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Richardson Electronics (RELL)
NASDAQ:RELL
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Richardson Electronics
(NASDAQ:RELL)
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Rating:66Neutral
Price Target:
$13.00
▲(12.46% Upside)
Richardson Electronics shows strong revenue growth and a solid balance sheet, which are significant strengths. However, the high P/E ratio suggests overvaluation, and profitability challenges persist. The earnings call provided a balanced view with notable growth in key segments, but also highlighted some operational challenges.
Richardson Electronics (RELL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$160.74M
Dividend Yield2.08%
Average Volume (3M)85.28K
Price to Earnings (P/E)520.8
Beta (1Y)0.51
Revenue Growth6.17%
EPS GrowthN/A
CountryUS
Employees407
SectorTechnology
Sector Strength88
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)0.13
Shares Outstanding12,443,851
10 Day Avg. Volume198,428
30 Day Avg. Volume85,281
Financial Highlights & Ratios
PEG Ratio0.04
Price to Book (P/B)0.70
Price to Sales (P/S)0.53
P/FCF Ratio14.22
Enterprise Value/Market Cap0.67
Enterprise Value/Revenue0.51
Enterprise Value/Gross Profit1.65
Enterprise Value/Ebitda53.50
Forecast
1Y Price Target
$11.50Price Target Upside-0.52% Downside
Rating ConsensusHold
Number of Analyst Covering2
Richardson Electronics Business Overview & Revenue Model
Company DescriptionRichardson Electronics, Ltd. engages in the power and microwave technologies, customized display solutions, and healthcare businesses in North America, the Asia Pacific, Europe, and Latin America. Its Power and Microwave Technologies Group segment provides engineered solutions, power grid and microwave tubes, and related consumables; technical services for microwave and industrial equipment; and power conversion and RF and microwave component for broadcast transmission, CO2 laser cutting, diagnostic imaging, dielectric and induction heating, high energy transfer, high voltage switching, plasma, power conversion, radar, and radiation oncology applications. The company's Canvys segment provides custom display solutions, such as touch screens, protective panels, all-in-one computers, custom enclosures, specialized cabinet finishes, application specific software packages, and certification services to corporate enterprise, financial, healthcare, industrial, and medical original equipment manufacturer markets. Its Healthcare segment manufactures and distributes diagnostic imaging replacement parts for CT and MRI systems; replacement CT and MRI tubes; MRI coils, cold heads, and RF amplifiers; hydrogen thyratrons, klystrons, and magnetrons; flat panel detector upgrades; pre-owned CT systems; and additional replacement solutions, as well as offers CT service training. It serves hospitals, medical centers, asset management companies, independent service organizations, and multi-vendor service providers. The company's products are used to control, switch, or amplify electrical power signals, as well as used as display devices in alternative energy, healthcare, aviation, communications, industrial, marine, medical, military, scientific, and semiconductor markets. The company was founded in 1947 and is headquartered in LaFox, Illinois.
How the Company Makes MoneyRichardson Electronics generates revenue through the sale of electronic components and engineered solutions. Key revenue streams include the distribution of specialty components, such as RF and microwave products, as well as power solutions tailored for various industries. The company also benefits from partnerships with manufacturers and technology providers, which allows it to offer unique products and services to its clients. Additionally, Richardson Electronics engages in providing logistics and supply chain management services, further enhancing its value proposition and contributing to its overall earnings.
Richardson Electronics Earnings Call Summary
Earnings Call Date:Oct 08, 2025
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jan 14, 2026
Earnings Call Sentiment Neutral
The earnings call presented a balanced view, with notable sales and segment growth in PMT and Canvas, improving operating income, and strategic partnerships in place. However, challenges such as the decline in GES sales, reduced Canvas margin, and supply chain issues in the RF tube business were highlighted.Q1-2026 Updates
Positive Updates
Overall Sales Growth
Total sales increased to $54.6 million, up from $53.7 million in Q1 of the previous year, marking a 1.6% increase. Excluding the Healthcare segment, net sales increased by 6.8%.
PMT Segment Growth
PMT sales, excluding Healthcare, grew by 10.5% year-over-year, driven by increased demand from semiconductor wafer fab customers and legacy power grid tube product lines.
Canvas Segment Performance
Canvas sales increased by 8.3%, benefiting from improved market conditions in Europe.
Positive Operating Cash Flow
The company generated positive operating cash flow for the sixth consecutive quarter, with a strong cash position of $35.7 million.
Wind Energy Segment Growth
Year-over-year growth in the wind segment was 86.1%, supported by new customers, global expansion, and new products.
Improved Gross Margin and Operating Income
Consolidated gross margin increased to 31% from 30.6% in 2025, while operating income rose to $1 million from $300,000 in the prior year's first quarter.
Strategic Initiatives and Partnerships
Key technology partners added, including Kiba, Goshen, and Wulong, to boost wind power management and energy storage capabilities.
Negative Updates
GES Segment Sales Decline
GES sales decreased by 10.2% year-over-year, primarily due to the nonrecurrence of a large EV locomotive order from the prior year.
Canvas Segment Margin Decline
Canvas's gross margin decreased to 30.9% from 34.3% in 2025, mainly due to product mix and higher inbound freight costs.
Healthcare Segment Impact
The sale of the Healthcare business in January 2025 impacted year-over-year comparisons, with retained CT tube business expected to turn positive later in 2026.
Inventory and Supply Chain Challenges
Issues with legacy RF tube business due to a supplier exiting the market, requiring strategic inventory management and sourcing decisions.
