RELL · sample dossier
Richardson Electronics Ltd
70/100
OutdatedGenerated Oct 3, 2026 · 10:00 AM UTC · 1 hour ago
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EquityRichardson Electronics LtdXNAS
Decision context
HOLD
Analysis horizon · 80% convictionA mixed picture — no strong reason to buy or sell right now.
The stock trades near our estimated value range midpoint.
Current price
$18.99
Estimated value range
$17.00 – $24.00
Gap (vs midpoint)
+7.4%
Valuation is aligned with fundamentals; future returns depend on operational execution.
Market context
Price
Price when available
Pick how far back the chart looks
1 month
+11.8%
3 months
+12.2%
6 months
+70.5%
1 year
+97.6%
Executive summary & thesis
Richardson Electronics Ltd is a micro-cap electronic components manufacturer with a market capitalization of $282.27M and an EV/EBITDA multiple of 26.40.
- EPS grew 212.5% YoY alongside 27.6% YoY revenue growth, showing rapid operating acceleration.
- Solvency profile is exceptionally safe with Debt/Equity of 0.01 and an Altman Z-score of 7.59.
- Price momentum is strong with a 97.6% 1-year return and position above 50-day and 200-day moving averages.
- Negative cash generation leaves FCF/Share at $-0.50 despite 212.5% YoY reported EPS growth.
- Valuation multiples are elevated with P/E at 42.20 and EV/EBITDA at 26.40 for a micro-cap.
- Profit margins remain thin with a net margin of 2.8% and ROA of 1.8%.
Things to keep in mind
- 1P/E 42.2xView source
- 2Net margin 2.8%View source
- 3Negative cash generation leaves FCF/Share at $-0.50 despite 212.5% YoY reported EPS growth.View source
What to watch next
Factor profile
Momentum-led profile
| Factor | Score |
|---|---|
| Quality | 41 out of 100 (Neutral). Business health — profits, returns, and consistency. Higher means a more durable company. |
| Growth | 88 out of 100 (Elite). How fast sales and earnings are rising. Higher means the business is expanding faster. |
| Value | 42 out of 100 (Neutral). How cheap the stock looks for what you get. Higher means a more attractive price. |
| Safety | 94 out of 100 (Elite). Balance-sheet cushion and fewer red flags. Higher means less risk of a nasty surprise. |
| Momentum | 100 out of 100 (Elite). Recent share-price trend. Higher means buyers have been in control lately. |
Another way to look at it
A calmer look at both sides of the Richardson Electronics Ltd story
The prevailing consensus and scoring engine's 'Buy' verdict overlook that RELL's 97.6% one-year price surge has decoupled entirely from underlying unit economics.
Paying a trailing P/E of 42.2 and an EV/EBITDA of 26.4 for a hardware distributor delivering a razor-thin 2.8% net margin and 1.8% ROA leaves zero margin of safety. While reported EPS grew 212.5% YoY, free cash flow per share remains negative at $-0.50, signaling an aggressive divergence between non-cash accounting earnings and real liquidity generation. Meanwhile, key leadership is capitalizing on momentum rather than holding, evidenced by $1.21M in net insider selling over the past three months, including COO Wendy Diddell unloading 23,901 shares. The market is pricing a structural semiconductor growth story into a cyclical components business that is actively consuming cash.
Severe divergence between GAAP net income and liquidity, where 212.5% YoY EPS growth masks ongoing operational cash burn of $-0.50 FCF per share.
Capital allocation inefficiency evidenced by an asset base generating an ROA of merely 1.8% despite peak cyclical demand.
Stale quarterly financial filings exceeding the 90-day threshold prior to the 2026-07-22 8-K, obscuring balance sheet shifts and inventory build.
Extrapolating sequential quarterly EPS expansion from $0.07 to $0.25 into permanent earnings power on a gross margin of only 31.2%.
Assigning software-like multiples of 42.2 P/E and 26.4 EV/EBITDA to a micro-cap electronic component manufacturer with a net margin of 2.8%.
Assuming balance sheet health is impregnable based on Debt/Equity of 0.01 and Altman Z of 7.59 while ignoring that sustained $-0.50 FCF/share will deplete equity.
Gross margin drops below 31.2%.
Revenue growth YoY falls below 27.6%.
Cash after investing
See whether Richardson Electronics Ltd still makes cash after it spends to grow.
- Gross margin drops below 31.2%.
- Revenue growth YoY falls below 27.6%.
- Net margin expands above 2.8% for two consecutive quarters
For learning and research only — not investment advice. AlphaDog doesn’t hold stocks and isn’t your financial advisor.
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