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1. Company Snapshot

1.a. Company Description

Lantronix, Inc.provides software as a service (SaaS), engineering services, and hardware for edge computing, the Internet of Things (IoT), and remote environment management (REM) in the Americas, Europe, the Middle East, Africa, and the Asia Pacific Japan.The company's IoT products include IoT Connectivity, which provide wired and wireless connections that enhance the value and utility of modern electronic systems and equipment through secure network connectivity, power for IoT end devices through Power over Ethernet, application hosting, protocol conversion, media conversion, secure access for distributed IoT deployments, and various other functions; IoT Compute, such as application processing delivering compute to meet customer needs for data transformation, computer vision, machine learning, augmented/virtual reality, audio/video aggregation and distribution, and custom applications; and IoT Telematics, which provides power efficient products designed to support communications across interfaces and industrial protocols for vehicle, fleet, and asset tracking and management.


It also offers network switches, media converters, power over ethernet, NICS and optical SFPs, system on modules, single board computers, and development kits; and services for mechanical, hardware, and software engineering for camera, audio, and artificial intelligence/machine learning development, as well as xPrintServer.In addition, the company's REM products include out-of-band management, console management, power management, and IP connected keyboard-video-mouse products that offers remote access to IT and networking infrastructure deployed in test labs, data centers, branch offices, remote sites, and server rooms.Further, its SaaS platform enables customers to deploy, monitor, manage, and automate across their global deployments through a single platform login.


Lantronix, Inc.was founded in 1989 and is headquartered in Irvine, California.

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1.b. Last Insights on LTRX

Lantronix's recent performance has been hindered by ongoing issues in its IoT System Solutions and Software & Services segments. Despite its unique portfolio and innovation, the company continues to grapple with challenges in these areas. The recent 27% decline in stock value over the past month has raised concerns among investors.

1.c. Company Highlights

2. Lantronix's Q1 FY2026 Earnings: A Promising Start

Lantronix, Inc. reported its fiscal first quarter 2026 results, with revenue of $29.8 million and non-GAAP EPS of $0.04, both at the high end of its guidance range. Revenue grew 3% sequentially and 3% year-over-year, excluding Gridspertise. The company's non-GAAP EPS improved from $0.01 in Q4 to $0.04 in Q1, driven by gross margin expansion and operating leverage from cost optimization initiatives. The non-GAAP gross margin was 45.3% in the September quarter, a significant improvement from the low of around 40% last quarter.

Publication Date: Nov -24

📋 Highlights
  • Revenue & EPS Performance:: Q1 revenue reached $29.8 million, EPS hit $0.04, both at the high end of guidance, with 3% sequential and 3% YoY growth excluding Gridspertise.
  • Non-GAAP EPS Growth:: EPS rose from $0.01 to $0.04 driven by gross margin expansion and cost optimization, with margin at 45.3% in Q1.
  • Drone Business Expansion:: 17 OEM engagements secured, with potential to contribute 10–15% of revenue by FY2027, supported by 50,000-piece purchase orders.
  • New Product Launches:: Launched EdgeFabric.ai (Edge AI platform) and Kompress.ai (SaaS for industrial air compressors) with Vodafone IoT, targeting $27B market.
  • Financial Outlook:: Q2 revenue guidance $28–32M; gross margin to stay at 43–44%; $22.2M cash balance and $3.6M operating cash flow reported.

Growth Opportunities

The company's drone business is gaining traction, with 17 OEM engagements, and is expected to contribute 10% to 15% of revenue in the future, potentially as soon as fiscal year 2027. Lantronix also launched EdgeFabric.ai, a visual orchestration platform for Edge AI deployment, and partnered with Vodafone IoT to launch Kompress.ai, a subscription-based SaaS platform targeting the $27 billion global industrial air compressor market. Saleel Awsare indicated that revenue recognition for a specific opportunity is on track, with revenue recognized in the September quarter and expected to continue in the December quarter.

Financial Outlook

For Q2 2026, the company expects revenue of $28 million to $32 million and non-GAAP EPS of $0.02 to $0.04 per share. Gross margin is expected to remain healthy and consistent with the first half of fiscal 2025 levels, around 43-44%. The company generated positive operating cash flow of $3.6 million and ended the quarter with cash and cash equivalents of $22.2 million. For fiscal '26, Awsare mentioned that without Gridspertise, the company is growing close to 20% year-over-year.

Valuation

The current P/E Ratio is -17.36, indicating that the market is pricing in a challenging earnings environment. However, the P/S Ratio is 1.51, suggesting that the stock may be undervalued relative to its revenue. The EV/EBITDA ratio is -26.92, which is also negative due to the company's negative EBITDA. Analysts estimate next year's revenue growth at 2.9%, which is relatively modest. The actual EPS of $0.04 beat estimates of $0.03, indicating a positive surprise.

