Daktronics (NASDAQ:DAKT) Shares Gap Up Following Strong Earnings

Daktronics, Inc. (NASDAQ:DAKT)’s share price gapped up before the market opened on Wednesday after the company announced better than expected quarterly earnings. The stock had previously closed at $19.36, but opened at $21.50. Daktronics shares last traded at $20.45, with a volume of 368,414 shares changing hands.

The technology company reported $0.40 EPS for the quarter, topping analysts’ consensus estimates of $0.35 by $0.05. The business had revenue of $234.57 million for the quarter, compared to analyst estimates of $230.27 million. Daktronics had a net margin of 5.41% and a return on equity of 17.62%. During the same period last year, the company posted $0.33 earnings per share.

Key Stories Impacting Daktronics

Here are the key news stories impacting Daktronics this week:

• Positive Sentiment: Fiscal Q1 diluted EPS rose 21.2% year over year to $0.40, beating the $0.35 consensus estimate and representing the company’s highest quarterly EPS in three years. Revenue increased 7.1% to $234.6 million, also topping expectations of $230.3 million despite one fewer reporting week. Daktronics Beats Q1 Earnings and Revenue Estimates
• Positive Sentiment: Operating income grew 7.2% to $24.9 million, net income increased to $19.4 million and gross margin improved to 30.5% from 29.7%. The company also generated $31.4 million in operating cash flow and ended the quarter with $154.6 million in cash against approximately $10.5 million of debt.
• Positive Sentiment: Management reported a product backlog of $311.3 million, keeping it above $300 million for the sixth consecutive quarter. It said several substantial orders were negotiated during Q1 but are expected to be recorded in Q2, potentially mitigating the reported decline in bookings. Daktronics Fiscal 2027 First Quarter Results
• Positive Sentiment: Daktronics repurchased $4.4 million of stock during the quarter under its $40 million authorization, signaling confidence in valuation and returning capital to shareholders. The company also launched updated share-repurchase and disclosure initiatives. Daktronics Share Repurchase and Disclosure Initiatives
• Neutral Sentiment: Sales growth was led by International, Transportation and Live Events, while Commercial and High School, Park and Recreation revenue declined. Analysts and financial commentary also continued to frame DAKT as a potential value stock, but these assessments do not represent new company guidance.
• Negative Sentiment: New orders fell 19.6% year over year to $191.8 million, and backlog declined from $360.3 million a year earlier to $311.3 million. Although management attributed some weakness to order timing, investors may view the figures as a risk to future revenue growth.
• Negative Sentiment: The operating margin remained flat at 10.6%, while operating expenses increased, including costs related to the XDC acquisition, microLED development, consulting and a large-project commission.

Wall Street Analyst Weigh In

A number of analysts have recently weighed in on the stock. Zacks Research upgraded shares of Daktronics from a “strong sell” rating to a “hold” rating in a report on Monday, June 15th. Roth Capital lifted their price target on Daktronics from $26.00 to $29.00 and gave the stock a “buy” rating in a research report on Thursday, July 2nd. Weiss Ratings raised shares of Daktronics from a “hold (c)” rating to a “hold (c+)” rating in a report on Thursday, June 25th. Finally, Wall Street Zen downgraded Daktronics from a “strong-buy” rating to a “buy” rating in a research note on Saturday, July 4th. One investment analyst has rated the stock with a Buy rating and two have assigned a Hold rating to the stock. According to data from MarketBeat.com, the company currently has a consensus rating of “Hold” and a consensus price target of $29.00.

Insider Activity

In other news, EVP Bradley T. Wiemann sold 4,000 shares of the company’s stock in a transaction on Friday, July 17th. The shares were sold at an average price of $19.22, for a total transaction of $76,880.00. Following the completion of the sale, the executive vice president owned 125,946 shares of the company’s stock, valued at $2,420,682.12. This represents a 3.08% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, insider Sheila Mae Anderson sold 3,636 shares of the business’s stock in a transaction that occurred on Wednesday, July 1st. The stock was sold at an average price of $20.01, for a total value of $72,756.36. Following the transaction, the insider owned 48,371 shares in the company, valued at approximately $967,903.71. This represents a 6.99% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders own 4.60% of the company’s stock.

Hedge Funds Weigh In On Daktronics

Several large investors have recently modified their holdings of DAKT. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC boosted its position in shares of Daktronics by 0.7% during the 4th quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 72,856 shares of the technology company’s stock worth $1,440,000 after purchasing an additional 519 shares during the period. Zurcher Kantonalbank Zurich Cantonalbank increased its position in shares of Daktronics by 7.1% in the 4th quarter. Zurcher Kantonalbank Zurich Cantonalbank now owns 10,601 shares of the technology company’s stock valued at $210,000 after purchasing an additional 707 shares during the last quarter. Royal Bank of Canada raised its stake in Daktronics by 12.7% in the fourth quarter. Royal Bank of Canada now owns 6,430 shares of the technology company’s stock valued at $127,000 after buying an additional 724 shares in the last quarter. Osaic Holdings Inc. raised its position in shares of Daktronics by 3.2% during the 2nd quarter. Osaic Holdings Inc. now owns 23,638 shares of the technology company’s stock worth $357,000 after acquiring an additional 728 shares in the last quarter. Finally, PNC Financial Services Group Inc. lifted its position in shares of Daktronics by 13.2% during the 1st quarter. PNC Financial Services Group Inc. now owns 7,712 shares of the technology company’s stock worth $151,000 after buying an additional 898 shares during the last quarter. Institutional investors and hedge funds own 61.69% of the company’s stock.

Daktronics Trading Up 5.9%

The stock has a market capitalization of $989.74 million, a PE ratio of 22.50, a PEG ratio of 0.64 and a beta of 1.68. The company has a quick ratio of 1.74, a current ratio of 2.31 and a debt-to-equity ratio of 0.18. The business’s 50-day moving average is $19.94 and its two-hundred day moving average is $20.71.

About Daktronics

Daktronics, Inc (NASDAQ: DAKT) is a leading designer and manufacturer of electronic display systems, video boards, scoreboards and related control systems. Founded in 1968 in Brookings, South Dakota by Al Kurtenbach and Duane Sander, the company has built a reputation for delivering custom visual display solutions to a wide range of markets. Its product portfolio includes large-format LED video displays, programmable message centers, digital billboards, and audio-visual solutions tailored to sports venues, transportation authorities, retail environments and live event producers.

The company’s primary business activities encompass the engineering, fabrication and installation of display systems for customers around the world.