Dialight (DIA) AI Stock Analysis

• Market Cap: £137.64M
• Dividend Yield: N/A
• Average Volume (3M): 43.80K
• Price to Earnings (P/E): 24.7
• Beta (1Y): 0.81
• Revenue Growth: -5.73%
• EPS Growth: N/A
• Country: UK
• Employees: 948
• Sector: Industrials
• Sector Strength: 72
• Industry: Electrical Equipment & Parts
• EPS (TTM): 0.05
• Shares Outstanding: 40,205,456
• 10 Day Avg. Volume: 56,407
• 30 Day Avg. Volume: 43,802
• PEG Ratio: 0.06
• Price to Book (P/B): 1.31
• Price to Sales (P/S): 0.26
• P/FCF Ratio: -475.03
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 63 Neutral
• Price Target: 384.00p ▲(11.63% Upside)

Dialight's overall stock score of 63 reflects a mix of strong technical momentum and positive corporate events, offset by financial performance challenges. The company's strategic initiatives and internal improvements are promising, but profitability and cash flow issues need resolution. The technical analysis suggests bullish momentum, while corporate actions indicate confidence in future performance.

Positive Factors

Product & SKU Rationalization

An 83% SKU reduction materially simplifies manufacturing, inventory and demand planning. That structural change reduces complexity-driven costs, improves supply chain responsiveness and inventory turns, and sustainably supports margin expansion and service levels over ensuing quarters.

Improving Gross Margins

A sustained ~10 percentage-point gross margin uplift reflects a shift to higher-margin SKUs and improved pricing/efficiency. Higher baseline gross margins are a durable lever for profitability recovery, enabling better operating leverage and long-term return on assets if maintained across product mix.

Debt Reduction and Cash Generation

Material net-debt reduction and positive operating cash flow indicate improving balance-sheet resilience. Lower leverage increases strategic flexibility, reduces interest burden, and makes the target of eliminating bank debt feasible, supporting durable investment capacity and risk reduction over the next 2-6 months.

Negative Factors

Negative Free Cash Flow

Persistently negative free cash flow implies cash outflows exceed inflows, constraining the company's ability to fund growth, capex or accelerate debt paydown without external financing. Over months this limits strategic options and increases sensitivity to working-capital swings.

Profitability Shortfalls

Continued negative net profit and EBIT margins show operations have not converted revenue growth into sustainable profitability. Without deeper structural cost reduction or higher-margin sales mix, losses will erode equity and hinder achievement of targeted returns over the medium term.

Loss-making Traffic Segment

A segment that is loss-making at gross margin level drags consolidated performance and consumes working capital. If the traffic business remains structurally weak, management must restructure or exit it; otherwise it will impede margin recovery and absorb cash over multiple quarters.

Dialight Business Overview & Revenue Model

Company Description

Dialight plc, together with its subsidiaries, primarily develops, manufactures, and supplies LED lighting solutions for use in hazardous and industrial applications in North America, EMEA, and internationally. The company operates in two segments, Lighting, and Signals & Components. It offers high and low bays, and high outputs; conveyor, street, area, and flood lights; LED linear fixtures, such as low profile/top conduit linear, stainless steel linear, glass reinforced polyester linear, battery backup linear, and end-to-end linear; and wall packs/bulkheads products. The company also provides lighting products for control systems and obstruction solutions. In addition, it offers signals and components, such as panel mount and circuit board indicators; and traffic, vehicle, and rail products. The company serves mining, heavy industry, oil and gas, petrochemical, power generation, pulp and paper, food and beverage, and traffic and signal sectors. Dialight plc was founded in 1938 and is headquartered in London, the United Kingdom.

How the Company Makes Money

Dialight generates revenue primarily through the sale of its LED lighting products and solutions. The company has a diverse revenue model that includes direct sales to end-users, distribution partnerships, and long-term contracts with industrial clients. Key revenue streams include the sale of LED fixtures, replacement parts, and smart lighting management systems. Additionally, Dialight benefits from ongoing maintenance and service contracts, which provide recurring revenue. Strategic partnerships with distributors and industry leaders enhance its market reach, while government incentives for energy-efficient solutions further drive demand for its products.

Dialight Financial Statement Overview

Summary

Dialight exhibits strong revenue growth of 28.2%, but faces significant profitability and cash flow challenges. Negative net profit and EBIT margins, along with negative free cash flow, highlight operational inefficiencies and liquidity concerns. The balance sheet is stable, but improving return on equity and cash management is crucial.

Income Statement

Dialight's income statement shows mixed performance. The company has experienced significant revenue growth of 28.2% in the latest period, indicating strong sales momentum. However, profitability remains a concern with negative net profit and EBIT margins, reflecting operational challenges. The gross profit margin has improved to 36.2%, but the negative EBITDA margin highlights ongoing cost pressures.

Balance Sheet

The balance sheet presents a moderate financial position. The debt-to-equity ratio of 0.76 suggests manageable leverage, but the negative return on equity indicates inefficiencies in generating returns for shareholders. The equity ratio of 35.6% provides a stable capital structure, but the company needs to improve its profitability to enhance shareholder value.

