Richardson Electronics Valuation

Q: What is the Fair Price of RELL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

RELL ($14.13) is trading below our estimate of [[fair value]] ($77.98)

Is RELL undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Below Fair Value
Significantly Below Fair Value
Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of RELL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: RELL ($14.13) is trading below our estimate of fair value ($77.98)

Significantly Below Fair Value: RELL is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for RELL?

Key metric: As RELL is unprofitable we use its Price-To-Sales Ratio for relative valuation analysis.

The above table shows the Price to Sales ratio for RELL. This is calculated by dividing RELL's market cap by their current revenue.
What is RELL's PS Ratio?
PS Ratio	1x
Sales	US$197.60m
Market Cap	US$199.46m

RELL key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.9x
Enterprise Value/EBITDA	49.5x
PEG Ratio	n/a

Price to Sales Ratio vs Peers

How does RELL's PS Ratio compare to its peers?

The above table shows the PS ratio for RELL vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	Forward PS	Estimated Growth	Market Cap
Peer Average	0.8x
EACO EACO	0.5x	n/a	US$184.2m
CLMB Climb Global Solutions	1.5x	14.7%	US$598.6m
SCSC ScanSource	0.4x	4.9%	US$1.2b
CNXN PC Connection	0.7x	5.7%	US$1.8b
RELL Richardson Electronics	1x	13.0%	US$199.5m

Price-To-Sales vs Peers: RELL is expensive based on its Price-To-Sales Ratio (1x) compared to the peer average (0.8x).

Price to Sales Ratio vs Industry

How does RELL's PS Ratio compare vs other companies in the US Electronic Industry?

34 Companies	Price / Sales	Estimated Growth	Market Cap
SNX TD SYNNEX	0.2x	5.3%	US$9.76b
ARW Arrow Electronics	0.2x	2.7%	US$5.98b
INGM Ingram Micro Holding	0.1x	3.5%	US$5.35b
AVT Avnet	0.2x	3.7%	US$4.54b

34 Companies		Estimated Growth	Market Cap

No more companies

Price-To-Sales vs Industry: RELL is good value based on its Price-To-Sales Ratio (1x) compared to the US Electronic industry average (1.9x).

Price to Sales Ratio vs Fair Ratio

What is RELL's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

RELL PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio	1x
Fair PS Ratio	0.8x

Price-To-Sales vs Fair Ratio: RELL is expensive based on its Price-To-Sales Ratio (1x) compared to the estimated Fair Price-To-Sales Ratio (0.8x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is lower than the current share price.

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