Breaking Down Lantronix, Inc. (LTRX) Financial Health: Key Insights for Investors

As an investor, are you keeping a close watch on Lantronix Inc.'s (LTRX) financial health? While the stock currently trades around $3.40, some analysts suggest it might be undervalued, but is it really? Recent data shows that Lantronix has total assets of $134.22 million and total liabilities of $56.31 million. Moreover, the company's Q2 fiscal year 2025 net revenue reached $31.2 million, with a GAAP EPS of ($0.06). But with a shifting business model and evolving market conditions, can Lantronix maintain its strong financial foundation, which includes a healthy gross margin of 40.03%? Let’s delve deeper into the numbers and insights that will help you make an informed decision.

Lantronix, Inc. (LTRX) Revenue Analysis

Lantronix, Inc. (LTRX) generates revenue primarily through network infrastructure and connectivity solutions. These solutions cater to various sectors, including industrial, medical, security, and transportation. A detailed breakdown reveals how these areas contribute to the company's financial performance.

Analyzing Lantronix, Inc.'s (LTRX) revenue streams involves examining the performance of its key business segments. Here’s a breakdown:

• IoT Connectivity Solutions: Focuses on providing solutions that enable secure connections, data delivery, and management of IoT devices.
• Out-of-Band Management (OOBM): Offers remote management and monitoring of IT infrastructure.
• Software and Services: Includes value-added services and software solutions that complement the hardware offerings.

Year-over-year revenue growth is a critical indicator of Lantronix, Inc.'s (LTRX) financial trajectory. Monitoring the percentage increase or decrease in revenue helps investors gauge the company's ability to expand its market presence and capitalize on emerging opportunities. According to the fiscal year 2024 data, the revenue landscape is as follows:

Lantronix, Inc. (LTRX) reported total net revenue of $144.6 million for fiscal year 2024, which increased by 10.8% compared to $130.5 million in fiscal year 2023. The gross profit was $61.7 million, an increase of 12.2% from $55.0 million in the previous year. These figures highlight a positive trend in the company's financial performance.

A closer look at the revenue contribution from different business segments provides valuable insights into Lantronix, Inc.'s (LTRX) operational strengths and areas for improvement. Understanding which segments are driving growth and which are facing challenges is essential for a comprehensive financial analysis. The revenue is broken down by:

• IoT Connectivity Solutions: $128.1 million in revenue, up 12.8% year-over-year
• Out-of-Band Management (OOBM): $16.5 million in revenue, down 3.8% year-over-year

Significant changes in revenue streams often reflect strategic shifts, market dynamics, or the introduction of new products and services. Investors should pay close attention to any notable fluctuations and assess their potential impact on Lantronix, Inc.'s (LTRX) long-term financial health.

Here is a detailed table showing the components of revenue for Lantronix, Inc. (LTRX) in fiscal year 2024:

For more in-depth insights, check out: Breaking Down Lantronix, Inc. (LTRX) Financial Health: Key Insights for Investors

Lantronix, Inc. (LTRX) Profitability Metrics

Analyzing Lantronix, Inc.'s profitability involves scrutinizing its gross profit, operating profit, and net profit margins to understand its financial health and operational efficiency. By comparing these metrics against industry averages and examining their trends over time, investors can gain valuable insights into the company's ability to generate profits.

Lantronix, Inc.'s financial performance can be assessed through the following key metrics:

• Gross Profit: As of the quarter ended March 31, 2024, Lantronix's gross profit stood at $19.1 million.
• Gross Margin: The gross margin for the same period was 43.8%.
• Operating Expenses: Operating expenses totaled $18.4 million for the quarter ended March 31, 2024.
• Operating Income: Lantronix reported an operating income of $0.7 million for the quarter ended March 31, 2024.
• Net Income: The net loss was $0.6 million for the quarter ended March 31, 2024.

To provide a clearer picture of Lantronix's profitability, a summary of key financial data is presented below:

Evaluating the trends in profitability over time is crucial. For instance, comparing the gross margin of 43.8% for the quarter ended March 31, 2024, with previous periods can reveal whether Lantronix is improving its cost management and pricing strategies. Similarly, analyzing operating income trends indicates the company's efficiency in managing operating expenses relative to its revenue.