Cash Flow

Cash flow analysis reveals challenges in cash generation. Operating cash flow is positive but low relative to net income, with a ratio of 0.17. Free cash flow is negative, indicating cash outflows exceeding inflows, which could strain liquidity. The negative free cash flow growth rate further underscores the need for improved cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	143.14M	183.50M	143.28M	169.70M	131.60M	119.00M
Gross Profit	47.49M	66.50M	42.86M	54.60M	47.00M	34.00M
EBITDA	3.01M	-3.00M	-9.49M	11.30M	10.80M	-800.00K
Net Income	-21.41M	-13.80M	-20.60M	400.00K	100.00K	-7.90M
Balance Sheet
Total Assets	99.55M	131.90M	111.26M	144.40M	125.60M	110.00M
Cash, Cash Equivalents and Short-Term Investments	5.53M	7.90M	9.11M	1.70M	1.20M	5.30M
Total Debt	24.91M	35.70M	30.11M	33.90M	28.90M	27.00M
Total Liabilities	65.37M	84.60M	60.62M	75.70M	65.40M	52.70M
Stockholders Equity	34.03M	36.30M	50.48M	68.50M	59.60M	56.90M
Cash Flow
Free Cash Flow	2.33M	-100.00K	3.30M	-3.20M	-1.60M	7.60M
Operating Cash Flow	5.27M	7.90M	4.18M	4.00M	4.00M	12.10M
Investing Cash Flow	-2.10M	-2.19M	-5.41M	-7.30M	-5.60M	-4.50M
Financing Cash Flow	2.81M	-6.82M	7.40M	2.20M	-2.20M	-2.00M

Dialight Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 344.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:DIA, the sentiment is Positive. The current price of 344 is above the 20-day moving average (MA) of 342.90, above the 50-day MA of 316.80, and above the 200-day MA of 210.56, indicating a bullish trend. The MACD of 10.11 indicates Positive momentum. The RSI at 53.82 is Neutral, neither overbought nor oversold. The STOCH value of 53.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:DIA.

Dialight Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VLX	75 Outperform	£801.15M	18.33	15.54%	1.11%	8.20%	25.85%
LUCE	69 Neutral	£200.36M	13.82	15.66%	3.92%	18.90%	-20.79%
TFW	64 Neutral	£310.63M	12.66	13.87%	2.58%	-0.33%	4.58%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
DIA	63 Neutral	£137.64M	24.69	15.77%	―	-5.73%	―
XPP	57 Neutral	£257.71M	-16.25	-8.12%	―	-18.43%	24.86%
LPA	45 Neutral	£4.82M	-21.73	-1.39%	―	-10.88%	-122.05%

Dialight Corporate Events

Dialight Lifts Profit Outlook as Transformation Plan Drives Margin and Cash Gains

Dialight reported further progress in its turnaround, with strong third-quarter profit delivery driven by ongoing margin improvement, lower overheads and higher cash generation, despite continued softness in demand across its end markets. The company now expects to exceed market expectations for adjusted operating profit for the year to 31 March 2026, has fully settled its $5.65m obligation to Sanmina ahead of schedule, and is targeting further debt reduction supported by improved profitability and a sharp cut in inventory levels; non-underlying costs have fallen significantly as the transformation plan takes effect, positioning the group for upgraded financial performance and continued operational improvements.

The most recent analyst rating on (GB:DIA) stock is a Hold with a £349.00 price target. To see the full list of analyst forecasts on Dialight stock, see the GB:DIA Stock Forecast page.

Dialight to Present Interim Results in Live Investor Session

Dialight plc announced that its CEO, Steve Blair, and CFO, Mark Fryer, will present the company’s unaudited interim results for the first half of 2025. This presentation, accessible to existing and potential shareholders via Investor Meet Company, underscores Dialight’s commitment to transparency and engagement with its investors, potentially impacting stakeholder confidence and market positioning.

The most recent analyst rating on (GB:DIA) stock is a Hold with a £255.00 price target. To see the full list of analyst forecasts on Dialight stock, see the GB:DIA Stock Forecast page.

Dialight Chair Increases Stake with Significant Share Purchase

Neil Johnson, Chair of Dialight plc, has purchased 14,360 ordinary shares of the company, increasing his total shareholding to 111,753 shares, which represents 0.278% of the company’s issued share capital. This transaction, conducted on the London Stock Exchange, reflects a significant investment by a key company leader, potentially signaling confidence in the company’s future performance and stability in the sustainable LED lighting market.

The most recent analyst rating on (GB:DIA) stock is a Hold with a £255.00 price target. To see the full list of analyst forecasts on Dialight stock, see the GB:DIA Stock Forecast page.

Dialight Reports Interim Results with Improved Margins Amid Market Challenges

Dialight plc reported its unaudited interim results for the six months ending September 30, 2025, showing a decline in group revenue due to challenging market conditions in its Lighting segment. However, the company achieved significant improvements in gross margin and operating profit, driven by its Transformation Plan. The Signals & Components segment saw a revenue increase, and the company reduced its net bank debt through strong cash generation. Dialight’s strategic focus on reinvigorating its Signals & Components business and transforming its sales operations is expected to drive future growth despite ongoing macroeconomic challenges.

The most recent analyst rating on (GB:DIA) stock is a Hold with a £255.00 price target. To see the full list of analyst forecasts on Dialight stock, see the GB:DIA Stock Forecast page.