Richardson Electronics (RELL) AI Stock Analysis

• Market Cap: $138.20M
• Dividend Yield: 3.08%
• Average Volume (3M): 60.65K
• Price to Earnings (P/E): 301.2
• Beta (1Y): 0.79
• Revenue Growth: -10.16%
• EPS Growth: -94.32%
• Country: US
• Employees: 407
• Sector: Technology
• Sector Strength: 40
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 0.03
• Shares Outstanding: 12,359,370
• 10 Day Avg. Volume: 71,118
• 30 Day Avg. Volume: 60,651
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.11
• Price to Cash Flow (P/CF): 7.90
• P/FCF Ratio: 7.90
• 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: $14.50
• Price Target Upside: 53.44% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

Richardson Electronics shows strong balance sheet stability and positive cash flow, which are significant strengths. However, challenges in profitability and a high P/E ratio indicate potential overvaluation, tempering its overall attractiveness. The strategic refocus towards higher-growth areas through recent corporate events is promising, but the technical indicators suggest caution in the near term due to bearish trends.

Richardson Electronics Business Overview & Revenue Model

Company Description

Richardson Electronics, Ltd. engages in the power and microwave technologies, customized display solutions, and healthcare businesses in North America, the Asia Pacific, Europe, and Latin America. Its Power and Microwave Technologies Group segment provides engineered solutions, power grid and microwave tubes, and related consumables; technical services for microwave and industrial equipment; and power conversion and RF and microwave component for broadcast transmission, CO2 laser cutting, diagnostic imaging, dielectric and induction heating, high energy transfer, high voltage switching, plasma, power conversion, radar, and radiation oncology applications. The company's Canvys segment provides custom display solutions, such as touch screens, protective panels, all-in-one computers, custom enclosures, specialized cabinet finishes, application specific software packages, and certification services to corporate enterprise, financial, healthcare, industrial, and medical original equipment manufacturer markets. Its Healthcare segment manufactures and distributes diagnostic imaging replacement parts for CT and MRI systems; replacement CT and MRI tubes; MRI coils, cold heads, and RF amplifiers; hydrogen thyratrons, klystrons, and magnetrons; flat panel detector upgrades; pre-owned CT systems; and additional replacement solutions, as well as offers CT service training. It serves hospitals, medical centers, asset management companies, independent service organizations, and multi-vendor service providers. The company's products are used to control, switch, or amplify electrical power signals, as well as used as display devices in alternative energy, healthcare, aviation, communications, industrial, marine, medical, military, scientific, and semiconductor markets. The company was founded in 1947 and is headquartered in LaFox, Illinois.

How the Company Makes Money

Richardson Electronics generates revenue through the sale of its diverse range of electronic components and engineered solutions across its key business units. The Power & Microwave Technologies Group focuses on providing power grid and microwave tubes, RF and microwave components, and other related products to clients in the industrial and communications sectors. The Canvys division specializes in custom display solutions, catering primarily to industrial and medical markets. Additionally, the Healthcare unit offers high-quality replacement parts and diagnostic imaging solutions to medical professionals and institutions. The company's revenue streams are bolstered by its ability to deliver customized solutions that meet specific client needs and its strategic partnerships with leading manufacturers in the electronics and healthcare industries.

Richardson Electronics Financial Statement Overview

Summary

Richardson Electronics demonstrates solid financial stability with a strong balance sheet and positive cash flow indicators. However, the company faces challenges in profitability as evidenced by declining net margins and return on equity. Continued focus on revenue growth and operational efficiency could bolster financial performance.

Income Statement

Richardson Electronics shows a stable gross profit margin of approximately 30% in the TTM, indicating efficient cost management. However, the net profit margin has significantly decreased, reflecting challenges in maintaining profitability. Revenue growth is positive when compared to the previous report, although it has not fully recovered to past highs. EBIT and EBITDA margins are low, suggesting potential operational inefficiencies.

Balance Sheet

The company maintains a strong equity position with a high equity ratio of around 80%, and a low debt-to-equity ratio, indicating financial stability. Return on equity has sharply declined, highlighting profitability challenges. The company's substantial equity base provides a cushion against liabilities.

Cash Flow

Operating cash flow has improved, and free cash flow is positive, indicating better cash management. The free cash flow to net income ratio is favorable, but growth in free cash flow is inconsistent, reflecting fluctuations in capital expenditures and operational efficiency. The cash flow from operations to net income ratio is robust, suggesting strong cash conversion.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
202.97M	196.46M	262.66M	224.62M	176.94M	155.90M
	Gross Profit
61.91M	59.97M	83.69M	71.70M	58.83M	49.67M
	EBIT
539.00K	348.00K	24.98M	15.96M	2.89M	-1.67M
	EBITDA
3.77M	4.72M	28.65M	19.40M	7.92M	1.73M
	Net Income Common Stockholders
470.00K	61.00K	22.33M	17.93M	1.66M	-1.84M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
33.03M	24.26M	24.98M	40.49M	43.32M	46.53M
	Total Assets
264.09M	192.44M	198.05M	179.82M	156.11M	150.72M
	Total Debt
18.00M	2.76M	2.46M	3.02M	2.42M	3.43M
	Net Debt
-15.03M	-21.50M	-22.52M	-32.47M	-40.89M	-27.11M
	Total Liabilities
112.71M	34.49M	38.73M	43.97M	34.55M	32.06M
	Stockholders Equity
151.38M	157.95M	159.32M	135.85M	121.56M	118.66M
Cash Flow		Free Cash Flow
7.76M	2.48M	-15.58M	-1.21M	-1.80M	147.00K
	Operating Cash Flow
10.59M	6.52M	-8.20M	1.91M	832.00K	1.92M
	Investing Cash Flow
-2.82M	-4.04M	-2.18M	-8.12M	13.37M	-9.78M
	Financing Cash Flow
-3.00M	-2.90M	389.00K	-352.00K	-3.01M	-3.21M

Richardson Electronics Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 9.45
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RELL, the sentiment is Negative. The current price of 9.45 is below the 20-day moving average (MA) of 11.67, below the 50-day MA of 12.52, and below the 200-day MA of 12.67, indicating a bearish trend. The MACD of -0.49 indicates Positive momentum. The RSI at 27.79 is Positive, neither overbought nor oversold. The STOCH value of 15.65 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RELL.

Richardson Electronics Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ADI	71 Outperform	$81.64B	52.49	4.43%	2.28%	-19.28%	-44.00%
CTS	67 Neutral	$1.08B	19.05	10.99%	0.44%	-6.36%	-0.89%
TTMI	61 Neutral	$1.81B	32.83	3.66%	―	9.41%	―
RELL	60 Neutral	$138.20M	301.24	0.30%	3.08%	-10.16%	-94.32%
Sector *	57 Neutral	$18.52B	9.81	-13.96%	2.71%	5.07%	-23.65%
AXTI	47 Neutral	$56.54M	―	-5.86%	―	31.09%	35.51%
LPTH	44 Neutral	$69.88M	―	-30.42%	―	-1.01%	-72.93%

Richardson Electronics Corporate Events

Richardson Electronics Sells Medical Unit to DirectMed

On January 24, 2025, Richardson Electronics announced the sale of its International Medical Equipment and Service business assets to DirectMed Imaging for $8.2 million. This strategic move aligns with Richardson’s priorities to support its growing Green Energy Solutions business and involves a 10-year supply agreement with DirectMed, simplifying Richardson’s operations and focusing on higher-growth markets.