Daktronics Inc. (DAKT)

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Daktronics: Things aren’t so bad (NASDAQ:DAKT)

By Joe Duerr on February 27, 2015 Systems & Software Value Analysis

Daktronics, Inc. (NASDAQ:DAKT) has taken a pummeling in recent days after reporting their Q3 earnings at 1 cent per share. With revenue slightly up on the same quarter the year before, and earnings being 1 cent verses 7 cents the prior quarter, the issues appear to be more cost related than anything. As such actual sales growth is not a major issue and perhaps their is still value in this stock after all at these new lows. [Trend Analysis]

Daktronics, Inc. (NASDAQ:DAKT) last traded at $10.24 after moving down -6.99% for the trading day.

DAKT is trading with a trailing 12 month P/E multiple of 21.33 and an estimated forward P/E multiple of 12.60. The stock has an estimated 5 year annual growth of 19.93% and a PEG multiple of 1.07.

From a value investor perspective, as mentioned Daktronics, Inc. trades on an estimated forward P/E multiple of 12.60. The current estimated forward P/E ratio for the market as a whole is approximately 19.82. Therefore, for value investors DAKT appears to be underpriced.

For growth investors, who are more interested in growth into the longer term for the stock, we look at the PEG multiple (P/E to growth) of Daktronics, Inc. (NASDAQ:DAKT). This PEG multiple takes into account the expected long term growth in earnings of Daktronics, Inc. rather than merely the growth for one full earnings period ahead.

As a rule of thumb, growth investors often believe a stock with a PEG of between 0 and 1 is considered to be underpriced, between 1 and 2 to be at fair value and over 2 to be overpriced. Based on the PEG ratio of DAKT being 1.07, we consider Daktronics, Inc. to likely be priced at fair value.
The mean analyst 12 month target price for Daktronics, Inc. (NASDAQ:DAKT) is currently $15.00 or 46.48% above the current price.

Additionally, the stock has been as high as $14.90 and as low as $10.17 in the last 52 weeks. Analysts are estimating that DAKT will report earnings per share of $0.22 next quarter.
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http://www.stockmarketsdaily.com/daktronics-inc-underpriced-nasdaqdakt/10666/

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