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1. Company Snapshot

1.a. Company Description

Daktronics, Inc.designs, manufactures, markets, and sells electronic display systems and related products worldwide.It operates through five segments: Commercial, Live Events, High School Park and Recreation, Transportation, and International.


The company offers video display systems, such as displays to show various levels of video, graphics, and animation; indoor and outdoor light emitting diodes (LED) video displays, including centerhung, landmark, ribbon board, and corporate office entrance displays, as well as video walls and hanging banners; mobile and modular display systems; architectural lighting and display products; indoor and outdoor scoreboards for various sports, digit displays, scoring and timing controllers, statistics software, and other related products; and timing systems for sports events primarily aquatics and track competitions, as well as swimming touchpads, race start systems, and relay take-off platforms.It also provides control components for video displays in live event applications; message displays; ITS dynamic message signs, including LED displays for road management; mass transit displays; and sound systems for indoor and outdoor sports venues.In addition, the company offers out-of-home advertising displays comprising digital billboards and street furniture displays; DataTime product line that consists of outdoor time and temperature displays; and Fuelight digit displays designed for the petroleum industry.


Further, it provides ADFLOW DMS systems that include indoor networked solutions for retailers, convenience stores, and other businesses; and Venus Control Suite, Show Control, Vanguard, and others, as well as maintenance and professional services related to its products.The company sells its products through direct sales and resellers.Daktronics, Inc.


was founded in 1968 and is headquartered in Brookings, South Dakota.

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1.b. Last Insights on DAKT

Daktronics' recent performance was driven by its solid growth attributes, including a strong Q1 earnings beat, with quarterly earnings of $0.33 per share, exceeding the Zacks Consensus Estimate of $0.24 per share. The company also secured major orders through multiple large stadium projects, contributing to its all-time high. Additionally, Daktronics' digital transformation and cost-saving initiatives are expected to drive margin expansion. The company's order growth was 17% in Q4, indicating a return to solid revenue growth. Its cash balance stood at $128 million, up 55% in operating cash flow.

1.c. Company Highlights

2. Daktronics Delivers Strong Finish to Fiscal Year 2025 with 17% Order Growth and Improved Margins

Daktronics reported a solid finish to its fiscal year 2025, with a 17% year-over-year increase in orders, driven by robust demand across its key segments. The company achieved $50 million in new orders in Q4, leading to a 15% sequential sales growth. Despite a slight decline in revenues, the strong order momentum resulted in a year-end backlog of $342 million, setting the stage for expected revenue growth in FY 2026. Adjusted operating income for the quarter was $6 million, supported by improved gross margins through value-based pricing and manufacturing efficiencies. Notably, the company reported an EPS of $0.18, in line with analyst estimates.

Publication Date: Jun -26

📋 Highlights
  • Strong Backlog Growth: 29% increase from Q3 and 17% year-over-year, driven by robust customer demand.
  • Fourth Quarter Performance: $50 million in new orders, 15% sequential sales growth, and 54.5% increase in operating cash flow for the year.
  • Commercial Segment Growth: 44% increase in Q4 orders, fueled by demand for out-of-home advertising and next-generation fuel price products.
  • International Orders Surge: 32% year-over-year growth, with significant contributions from Saudi Arabia, UAE, and Germany.
  • Cash Position and Efficiency: $128 million in cash, a 57% increase from the previous year, driven by reduced inventory and strong cash generation.

Segment Performance Highlights Diverse Growth Drivers

The Commercial business stood out with a 44% increase in Q4 orders, driven by strong demand for out-of-home advertising and next-generation fuel price products. The Transportation segment also saw a 14% rise in Q4 orders, with notable wins in intelligent transportation systems and airport projects. International orders grew 32% year-over-year, with significant contributions from markets in Saudi Arabia, UAE, and Germany. The High School Park and Recreation business achieved record orders, up 19% for the year and 33% in Q4, driven by strong adoption of video displays and recurring revenue from professional services.

Product Launches and Operational Improvements

Daktronics introduced several new products, including a next-generation digital billboard and outdoor video display systems, which simplify manufacturing and installation. Control system solutions like LiveSwitch and Venus Live were also launched, enhancing capabilities for live events and enabling recurring revenue through software solutions. The company made significant progress on its business and digital transformation initiatives, including price adjustments, improved inventory efficiency, and the launch of a modernized service software system.

Balance Sheet and Capital Allocation

The company strengthened its balance sheet by reducing inventory and increasing cash to $128 million, a 57% increase from the previous year. Share repurchases totaled $29 million, with an additional $10 million buyback announced. The company is addressing tariff uncertainties with strategic mitigation plans. Howard Atkins, the CFO, highlighted nonrecurring expenses totaling $16.5 million for the year, with $7.5 million incurred in Q4, including consulting costs, corporate governance expenses, and management transition costs.

Valuation and Outlook

With a P/E ratio of 378.81 and a P/S ratio of 0.89, the stock appears richly valued, though the strong backlog and growth momentum may justify the premium. The free cash flow yield of 9.34% and a net debt/EBITDA of -1.24 suggest a healthy balance sheet and cash generation capabilities. Analysts estimate 4.1% revenue growth for next year, with the company targeting operating margins of 10-12% and ROIC of 17-20% by FY 2028. The focus on executing transformation initiatives, adapting to tariffs, and capitalizing on growth opportunities positions Daktronics well for future success.</h6> <h6>Q&A and Future Outlook</h6> <p>In the Q&A session, management discussed revenue growth expectations for FY 2026, margin expansion strategies, and growth opportunities in the commercial segment, particularly in the AV integrator market. Howard Atkins noted that consulting fees related to business and digital transformation are now completed, with no further major engagements planned. The company remains focused on deploying capital in the highest-return ways, including growth initiatives and share repurchases. Early indications suggest brisk business in the first quarter, with international strength expected to continue.

