the company’s engineering and R&D departments and might impact its strategic direction in these areas.
Business Operations and StrategyFinancial Disclosures
Lantronix Reports Q2 Fiscal 2025 Earnings Results
Neutral
Feb 6, 2025
Lantronix reported its second-quarter fiscal 2025 results with a net revenue of $31.2 million, reflecting a GAAP EPS of ($0.06) and a non-GAAP EPS of $0.04. The company remains focused on advancing Edge AI solutions and integrating IoT assets from Netcomm, aiming for future growth in its key markets. The business outlook for the third fiscal quarter of 2025 anticipates revenue between $27.0 million and $31.0 million and non-GAAP EPS of $0.01 to $0.05 per share.
Executive/Board Changes
Lantronix Announces Board Changes Following Brace’s Departure
Neutral
Feb 5, 2025
On February 5, 2025, Lantronix Inc. announced the resignation of Philip Brace from its Board of Directors, as he will assume the role of CEO at Skyworks Solutions Inc. Brace, who joined Lantronix in August 2023, significantly contributed to the company’s governance and operations. As a result of his departure, Lantronix has appointed Kevin Palatnik as Chair of the Compensation Committee and Narbeh Derhacobian as a member of the Audit Committee. The board size has been reduced from five to four members.
Executive/Board ChangesBusiness Operations and Strategy
Lantronix Appoints Brent Stringham as CFO
Positive
Jan 10, 2025
Lantronix has appointed Brent Stringham as its Chief Financial Officer, effective January 6, 2025. Stringham, who has been with Lantronix since 2012, brings extensive financial expertise to his new role, having served as interim CFO and Chief Accounting Officer. The appointment is part of Lantronix’s strategic focus on Edge Intelligence in the IoT industry, aiming to enhance shareholder value through Stringham’s financial leadership.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.