Richardson Electronics Ltd. Common Stock (RELL)

FairStock Score: 37/100 — MIXED

Key Financials

Strengths

• Conservative balance sheet with debt-to-equity of just 0.01, providing financial flexibility
• Altman Z-Score of 4.7 confirms minimal bankruptcy risk and strong solvency

Concerns

• Trades significantly above Graham Number ($8) with negative 71% margin of safety—limited downside protection

AI Analysis

Richardson Electronics Ltd. Common Stock is a micro-cap technology company valued at $203 million. The business generates $214 million in annual revenue with a 0.4% net margin. From a quality standpoint, Richardson shows solid Piotroski F-Score of 6/9 and healthy Altman Z-Score of 4.7. On valuation, the stock is commanding a steep 52.4x multiple, with trades above its Graham Number with a negative 71% margin. Growth dynamics show revenue growing at 3.1% and profit growth of 143.4%. The 1.7% dividend yield adds an income component for patient holders. Our composite FairStock Score of 37/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. Operational leverage in the business model means incremental revenue growth could disproportionately boost bottom-line profitability.

Bear Case

At 52x 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