Richardson Electronics, Ltd. (NASDAQ: RELL)

Sector: Technology Industry: Electronic Components CIK: 0000355948
Market Cap 168.78 Mn
P/B 1.24
P/E 9.41
P/S 0.75
ROIC (Qtr) -0.39
Div Yield % 2.36
Rev 1y % (Qtr) 5.65
Total Debt (Qtr) 1.74 Mn
Debt/Equity (Qtr) 0.01
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About

Richardson Electronics, Ltd., commonly recognized by its ticker symbol RELL, operates in the industrial and electronics industry, specializing in the production of engineered solutions, power grid and microwave tubes, and related consumables. The company's operations span across various markets, including alternative energy, healthcare, aviation, broadcast, communications, industrial, marine, medical, military, scientific, and semiconductor, with a global presence in North America, Asia/Pacific, Europe, and Latin America. Richardson Electronics'...

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Investment thesis

Bull case

  • Strong operating cash flow of 5.94M provides robust 3.41x coverage of total debt 1.74M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 33.14M provide 31.92x coverage of short-term debt 1.04M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 201.45M provides 115.64x coverage of total debt 1.74M, indicating robust asset backing and low credit risk.
  • Retained earnings of 79.41M provide full 112.80x coverage of long-term debt 704000, indicating strong internal capital position.
  • Tangible assets of 201.45M provide robust 11.97x coverage of other current liabilities 16.82M, indicating strong asset backing.

Bear case

  • Operating cash flow of 5.94M provides thin coverage of dividend payments of (3.42M) with a -1.74 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • The company's operating cash flow of 5.94M shows concerning coverage of stock compensation expenses of 1.60M, with a 3.70 ratio indicating potential earnings quality issues.
  • Free cash flow of 1.94M provides weak coverage of capital expenditures of 4M, with a 0.49 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of 1.01M show weak coverage of depreciation charges of 3.85M, with a 0.26 ratio indicating high capital intensity and potential reinvestment needs.
  • High depreciation of 3.85M relative to operating cash flow of 5.94M, which is 0.65x suggests significant maintenance capital requirements affecting free cash flow.

Consolidation Items Breakdown of Revenue (2025)

Peer comparison

Companies in the Electronic Components
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 APH Amphenol Corp /De/ 180.75 Bn 42.33 7.83 15.50 Bn
2 GLW Corning Inc /Ny 111.40 Bn 69.80 7.13 8.43 Bn
3 TEL TE Connectivity plc 69.66 Bn 33.75 3.85 5.71 Bn
4 CLS Celestica Inc 33.17 Bn 47.38 2.94 0.78 Bn
5 JBL Jabil Inc 27.80 Bn 39.54 0.89 3.37 Bn
6 FLEX Flex Ltd. 24.18 Bn 28.38 0.90 5.02 Bn
7 FN Fabrinet 17.82 Bn 47.27 4.58 0.06 Bn
8 TTMI Ttm Technologies Inc 9.30 Bn 70.47 3.34 1.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.66 3.02
EV to Cash from Ops. EV/CFO 69.55 -590.38
EV to Debt EV to Debt 76.30 107.94
EV to EBIT EV/EBIT 8.43 20.68
EV to EBITDA EV/EBITDA 6.86 -27.60
EV to Free Cash Flow [EV/FCF] EV/FCF -109.93 -537.03
EV to Market Cap EV to Market Cap 0.79 -1.14
EV to Revenue EV/Rev 0.59 96.65
Price to Book Value [P/B] P/B 1.24 6.99
Price to Earnings [P/E] P/E 9.41 -8.83
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.24 1.07
Dividend Payout Ratio % Div Payout % (Qtr) 480.00 20.91
Dividend per Basic Share Div per Share (Qtr) 0.24 0.26
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 179.10 10.42
Interest Coverage Int. cover (Qtr) 0.00 14.05
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -41.76 -43.87
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 24.42 125.88
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 -0.04
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 71.49 -176.07
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -40.77 14.38
EBIT Growth (1y) % EBIT 1y % (Qtr) 133.26 15.28
EBT Growth (1y) % EBT 1y % (Qtr) 133.26 7.50
EPS Growth (1y) % EPS 1y % (Qtr) 66.67 2.30
FCF Growth (1y) % FCF 1y % (Qtr) -74.96 9.29
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 6.69 15.57
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.05 0.77
Cash Payout Ratio Cash Payout (Qtr) 0.34 0.05
Cash Ratio Cash Ratio (Qtr) 0.80 1.48
Current Ratio Curr Ratio (Qtr) 4.14 3.80
Debt to Equity Ratio Debt/Equity (Qtr) 0.01 0.68
Interest Cover Ratio Int Coverage (Qtr) 0.00 14.05
Times Interest Earned Times Interest Earned (Qtr) 0.00 14.05
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 2.30 21.48
EBIT Margin % EBIT Margin % (Qtr) 0.48 -42.60
EBT Margin % EBT Margin % (Qtr) 0.48 -10.39
Gross Margin % Gross Margin % (Qtr) 31.10 31.37
Net Profit Margin % Net Margin % (Qtr) 0.40 -11.50