Back to top

Image: Bigstock

Richardson Electronics (RELL) Stock Sinks As Market Gains: What You Should Know

Read MoreHide Full Article

Richardson Electronics (RELL - Free Report) closed the most recent trading day at $17.40, moving -0.57% from the previous trading session. This change lagged the S&P 500's 0.88% gain on the day. At the same time, the Dow lost 0.11%, and the tech-heavy Nasdaq lost 3.76%.

Coming into today, shares of the electronic components and communication products company had gained 15.06% in the past month. In that same time, the Computer and Technology sector gained 6.17%, while the S&P 500 lost 0.38%.

Investors will be hoping for strength from Richardson Electronics as it approaches its next earnings release. The company is expected to report EPS of $0.19, down 38.71% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $61.5 million, down 0.21% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.46 per share and revenue of $265.3 million, which would represent changes of +43.14% and +18.11%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Richardson Electronics. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Richardson Electronics currently has a Zacks Rank of #5 (Strong Sell).

In terms of valuation, Richardson Electronics is currently trading at a Forward P/E ratio of 11.99. This represents a premium compared to its industry's average Forward P/E of 7.41.

We can also see that RELL currently has a PEG ratio of 0.6. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Electronics - Parts Distribution stocks are, on average, holding a PEG ratio of 0.73 based on yesterday's closing prices.

The Electronics - Parts Distribution industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 223, putting it in the bottom 12% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on

See More Zacks Research for These Tickers

Normally $25 each - click below to receive one report FREE:

Richardson Electronics, Ltd. (RELL) - free report >>

Published in