3. NewsRoom

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Lantronix Founder Bernhard Bruscha Donates 3.0 million shares of Lantronix Common Stock to TL Stiftung (TL Foundation)

Dec -04

Source: globenewswire.com

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3 Networking Stocks to Consider From a Thriving Industry

Nov -20

Source: zacks.com

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Lantronix CEO to Participate in Craig-Hallum, ROTH and Headgate Partners Investor Conferences

Nov -12

Source: globenewswire.com

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Lantronix, Inc. (LTRX) Q1 2026 Earnings Call Transcript

Nov -06

Source: seekingalpha.com

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Lantronix, Inc. (LTRX) Tops Q1 Earnings Estimates

Nov -06

Source: zacks.com

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Lantronix Reports Fiscal First Quarter 2026 Financial Results

Nov -05

Source: globenewswire.com

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Lantronix Edge AI Technology Powers Sightline's New AI-Driven Video Processor for Mission-Critical Drone Applications

Oct -28

Source: globenewswire.com

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Lantronix to Report Fiscal 2026 First Quarter Results on Nov. 5, 2025

Oct -22

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (13.69%)

6. Segments

Embedded Internet of Things Solutions

Expected Growth: 13.9%

Lantronix's 13.9% growth in Embedded Internet of Things (IoT) Solutions is driven by increasing demand for industrial automation, remote monitoring, and smart city infrastructure. Growing adoption of IoT devices in industries such as manufacturing, healthcare, and transportation, coupled with the need for secure and reliable connectivity, are key growth drivers.

Internet of Things Solutions

Expected Growth: 14.03%

Lantronix's 14.03% growth in IoT solutions is driven by increasing demand for industrial automation, remote monitoring, and smart city infrastructure. Growing adoption of IoT devices in industries such as manufacturing, healthcare, and transportation, coupled with the need for secure and efficient data management, are key growth catalysts.

Software and Services

Expected Growth: 10.43%

Lantronix's 10.43% growth in Software and Services is driven by increasing demand for IoT-enabled solutions, expansion into new markets, and strategic partnerships. The company's focus on edge computing, artificial intelligence, and cybersecurity also contributes to growth. Additionally, the rising need for remote monitoring and management of devices fuels demand for Lantronix's software and services.

7. Detailed Products

Console Servers

Lantronix's console servers provide secure, remote access to IT equipment, enabling IT professionals to manage and troubleshoot infrastructure from anywhere.

Device Servers

Lantronix's device servers enable network connectivity for serial devices, allowing users to access and manage devices remotely.

IoT Gateways

Lantronix's IoT gateways provide secure, reliable connectivity for IoT devices, enabling data collection, processing, and analysis.

Out-of-Band Management

Lantronix's out-of-band management solutions provide secure, remote access to IT equipment, enabling IT professionals to troubleshoot and manage infrastructure even when the network is down.

Switches

Lantronix's switches provide reliable, high-performance networking for industrial, medical, and other applications.

Software

Lantronix's software solutions provide remote access, management, and analytics for IoT devices and IT infrastructure.

8. Lantronix, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Lantronix, Inc. faces moderate threat from substitutes due to the presence of alternative products and services in the IoT and networking markets.

Bargaining Power Of Customers

Lantronix, Inc. has a diverse customer base, which reduces the bargaining power of individual customers, giving the company an upper hand in negotiations.

Bargaining Power Of Suppliers

Lantronix, Inc. relies on a few key suppliers for components and materials, giving them some bargaining power, but the company's size and reputation mitigate this risk.

Threat Of New Entrants

The IoT and networking markets are attractive to new entrants, and Lantronix, Inc. faces a high threat from new competitors that could disrupt the market with innovative products and services.

Intensity Of Rivalry

The IoT and networking markets are highly competitive, with many established players and new entrants vying for market share, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 19.65%
Debt Cost 7.18%
Equity Weight 80.35%
Equity Cost 14.22%
WACC 12.83%
Leverage 24.45%

11. Quality Control: Lantronix, Inc. passed 4 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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Franklin Wireless

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Value: 7.8

Growth: 3.8

Quality: 3.5

Yield: 0.0

Momentum: 6.5

Volatility: 5.3

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Lantronix

A-Score: 4.0/10

Value: 6.1

Growth: 4.9

Quality: 4.3

Yield: 0.0

Momentum: 6.5

Volatility: 2.0

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Growth: 3.7

Quality: 4.3

Yield: 0.0

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Value: 5.4

Growth: 4.1

Quality: 2.9

Yield: 0.0

Momentum: 5.0

Volatility: 5.0

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Value: 5.7

Growth: 5.7

Quality: 6.0

Yield: 0.0

Momentum: 3.0

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A-Score: 3.1/10

Value: 8.6

Growth: 2.3

Quality: 4.5

Yield: 0.0

Momentum: 0.0

Volatility: 3.0

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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

5.55$

Current Price

5.55$

Potential

-0.00%

Expected Cash-Flows