We project continued growth in F2026-F2027, supported by a strong backlog, aided by continued strong demand and implemented efficiencies, which should also drive margin improvement.
Last week's acquisition of the intellectual property (IP), equipment assets and technical expertise from X Display Company Technology Limited (XDC) strengthens the company's product offering and competitive position, in our view, which should aid growth.
In addition, the addition of a leased facility in Mexico that is expected to be in production in April 2026 is a further testament to the Board's conviction in the company.
Management has guided revenue to grow faster than the overall market at 7%-10%, with an operating margin of 10%-12% and a return on invested capital (ROIC) of 17%-20% by F2028.
The CEO search has also been completed, with Ramesh Jayaraman joining as president and CEO, effective February 1, 2026; he is also expected to join the Board as a director. We believe Mr. Jayaraman possesses the experience to lead DAKT's transformational journey.
DAKT remains cash flow positive and ended 2Q:F26 with $150 million in cash.
Our $28 price target is based on 22x our F2027 EPS estimate of $1.25. The company's trajectory for sustained profitability, solid balance sheet and expanded cash flow support our moderate risk rating. Management will participate in the Sidoti Virtual Conference on January 21-22; you may find more information here. An investor day is planned for April 2026.
29 Dec 2025
We Expect Strong Momentum To Continue Into 2026; Solid Financials Provide Options And Support Further M&A; Maintain $28 Price Target, Moderate Risk
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We Expect Strong Momentum To Continue Into 2026; Solid Financials Provide Options And Support Further M&A; Maintain $28 Price Target, Moderate Risk
We project continued growth in F2026-F2027, supported by a strong backlog, aided by continued strong demand and implemented efficiencies, which should also drive margin improvement.
Last week's acquisition of the intellectual property (IP), equipment assets and technical expertise from X Display Company Technology Limited (XDC) strengthens the company's product offering and competitive position, in our view, which should aid growth.
In addition, the addition of a leased facility in Mexico that is expected to be in production in April 2026 is a further testament to the Board's conviction in the company.
Management has guided revenue to grow faster than the overall market at 7%-10%, with an operating margin of 10%-12% and a return on invested capital (ROIC) of 17%-20% by F2028.
The CEO search has also been completed, with Ramesh Jayaraman joining as president and CEO, effective February 1, 2026; he is also expected to join the Board as a director. We believe Mr. Jayaraman possesses the experience to lead DAKT's transformational journey.
DAKT remains cash flow positive and ended 2Q:F26 with $150 million in cash.
Our $28 price target is based on 22x our F2027 EPS estimate of $1.25. The company's trajectory for sustained profitability, solid balance sheet and expanded cash flow support our moderate risk rating. Management will participate in the Sidoti Virtual Conference on January 21-22; you may find more information here. An investor day is planned for April 2026.