A new SEC filing reveals that Howard I Atkins, Director at Daktronics DAKT, made a notable insider purchase on September 11,.

What Happened: A Form 4 filing from the U.S. Securities and Exchange Commission on Wednesday showed that Atkins purchased 7,160 shares of Daktronics. The total transaction amounted to $84,989.

At Thursday morning, Daktronics shares are down by 0.0%, trading at $12.19.

Get to Know Daktronics Better

Daktronics Inc designs and manufactures electronic scoreboards, programmable display systems, and large-screen video displays for sporting, commercial, and transportation applications. It is engaged in a full range of activities: marketing and sales, engineering and product design and development, manufacturing, technical contracting, professional services, and customer service and support. The company offers a complete line of products, from small scoreboards and electronic displays to large multimillion-dollar video display systems as well as related control, timing, and sound systems. The company has five reportable segments: Commercial, Live Events, High School Park and Recreation, Transportation, and International. The company makes the majority of its revenue from Live events.

Daktronics: A Financial Overview

Decline in Revenue: Over the 3 months period, Daktronics faced challenges, resulting in a decline of approximately -2.77% in revenue growth as of 31 July, 2024. This signifies a reduction in the company’s top-line earnings. In comparison to its industry peers, the company trails behind with a growth rate lower than the average among peers in the Information Technology sector.

Exploring Profitability:

• Gross Margin: With a low gross margin of 26.4%, the company exhibits below-average profitability, signaling potential struggles in cost efficiency compared to its industry peers.

• Earnings per Share (EPS): Daktronics’s EPS is below the industry average. The company faced challenges with a current EPS of -0.11. This suggests a potential decline in earnings.

Debt Management: With a below-average debt-to-equity ratio of 0.32, Daktronics adopts a prudent financial strategy, indicating a balanced approach to debt management.

In-Depth Valuation Examination:

• Price to Earnings (P/E) Ratio: The current Price to Earnings ratio of 58.05 is higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.

• Price to Sales (P/S) Ratio: With a P/S ratio of 0.7 below industry standards, the stock shows potential undervaluation, making it an appealing investment option for those focusing on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): The company’s EV/EBITDA ratio 6.15 is below the industry average, indicating that it may be relatively undervalued compared to peers.

Market Capitalization Analysis: Reflecting a smaller scale, the company’s market capitalization is positioned below industry averages. This could be attributed to factors such as growth expectations or operational capacity.

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The Impact of Insider Transactions on Investments

Investors should view insider transactions as part of a multifaceted analysis and not rely solely on them for decision-making.

In the context of legal matters, the term “insider” refers to any officer, director, or beneficial owner holding more than ten percent of a company’s equity securities, as outlined by Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are obligated to report their transactions through a Form 4 filing, which must be completed within two business days of the transaction.

Pointing towards optimism, a company insider’s new purchase signals their positive anticipation for the stock to rise.

Despite insider sells not always signaling a bearish sentiment, they can be driven by various factors.

Unlocking the Meaning of Transaction Codes

In the domain of transactions, investors frequently turn their focus to those taking place in the open market, as meticulously outlined in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S signifies a sale. Transaction code C signals the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of Daktronics’s Insider Trades.

This article was generated by Benzinga’s automated content engine and reviewed by an editor.