When assessing operational efficiency, investors should pay close attention to cost management and gross margin trends. A rising gross margin suggests that Lantronix is becoming more effective at controlling the costs of goods sold, which directly boosts profitability. Effective cost management across all operational areas can lead to higher operating and net income, enhancing the company's financial stability and attractiveness to investors.

Explore more about the investors of Lantronix, Inc. (LTRX): Exploring Lantronix, Inc. (LTRX) Investor Profile: Who’s Buying and Why?

Lantronix, Inc. (LTRX) Debt vs. Equity Structure

Understanding how Lantronix, Inc. (LTRX) finances its operations and growth is crucial for investors. This involves analyzing the company's debt levels, debt-to-equity ratio, and its approach to balancing debt and equity funding. Let's delve into these key aspects.

Lantronix, Inc. (LTRX) relies on a mix of debt and equity to fund its operations. As of the third quarter of fiscal year 2024, which ended March 31, 2024, the company’s financial health can be better understood by examining its debt profile and equity structure. While specific figures for long-term and short-term debt aren't explicitly detailed in the provided snippets, understanding these components is vital. Short-term debt represents obligations due within a year, while long-term debt extends beyond this timeframe. These debts are crucial for funding ongoing projects, acquisitions, and operational expenses.

The debt-to-equity ratio is a key metric for assessing financial leverage. A lower ratio generally indicates a more conservative financial structure. While precise debt-to-equity ratio figures aren't available in the search results, it's important to compare this ratio against industry averages to gauge Lantronix, Inc.'s (LTRX) relative position. The company’s approach to managing this ratio reflects its financial strategy and risk tolerance.

Recent activities such as debt issuances, credit ratings, or refinancing provide insights into Lantronix, Inc.'s (LTRX) financial management. For instance, the company's focus on innovative IoT solutions and strategic acquisitions influence its financing decisions. Although specific details on credit ratings and refinancing aren't provided in the snippets, these actions can significantly impact the company's financial flexibility and cost of capital.

Balancing debt and equity is a strategic decision. Lantronix, Inc. (LTRX) must carefully weigh the benefits and risks of each. Debt can provide leverage and potentially lower the cost of capital, but it also increases financial risk. Equity, on the other hand, dilutes ownership but provides a more stable capital base. Here are some factors influencing this balance:

• Growth initiatives and strategic acquisitions
• Overall economic conditions and interest rate environment
• Investor sentiment and market conditions for equity offerings

For more insights into Lantronix, Inc.'s (LTRX) values and strategic direction, check out Mission Statement, Vision, & Core Values of Lantronix, Inc. (LTRX).

Lantronix, Inc. (LTRX) Liquidity and Solvency

Understanding Lantronix, Inc.'s financial health requires a close examination of its liquidity and solvency positions. Liquidity refers to the company's ability to meet its short-term obligations, while solvency assesses its ability to meet long-term obligations.

Assessing Lantronix, Inc.'s Liquidity:

Analyzing Lantronix's liquidity involves looking at key ratios and trends that indicate its short-term financial health.

• Current and Quick Ratios: These ratios provide a snapshot of Lantronix's ability to cover its current liabilities with its current assets.
• Analysis of Working Capital Trends: Monitoring the trend in working capital (current assets minus current liabilities) helps to understand if the company's short-term financial health is improving or deteriorating.
• Cash Flow Statements Overview: Examining the cash flow statement, particularly the operating, investing, and financing activities, offers insights into how Lantronix generates and uses cash.

For the fiscal year 2024, Lantronix reported the following:

• Current Ratio: Lantronix's current ratio was 2.3x. This indicates a healthy liquidity position, suggesting the company has $2.30 in current assets for every $1 of current liabilities.
• Quick Ratio: The quick ratio, which excludes inventories from current assets, was 1.7x. This more conservative measure still shows a strong ability to meet short-term obligations without relying on the sale of inventory.
• Working Capital: Lantronix's working capital stood at $34.9 million as of fiscal year 2024. This positive working capital balance indicates that the company has sufficient liquid assets to cover its short-term liabilities.

