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On Friday, Lake Street Capital Markets revised its price target for Lantronix , Inc. (NASDAQ: NASDAQ:LTRX), reducing it to $5.00 from the previous $6.00, but retained a Buy rating on the company’s shares. Currently trading at $3.40, the stock appears undervalued according to InvestingPro analysis. The adjustment follows the projection of a more challenging transitional year for the company than initially anticipated, with 4 analysts recently revising their earnings expectations downward.
The firm’s analyst noted that fiscal year 2025 was expected to be a period of transition as Gridspertise shifted to a run-rate business model. With current revenue of $161.72 million and a healthy gross margin of 40.03%, the company maintains a strong financial foundation. Despite the tougher outlook, the analyst remains optimistic about Lantronix’s potential to resume growth in fiscal year 2026. This confidence is bolstered by the early positive response to the company’s edge AI products. Discover more insights about LTRX’s financial health and growth prospects with a InvestingPro subscription.
According to Lake Street, Lantronix is poised for a top line rebound, which, when combined with the full benefits from recent cost-cutting measures, is predicted to significantly enhance earnings per share (EPS) in the following year. The company’s strong liquidity position, evidenced by a current ratio of 2.61, provides financial flexibility during this transition period. The firm’s decision to maintain a Buy rating indicates a continued positive outlook on the stock’s future performance.
The analyst’s commentary highlighted the expected return to growth and the encouraging initial traction with Lantronix’s edge AI products. The firm anticipates that these factors will contribute to a meaningful increase in the company’s EPS power in the next fiscal year.
Lantronix, Inc. is involved in providing secure data access and management solutions for Internet of Things (IoT) assets. Its transition towards a run-rate business and the introduction of edge AI products are key elements of its strategy to navigate through the current fiscal year and beyond. The Lake Street analyst’s maintained Buy rating suggests a belief in the company’s strategic direction and its ability to overcome the present challenges.
In other recent news, Lantronix Inc., an IoT and connectivity solutions provider, reported its financial results for the second quarter of fiscal year 2025, missing both earnings per share (EPS) and revenue forecasts. The company reported a non-GAAP EPS of $0.04, falling short of analysts’ projection of $0.10. Revenue for the quarter was $31.2 million, below the expected $38.56 million. Notably, this marks a 16% decrease in revenue year-over-year.
Despite these setbacks, Lantronix remains committed to its strategic initiatives in edge computing and IoT. The company’s recent acquisition of NetComm IoT products and ongoing product development with Qualcomm (NASDAQ:QCOM) are part of these efforts. Lantronix has also completed substantial cost reduction initiatives, which could be a positive sign for investors.
Looking forward, Lantronix anticipates a 12% growth rate and expects gross margins to approach 45%. These projections suggest a focus on strategic growth despite current challenges. However, potential risks and challenges include a slower-than-
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