IRVINE, Calif. - Lantronix Inc. (NASDAQ: NASDAQ:LTRX), a company specializing in Internet of Things (IoT) solutions, announced today that it has completed the acquisition of NetComm Wireless Pty Ltd, a subsidiary of DZS Inc., enhancing its Enterprise IoT portfolio with advanced 5G technology. The deal, valued at $6.5 million in cash and including the assumption of certain liabilities, aims to strengthen Lantronix's position in the Enterprise and Smart City markets. According to InvestingPro data, Lantronix currently appears undervalued based on its Fair Value analysis, with a market capitalization of approximately $145 million and a strong current ratio of 2.61, indicating solid short-term financial health.
The integration of NetComm's assets is expected to bolster Lantronix's offerings in critical infrastructure, asset monitoring, and telecommunications. Saleel Awsare, president and CEO of Lantronix, expressed confidence that the acquisition will expand the company's enterprise and industrial IoT solutions, adding new blue-chip customers and extending its reach into untapped markets like Australia and New Zealand.
NetComm's suite includes Ethernet-to-Cellular and Wi-Fi connectivity products designed for rugged environments, offering low-latency performance and remote management capabilities. These products are already trusted by leading global companies, and Lantronix anticipates the NetComm enterprise portfolio will contribute between $6 million and $7 million in revenue during the 2024 calendar year. InvestingPro analysis shows the company generated revenue of $161.7 million in the last twelve months, with a gross profit margin of 40%. InvestingPro subscribers can access 12 additional key insights about Lantronix's financial performance and growth prospects.
Lantronix, recognized as a global leader in compute and connectivity IoT solutions, serves high-growth industries such as Smart Cities, Automotive, and Enterprise. Its products and services are designed to address each layer of the IoT Stack, including Intelligent Substations infrastructure, Infotainment systems, and Video Surveillance, complemented by advanced Out-of-Band Management for Cloud and Edge Computing.
While the press release contains forward-looking statements regarding the expected benefits of the acquisition, such as enhanced competitive offerings and new customer acquisition opportunities, it is important to note that these statements are based on current expectations and are subject to risks and uncertainties that could materially affect actual results. Analysts maintain an optimistic outlook, with a consensus recommendation of 1.4 (Strong Buy) and price targets ranging from $5 to $7.50 per share. For detailed analysis and comprehensive insights, investors can access the full Pro Research Report available on InvestingPro, which covers this and 1,400+ other US stocks.
This news is based on a press release statement from Lantronix, and the information provided is subject to verification by independent sources. The acquisition marks a strategic move by Lantronix to further solidify its standing in the evolving IoT landscape.
In other recent news, Lantronix Inc. reported a modest 4% increase in year-over-year revenue, totaling $34.4 million for the first quarter of fiscal year 2025. The company's non-GAAP earnings per share (EPS) were reported at $0.06. Despite the ongoing challenges with a major automotive customer in Turkey and slowdowns in federal projects, Lantronix is optimistic about its growth prospects, forecasting a 20% growth for 2025 following the NetComm integration.
Canaccord Genuity revised its stock price target for Lantronix, reducing it to $5.00 from the previous $7.50, but maintained a Buy rating on the company's shares. The new price target is based on approximately 13 times the firm's fiscal year 2026 estimated non-GAAP earnings per share (EPS) of $0.38. The firm anticipates potential future acquisitions by Lantronix and is looking for follow-on orders from Lantronix's largest customer, Gridspertise, and Turkish automotive OEM, Togg.
Lantronix's acquisition of NetComm's IoT product line and its collaboration with Qualcomm (NASDAQ:QCOM) on Edge AI are projected to significantly boost its revenue and market position from 2026 onward. The company also provided a cautious revenue outlook for Q2 FY2025, projecting revenue between $29 million and $33 million and non-GAAP EPS ranging from $0.01 to $0.05. These recent developments suggest a steady growth trajectory for Lantronix in the coming years.
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