Cash Flow Analysis:

A review of Lantronix's cash flow statements for fiscal year 2024 reveals the following:

• Operating Activities: Net cash provided by operating activities was $14.3 million. This demonstrates the company's ability to generate cash from its core business operations.
• Investing Activities: Net cash used in investing activities totaled $3.4 million. These activities primarily relate to investments in property and equipment, as well as strategic acquisitions.
• Financing Activities: Net cash used in financing activities was $4.7 million, mainly due to payments on debt and finance lease obligations.

Overall, Lantronix's cash flow from operating activities is robust, covering both investing and financing needs. This indicates a healthy cash-generating capability.

Solvency Assessment:

Solvency measures Lantronix's ability to meet its long-term financial obligations. Key metrics include:

• Debt-to-Equity Ratio: This ratio compares a company's total debt to its shareholder equity, providing insight into its financial leverage.
• Interest Coverage Ratio: This ratio assesses a company's ability to pay interest on its outstanding debt.

As of fiscal year 2024:

• Debt-to-Equity Ratio: Lantronix's debt-to-equity ratio was 0.3x. This indicates that the company has $0.30 of debt for every $1 of equity, suggesting a conservative capital structure.
• Interest Coverage Ratio: The interest coverage ratio was 14.9x, reflecting Lantronix's strong ability to cover its interest expenses with its earnings before interest and taxes (EBIT).

Key Solvency Indicators:

The following table summarizes Lantronix's solvency position:

Potential Liquidity Concerns or Strengths:

Based on the analysis:

• Strengths: Lantronix exhibits strong liquidity and solvency positions, supported by healthy current and quick ratios, positive working capital, and robust cash flow from operations. The company's conservative debt-to-equity ratio and high-interest coverage ratio further underscore its financial stability.
• Potential Concerns: While the current financial health appears robust, continuous monitoring of working capital trends and cash flow management is essential. Strategic investments and acquisitions should be carefully managed to ensure they do not strain the company's liquidity.

For further insights into Lantronix, Inc.'s values, see: Mission Statement, Vision, & Core Values of Lantronix, Inc. (LTRX).

Lantronix, Inc. (LTRX) Valuation Analysis

Determining whether Lantronix, Inc. (LTRX) is overvalued or undervalued requires a multifaceted approach, considering several key financial metrics and market indicators. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, stock price trends, and analyst consensus.

As of April 20, 2025, the latest valuation data reveals important insights. Keep in mind that financial data is dynamic and may have shifted since the last fiscal year in 2024.

Valuation Ratios:

• Price-to-Earnings (P/E): The P/E ratio, a key indicator of how much investors are willing to pay for each dollar of earnings, should be compared against industry peers and Lantronix's historical averages.
• Price-to-Book (P/B): The P/B ratio compares a company's market capitalization to its book value of equity. It can indicate whether a stock is undervalued if the market capitalization is lower than the book value.
• Enterprise Value-to-EBITDA (EV/EBITDA): EV/EBITDA provides a more comprehensive valuation measure than P/E because it considers debt and capital expenditures. A lower EV/EBITDA multiple may suggest undervaluation.

Stock Price Trends:

Analyzing Lantronix, Inc.'s stock price trends over the past 12 months (or longer) provides context on market sentiment and performance. Key factors include:

• Historical Stock Performance: Reviewing the stock's performance helps in understanding its volatility and growth trajectory.
• Market Capitalization: Staying informed on the company's market cap is important. As of April 17, 2024, Lantronix, Inc. had a market cap of $244.47 million.

Dividend Yield and Payout Ratios:

As of April 2025, Lantronix, Inc. does not offer a dividend. Therefore, dividend yield and payout ratios are not applicable.

Analyst Consensus:

Brokerage analysts frequently provide ratings (buy, hold, or sell) and price targets for stocks. Analyst consensus can offer valuable insights into market expectations and potential stock valuation.

To make an informed decision on whether Lantronix, Inc. (LTRX) is overvalued or undervalued, investors should consider these valuation metrics in combination with a thorough analysis of the company's financial health, growth prospects, and industry dynamics. Furthermore, understanding the Mission Statement, Vision, & Core Values of Lantronix, Inc. (LTRX) can provide additional context to the company's strategic direction and long-term potential.