Company Guidance
During the Richardson Electronics earnings call for fiscal year 2026, the company reported a 1.6% increase in consolidated net sales, rising to $54.6 million from $53.7 million in the previous year's first quarter. Excluding the healthcare segment, which was sold in January 2025, net sales increased by 6.8%. The Power and Microwave Technologies (PMT) group saw a 10.5% rise in sales excluding healthcare, driven by increased demand from semiconductor wafer fab customers and legacy power grid tube products. Canvas sales rose by 8.3%, while the Green Energy Solutions (GES) unit experienced a 10.2% decline due to the nonrecurrence of a large EV locomotive order from the previous year. However, the core wind turbine business within GES grew by 86.1% year-over-year. The consolidated gross margin improved to 31% from 30.6%, with operating income rising to $1 million. The company generated positive operating cash flow for the sixth consecutive quarter, ending with a strong cash position of $35.7 million. Earnings per share were reported at $0.13, up from $0.04 in 2025, and EBITDA increased to $3.3 million from $1.7 million. The company maintained discipline over operating expenses, which improved as a percentage of net sales to 29.2%. Capital expenditures for the quarter reached $1 million, primarily aimed at manufacturing improvements and IT systems, with plans for $4 to $5 million in total CapEx for the year.Richardson Electronics Financial Statement Overview
Summary
Richardson Electronics displays a mixed financial performance. The income statement reveals operational inefficiencies and profitability issues, with declining revenue and negative margins. The balance sheet shows financial resilience with low leverage and strong equity backing. Cash flow analysis indicates improved cash generation, albeit with profitability concerns. Overall, the company demonstrates stability in its asset management but faces challenges in maintaining profitability and growth.Income Statement
The company has experienced fluctuations in revenue growth, with a decrease in recent years. The gross profit margin stands at approximately 31.0% for the latest year, indicating decent profitability, but the net profit margin has turned negative at -0.5%, pointing to challenges in cost management or operational issues. The negative EBIT and EBITDA margins in the latest year further highlight operational inefficiencies.65
Positive
Balance Sheet
The company's balance sheet is relatively strong, with a low debt-to-equity ratio of 0.015 and a healthy equity ratio of 80.0%, indicating financial stability. However, the return on equity has turned negative, reflecting recent profitability challenges. Overall, the balance sheet showcases strong equity backing with minimal leverage.75
Positive
Cash Flow
The company has shown improvements in operating cash flow, increasing to $10.55 million. The free cash flow growth is positive, but given the negative net income, the free cash flow to net income ratio is concerning. The operating cash flow to net income ratio is strong, suggesting efficient cash generation relative to earnings.70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2020 | Dec 2019 | Dec 2018 | Dec 2017 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 209.79M | 208.91M | 155.90M | 166.65M | 163.21M | 136.87M |
| Gross Profit | 65.30M | 64.80M | 49.67M | 51.73M | 55.08M | 43.88M |
| EBITDA | 2.02M | 5.21M | 1.73M | 2.75M | 6.35M | -3.32M |
| Net Income | 176.00K | -1.14M | -1.84M | -7.33M | 3.82M | -6.93M |
Balance Sheet | ||||||
| Total Assets | 200.07M | 195.84M | 150.72M | 153.02M | 166.33M | 157.46M |
| Cash, Cash Equivalents and Short-Term Investments | 35.65M | 35.90M | 46.53M | 50.02M | 60.47M | 61.76M |
| Total Debt | 2.03M | 2.28M | 3.43M | 0.00 | 0.00 | 0.00 |
| Total Liabilities | 40.70M | 39.18M | 32.06M | 29.26M | 31.15M | 25.14M |
| Stockholders Equity | 159.37M | 156.66M | 118.66M | 123.76M | 135.18M | 132.33M |
Cash Flow | ||||||
| Free Cash Flow | 8.60M | 7.74M | 147.00K | -6.44M | -2.29M | -3.41M |
| Operating Cash Flow | 11.51M | 10.55M | 1.92M | -2.56M | 2.95M | 1.81M |
| Investing Cash Flow | 3.92M | 4.02M | -9.78M | -11.87M | 4.15M | -3.79M |
| Financing Cash Flow | -3.27M | -3.25M | -3.21M | -2.82M | -2.95M | -3.00M |
Richardson Electronics Technical Analysis
Positive
11.56
Price Trends
9.92
Positive
9.71
Positive
10.60
Positive
Market Momentum
0.33
Negative
66.13
Neutral
51.14
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RELL, the sentiment is Positive. The current price of 11.56 is above the 20-day moving average (MA) of 10.20, above the 50-day MA of 9.92, and above the 200-day MA of 10.60, indicating a bullish trend. The MACD of 0.33 indicates Negative momentum. The RSI at 66.13 is Neutral, neither overbought nor oversold. The STOCH value of 51.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RELL.
Richardson Electronics Risk Analysis
Richardson Electronics disclosed 27 risk factors in its most recent earnings report. Richardson Electronics 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
Richardson Electronics Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $156.63M | 20.57 | 25.98% | ― | 16.52% | 50.29% | |
66 Neutral | $160.74M | 520.83 | 0.11% | 2.08% | 6.17% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $80.55M | ― | -11.74% | ― | 7.47% | -133.39% | |
53 Neutral | $240.18M | ― | -7.62% | 6.86% | -4.91% | 61.77% | |
51 Neutral | $100.27M | ― | -15.12% | ― | -7.12% | -11.00% | |
44 Neutral | $28.63M | ― | -14.45% | ― | -7.58% | -69.20% |
* Technology Sector Average
RELL
Richardson Electronics
11.56
-1.13
-8.90%
DAIO
Data I/O
3.05
0.56
22.49%
MEI
Methode Electronics
7.28
-3.07
-29.66%
CPSH
CPS Technologies
4.69
3.28
232.62%
LINK
Interlink Electronics
11.76
8.46
256.36%
MPTI
M-tron Industries Inc
54.16
4.91
9.97%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.