3. NewsRoom

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Daktronics to Participate in the Craig-Hallum 16th Annual Alpha Select Conference on November 18th

Nov -11

Source: globenewswire.com

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Reviewing Landis+Gyr Group (OTCMKTS:LDGYY) & Daktronics (NASDAQ:DAKT)

Nov -04

Source: defenseworld.net

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DAKT vs. ROK: Which Stock Is the Better Value Option?

Oct -31

Source: zacks.com

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Best Value Stocks to Buy for Oct. 21

Oct -21

Source: zacks.com

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Daktronics: Valuation Remains Undemanding Amid Promising Prospects

Oct -19

Source: seekingalpha.com

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DAKT vs. ROK: Which Stock Should Value Investors Buy Now?

Oct -15

Source: zacks.com

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DAKT or ROK: Which Is the Better Value Stock Right Now?

Sep -29

Source: zacks.com

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Top 4 PEG-Rated GARP Picks Blending Value With Growth Potential

Sep -29

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.62%)

6. Segments

Live Events

Expected Growth: 5%

Daktronics' Live Events segment growth is driven by increasing demand for immersive fan experiences, rising adoption of digital signage in stadiums and arenas, and growing investments in sports venue renovations and new constructions. Additionally, the company's strategic partnerships and innovative product offerings, such as LED displays and audio systems, contribute to its growth momentum.

Commercial

Expected Growth: 4%

Daktronics' commercial segment growth is driven by increasing demand for digital signage and display solutions, expansion into new markets, and strategic partnerships. Additionally, the company's focus on product innovation, such as LED displays and software solutions, has contributed to its growth. Furthermore, the rising need for data visualization and analytics in various industries has also fueled the segment's growth.

High School Park and Recreation

Expected Growth: 3%

High School Park and Recreation from Daktronics, Inc. growth is driven by increasing demand for digital scoreboards, rising investments in school infrastructure, and growing popularity of outdoor recreational activities. Additionally, advancements in LED technology and government initiatives promoting sports and fitness contribute to the segment's 3% growth.

International

Expected Growth: 7%

Daktronics' international segment growth is driven by increasing demand for digital displays and scoreboards in emerging markets, particularly in Asia and Latin America. The company's expansion into new regions, strategic partnerships, and investments in product innovation are also contributing to its 7% growth.

Transportation

Expected Growth: 5%

Daktronics' transportation segment growth is driven by increasing demand for intelligent transportation systems, rising adoption of digital signage in airports and highways, and growing need for real-time traffic management solutions. Additionally, government initiatives for infrastructure development and smart city projects are fueling growth.

7. Detailed Products

Scoreboards

Electronic scoreboards and displays for various sports and events, providing real-time scores, statistics, and information to spectators.

Video Displays

High-resolution LED video displays for outdoor and indoor applications, offering vibrant visuals and engaging content.

Message Displays

Electronic message centers and signs for displaying text, graphics, and animations, suitable for various applications.

Sound Systems

Professional audio solutions for sports venues, public spaces, and live events, providing high-quality sound and audio processing.

Show Control Systems

Customizable control systems for managing and synchronizing audio, video, and lighting elements in live events and productions.

Digital Billboards

High-brightness LED displays for outdoor advertising, offering high-resolution graphics and real-time content updates.

Transportation Displays

Electronic displays for transportation hubs, providing real-time information and schedules to passengers.

8. Daktronics, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Daktronics, Inc. faces moderate threat from substitutes, as there are limited alternatives to its display and control systems. However, the company's focus on innovation and customer satisfaction helps to mitigate this threat.

Bargaining Power Of Customers

Daktronics, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's strong relationships with its customers and its ability to provide customized solutions further reduce the bargaining power of customers.

Bargaining Power Of Suppliers

Daktronics, Inc. relies on a few key suppliers for its components and materials. While the company has some bargaining power due to its size and reputation, it is still vulnerable to supplier disruptions and price increases.

Threat Of New Entrants

The display and control systems industry has high barriers to entry, including significant capital requirements and the need for specialized expertise. This makes it difficult for new entrants to compete with established players like Daktronics, Inc.

Intensity Of Rivalry

The display and control systems industry is highly competitive, with several established players competing for market share. Daktronics, Inc. must continually innovate and improve its products and services to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 9.06%
Debt Cost 3.95%
Equity Weight 90.94%
Equity Cost 9.41%
WACC 8.92%
Leverage 9.96%

11. Quality Control: Daktronics, Inc. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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LSI Industries

A-Score: 5.7/10

Value: 3.9

Growth: 6.3

Quality: 6.0

Yield: 3.0

Momentum: 9.5

Volatility: 5.7

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Bel Fuse

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Value: 4.6

Growth: 7.1

Quality: 6.2

Yield: 0.0

Momentum: 7.0

Volatility: 3.7

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CTS

A-Score: 4.4/10

Value: 4.7

Growth: 5.8

Quality: 7.0

Yield: 0.0

Momentum: 2.0

Volatility: 7.0

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Daktronics

A-Score: 4.2/10

Value: 3.7

Growth: 4.0

Quality: 5.8

Yield: 0.0

Momentum: 8.5

Volatility: 3.3

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Vishay Precision Group

A-Score: 4.0/10

Value: 4.5

Growth: 2.9

Quality: 4.6

Yield: 0.0

Momentum: 8.5

Volatility: 3.7

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SigmaTron International

A-Score: 3.2/10

Value: 9.3

Growth: 2.2

Quality: 2.5

Yield: 0.0

Momentum: 5.0

Volatility: 0.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

17.57$

Current Price

17.57$

Potential

-0.00%

Expected Cash-Flows