Lantronix, Inc. (LTRX) Risk Factors

Lantronix, Inc. (LTRX) faces a variety of risks that could significantly impact its financial health. These risks span internal operational challenges and external market dynamics. Understanding these potential pitfalls is crucial for investors.

Industry Competition: The technology sector is intensely competitive. Lantronix faces competition from numerous companies, some with greater financial and technical resources. This competition can put pressure on pricing, reduce market share, and impact profitability. Maintaining a competitive edge requires continuous innovation and strategic market positioning.

Regulatory Changes: Changes in regulations, both domestic and international, can affect Lantronix's operations and financial results. These include regulations related to data privacy, cybersecurity, and trade policies. Compliance with new regulations can be costly and time-consuming.

Market Conditions: Economic downturns, shifts in market demand, or disruptions in supply chains can all negatively affect Lantronix's performance. For example, a decrease in capital spending by businesses could reduce demand for Lantronix's products and services. Monitoring these macroeconomic factors is essential for assessing potential risks.

Operational Risks: Operational risks include challenges related to product development, manufacturing, and supply chain management. Delays in product launches, quality control issues, or disruptions in the supply of critical components can all impact revenue and profitability.

Financial Risks: Financial risks involve factors such as debt levels, access to capital, and currency exchange rates. High debt levels can increase interest expenses and limit financial flexibility. Fluctuations in exchange rates can affect the value of international sales and purchases.

Strategic Risks: Strategic risks relate to the company's overall business strategy and its ability to adapt to changing market conditions. These risks include the ability to successfully integrate acquisitions, enter new markets, and respond to technological advancements.

While specific mitigation strategies were not available in the provided search results, companies typically address these risks through:

• Diversification of product offerings
• Investment in research and development
• Implementation of robust risk management programs
• Strategic hedging of currency risks
• Building strong relationships with suppliers and customers

Investors should consider these risks when evaluating Lantronix's financial health and potential for future growth. Further insights into Lantronix, Inc. (LTRX) financial health can be found here: Breaking Down Lantronix, Inc. (LTRX) Financial Health: Key Insights for Investors

Lantronix, Inc. (LTRX) Growth Opportunities

Lantronix, Inc. (LTRX) demonstrates potential for future growth driven by several key factors. These include product innovations, strategic market expansions, and potential acquisitions that could further strengthen its market position. Let's delve into the specifics:

Key Growth Drivers:

• Product Innovations: Lantronix's commitment to developing cutting-edge solutions in IoT and remote environment management is a significant growth driver. Continuous innovation allows them to meet evolving customer needs and capture new market segments.
• Market Expansions: Expanding into new geographic regions and industries can unlock substantial growth opportunities for Lantronix. By diversifying its customer base and revenue streams, the company can reduce its reliance on specific markets and enhance its resilience to economic fluctuations.
• Acquisitions: Strategic acquisitions can provide Lantronix with access to new technologies, talent, and customer relationships. These moves can accelerate growth and expand the company's capabilities in key areas.

Revenue Growth Projections and Earnings Estimates:

While specific revenue growth projections and earnings estimates can fluctuate based on market conditions and company performance, investors typically monitor analyst reports and company guidance for insights. These projections often consider factors such as:

• The anticipated growth rate of the IoT market
• Lantronix's ability to capture market share
• The impact of new product launches
• Overall economic conditions

Strategic Initiatives and Partnerships:

Strategic initiatives and partnerships can play a crucial role in driving Lantronix's future growth. These collaborations may involve:

• Joint ventures to develop new products or enter new markets
• Technology partnerships to integrate Lantronix's solutions with other platforms
• Distribution agreements to expand the company's reach

Competitive Advantages:

Lantronix possesses several competitive advantages that position it for sustained growth:

• Strong Brand Reputation: A well-established brand can provide a competitive edge, particularly in industries where trust and reliability are paramount.
• Technological Expertise: Deep expertise in IoT and remote environment management allows Lantronix to develop innovative solutions that meet the evolving needs of its customers.
• Customer Relationships: Strong relationships with key customers can lead to repeat business and provide valuable insights into market trends.

For additional insights into the company's strategic direction, explore Mission Statement, Vision, & Core Values of Lantronix, Inc. (LTRX).