Daktronics Inc. Common Stock (DAKT)

FairStock Score: 64/100 — STEADY

Key Financials

Strengths

• Generates $55 million in annual free cash flow (5.9% yield on market cap)
• Conservative balance sheet with debt-to-equity of just 0.04, providing financial flexibility
• Revenue growth of 21.6% demonstrates strong top-line momentum

Concerns

• Trades significantly above Graham Number ($9) with negative 123% margin of safety—limited downside protection

AI Analysis

Daktronics Inc. Common Stock is a micro-cap technology company valued at $942 million. The business generates $803 million in annual revenue with a 0.4% net margin and $55 million in free cash flow. From a quality standpoint, Daktronics shows healthy Altman Z-Score of 3.5 and modest 10% ROE. On valuation, the stock is trading at a premium 35.3x earnings, with trades far above its Graham Number ($9) with no margin of safety. Growth dynamics show revenue growing at 21.6% and profit growth of 117.5%. Our composite FairStock Score of 64/100 reflects above-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Daktronics's 22% revenue growth trajectory could accelerate as it captures additional market share in the technology sector. With $55 million in annual free cash flow (5.9% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 35x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer