Daktronics Earnings On Deck – (DAKT) Stock Having A Year of Two Halves

Daktronics' stock (NASDAQ: DAKT) has taken holders on a journey this year, having fallen more than 30% through the first quarter, only to recapture those losses, and then some, in returning to a 4.3% YTD gain.

The company, a leading manufacturer of electronic scoreboards, LED video displays, and related products, is scheduled to report earnings this morning, which could significantly influence its near-term trajectory.

Analysts expect a mixed quarter, projecting EPS of $0.21 (down from $0.36 last year) and revenue of $196.9 million, representing a significant 12.91% year-over-year decline in sales, indicating continued headwinds for the digital display company.

The Q4 fiscal 2025 earnings report, released on June 25th, revealed a loss of $0.19 per share, falling short of analyst expectations of a $0.15 profit. Revenue also disappointed, coming in at $172.6 million compared to the anticipated $193.97 million. This news triggered a significant 16.12% drop in the stock price in pre-market trading. The operating income margin decreased to 6.6% from 10.6% year-over-year.

Daktronics has set ambitious targets for a 7-10% compound annual growth rate by fiscal year 2028, aiming for 10-12% operating margins and a 17-20% return on invested capital. The company anticipates revenue growth in fiscal year 2026.

On the institutional front, Vanguard Group Inc. recently increased its stake in Daktronics, demonstrating confidence in the company's future prospects.

Daktronics operates in a highly competitive market, and its success depends on its ability to innovate and maintain its technological edge. The company's ambitious growth targets may be difficult to achieve, especially given the inconsistent earnings performance in recent quarters.

Furthermore, the reliance on large, high-value projects can create volatility in revenue and earnings. If Daktronics fails to secure key projects or experiences delays in project execution, it could face significant financial setbacks.

Daktronics is currently navigating a complex landscape, with both opportunities and challenges ahead. Daktronics needs to demonstrate consistent execution and profitability to justify the current valuation.