Roth Capital analyst Thomas Hayes has maintained a Buy rating on Daktronics (NASDAQ: DAKT) and raised the price target to $29, up from the previous target of $26.

The revised price target reflects an increased valuation outlook for the company. The Buy rating indicates continued confidence in Daktronics' stock performance potential.

Daktronics reported record net sales of $838.7 million and record orders of $860.8 million for fiscal 2026, reflecting a 10.9% increase in sales and a 10.2% increase in orders compared to fiscal 2025. The company returned to profitability for the full year, reporting net income of $45.4 million, or earnings per share (EPS) of $0.92, compared to a net loss of $10.1 million, or a loss per share of $0.21, in the prior year. For the fourth quarter ended May 2, 2026, net sales rose 20.9% to $208.610 million, beating the analyst consensus estimate of $205.267 million by 1.63%. Operating margin improved to 6.8% from a negative operating margin of 1.0% in the year-earlier period.

The company reported quarterly earnings of $0.27 per share, beating the analyst consensus estimate of $0.20 by 35%. This represents a 50% increase over earnings of $0.18 per share from the same period last year.

Operational Performance

The company’s product backlog rose to $356.2 million at the end of fiscal 2026, an increase of 4.3% from the prior year end, with a solid pipeline entering fiscal 2027. Approximately 52% of the backlog is expected to convert into revenue during the first quarter of fiscal 2027. Fourth quarter new orders for products and services totaled $222.0 million, a decrease of 7.7% from the exceptionally strong fourth quarter of fiscal 2025. Full year operating margin expanded to 7.3% from 4.4% in fiscal 2025, driven by stronger operational efficiency, improved supply chain execution, and disciplined inventory and working capital management. Gross margin expanded to 28.0% in the quarter from 25.0% a year ago, driven by revenue conversion and manufacturing discipline.

Segment Performance

Full year net sales growth was led by the Live Events, High School Park and Recreation, and Transportation business units. The Live Events business unit won five of five Major League Baseball stadium installations since the third quarter of fiscal 2025. The Transportation and International business units achieved their own record order quarters during the year. Commercial and International net sales were relatively flat year-over-year in the fourth quarter. The Live Events segment reported a 10.1% increase in annual sales to $321.1 million, while orders climbed 18.4% to $336 million. Commercial sales increased 15.7% to $180.8 million. Transportation orders rose 23.7%, while International sales advanced 24.5%.

Financial Position

Cash and cash equivalents totaled $131.6 million as of May 2, 2026, with $10.8 million of total current and long-term debt outstanding. The company generated $49.2 million of cash from operations and $34.9 million in free cash flow during fiscal 2026, using $14.9 million for purchases of property and equipment. Daktronics repurchased 1.4 million shares of common stock for $25.4 million during the fiscal year, including 0.1 million shares for $2.6 million in the fourth quarter. The working capital ratio stood at 2.3 to 1 at the end of the fiscal year.

Strategic Outlook

Management stated that the company is tracking toward its fiscal 2028 targets of 7-10% revenue CAGR, 10-12% operating margin, and 17-20% return on invested capital (ROIC). Strategic priorities for fiscal 2027 include enhancing core organic growth, optimizing the operating model, and deploying capital to support growth, pursue targeted mergers and acquisitions, and return capital to shareholders through share repurchases. The company expects its Mexico manufacturing facility to begin production in July 2026, with initial shipments planned for the fiscal second quarter. Management noted tariff-related uncertainty remains a risk, with no tariff refund amounts recognized due to uncertainty around eligibility and timing.