Wang & Lee Group board approves 250-to-1 reverse share split
On Monday, Needham analysts revised their price target for Lantronix , Inc. (NASDAQ: NASDAQ:LTRX), a global provider of secure data access and management solutions for the Internet of Things (IoT), to $4.50 from the previous $5.50 target. Despite the reduction, Needham has maintained a Buy rating on the company’s shares. According to InvestingPro data, the stock appears undervalued based on its Fair Value analysis, with analyst targets ranging from $4.00 to $8.00.
The adjustment follows Lantronix’s third fiscal quarter 2025 (F3Q25) earnings report, which presented a mixed outcome compared to consensus expectations. The company’s third-quarter revenue and earnings per share (EPS) fell short by 2% but were in line with projections, respectively. While current performance shows challenges with a -$0.22 EPS over the last twelve months, InvestingPro analysis indicates positive signs ahead, with analysts expecting profitability this year. A significant factor contributing to the underperformance was a decision by Gridspertise, a key customer, to halt procurement due to having excess inventory in comparison to the rate of deployments.
Additionally, Lantronix’s performance in the Europe, Middle East, and Africa (EMEA) region was notably weak, with a year-over-year decline of 67%. This weakness was likely influenced by production issues related to Togg EV. Looking ahead, the company’s fourth-quarter guidance indicates a cautious stance in light of the broader macroeconomic environment and ongoing challenges with key customers. Despite these challenges, the company maintains a strong financial position with a current ratio of 2.68 and more cash than debt on its balance sheet. Get deeper insights into Lantronix’s financial health and 12 additional exclusive ProTips with an InvestingPro subscription.
Lantronix’s management has signaled a strategic shift towards more aggressive product development in edge AI and compute applications, bolstered by some early successful engagements, referred to as "green-shoot wins." In light of these developments, Needham has revised its fiscal year 2025 and 2026 estimates for Lantronix.
The revised price target of $4.50 is set with anticipation of gaining a more definitive perspective on the company’s ability to achieve sustained top-line growth. Lantronix’s strategic pivot and the recent financial results underscore the company’s efforts to navigate through current market challenges while seeking new growth avenues.
In other recent news, Lantronix Inc. reported its Q3 FY2025 earnings, which showed a shortfall in both earnings per share (EPS) and revenue compared to analyst forecasts. The company posted an EPS of $0.03, missing the expected $0.08, and reported revenue of $28.5 million, falling short of the projected $34.09 million. Despite these results, Lantronix emphasized its strategic focus on edge AI solutions and reducing its manufacturing footprint in China. Positive operating cash flow of $3.2 million was reported for the quarter, along with a reduction in debt by $2 million, marking a 15% decrease. Analysts from Lake Street and ROTH Capital engaged with the company during the earnings call, highlighting the positive tracking of the NetComm acquisition and the company’s ongoing engagements. Lantronix provided guidance for Q4 FY2025 with expected revenue between $26.5 million and $30.5 million and an EPS range of $0.00 to $0.02. The company remains optimistic about double-digit growth in FY2026, driven by its initiatives in edge AI solutions and connectivity.
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