Daktronics Stock Jumps To Record High On Q2 Earnings Beat: Retail Optimism Grows

Daktronics stock jumped over 15% to a record high of $19.81 in mid-day trading on Wednesday after reporting better-than-expected second-quarter results.

Daktronics, known for manufacturing large signs and displays,  reported earnings of $0.22 per share, exceeding the expected $0.17. 

The company also saw a notable increase in sales and record cash flow, despite facing some operational challenges.

It recently gained traction on social media for its installations at the L.A. Clippers' Intuit Dome and the Miami HEAT’s Kaseya Center.

Sales reached $208.33 million, a 4.5% increase from the same period last year, and exceeded analysts’ expectations of $199.99 million. 

The uptick was primarily driven by strong demand in the Commercial, Live Events, and Transportation business units, offset by weaker sales in the High School Park and Recreation and International sectors.

Net income surged to $21.4 million, a sharp rise from just $2.2 million in the same quarter last year.

Daktronics Sentiment and Message Volume on Dec 4 as of 1:00 p.m. ET | Source: Stocktwits

Retail sentiment around the stock improved to ‘extremely bullish’ (86/100) from ‘bullish’ a day ago, along with an uptick in chatter within the ‘extremely high’ territory.

Perhaps the most notable highlight from Daktronics' second-quarter results was the company’s record cash flow from operations, which reached $43.3 million for the quarter and $62.8 million for the first half of the fiscal year. 

Its product order backlog continued to decline, from $267.2 million at the end of Q1 to $236 million at the end of Q2. 

“We continue to execute on our business transformation plan, aiming to grow revenue faster than the market, expand margins, and generate returns on capital in the mid-to-high teens,” Kurtenbach said in a statement.

Daktronics, which began its search for a new CFO alongside announcing its transformation efforts in October, saw 3.3% year-over-year increase in order growth but a 3.3% decrease sequentially. 

Although the order variability is typical for Daktronics' large project business, the company's focus on expanding digital solutions has positioned it for continued growth, according to Kurtenbach.

Daktronics' stock price has more than doubled so far this year.

For updates and corrections email newsroom[at]stocktwits[dot]com.<

Read also: Intel Stock In Focus As Marvell Chief Shoots Down CEO Speculation: Retail Hopes Dampened