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RFIL

RF Industries NasdaqGM:RFIL Stock Report

Last Price

US$5.69

Market Cap

US$57.8m

7D

-3.6%

1Y

-30.2%

Updated

29 Sep, 2022

Data

Company Financials +
RFIL fundamental analysis
Snowflake Score
Valuation3/6
Future Growth3/6
Past Performance2/6
Financial Health3/6
Dividends0/6

RFIL Stock Overview

RF Industries, Ltd., together with its subsidiaries, designs, manufactures, and markets interconnect products and systems in the United States, Canada, Mexico, and internationally.

RF Industries, Ltd. Competitors

Price History & Performance

Summary of all time highs, changes and price drops for RF Industries
Historical stock prices
Current Share PriceUS$5.69
52 Week HighUS$8.71
52 Week LowUS$5.17
Beta1.13
1 Month Change-17.54%
3 Month Change-8.23%
1 Year Change-30.18%
3 Year Change-16.20%
5 Year Change152.89%
Change since IPO18,866.67%

Recent News & Updates

Sep 29

RF Industries Is Improving But Still Expensive

Summary RFIL assembles cables for specialized uses like telecommunication antennas. The company operates in a low margin, competitive, and project-based industry. Although RFIL's revenues and operating profits have been growing this year, they may not be sustainable, based on the industry dynamics. Even considering current growth as sustainable, the company would not be able to post earnings consistent with its current $57 million market cap. RFIL is an interesting company to follow, but it is expensive for investment. RF Industries (RFIL) is an assembler of specialized cables from a variety of industries. The company serves different segments through six independent subsidiaries located in the Northeast and Southwest. The company has not been able to generate consistent operating profits, in my opinion because of low competitive power and lack of SG&A efficiency. In 2021, RFIL made a relatively expensive acquisition, losing most of its cash and increasing debt. Although I still consider RFIL expensive compared to its earnings generation potential, the latest quarterly data shows that the company is improving efficiencies and growing profits fast on a quarterly basis. Note: Unless otherwise stated, all information has been obtained from RFIL's filings with the SEC. Short recap of the situation I wrote an article on RFIL in March this year, presenting the company's operations in detail. In this section, I will only recap the most important aspects. First, I do not believe RFIL has a substantial competitive advantage or that it is located in a desirable industry. RFIL competes in the cable industry with bigger companies like Amphenol (APH), Belden (BDC) and TE Connectivity (TEL). The company sells undifferentiated and even commoditized products and adds little value to the chain besides owning the assembling operations. Given that an assembler requires facilities and semi-qualified workers (fixed costs), the industry is prone to rivalry and price-destroying competition. Finally, a significant portion of RFIL's business is non recurring, based on contracts signed for specific projects. This generates a very sticky SG&A structure. Data by YCharts Second, despite the increase in revenue seen after 2018 above, enhanced by the acquisition of Microlab in 2021, RFIL has been unable to grow operating profits or net income, as shown below. Data by YCharts I believe the reason has been loss of gross margin and inefficiencies at the SG&A level, as shown below. In particular, RFIL operates its six subsidiaries as completely independent companies, despite them operating in substantially similar markets. This probably generates significant duplication of responsibilities and inefficiencies. Data by YCharts Finally, I commented that RFIL's recent acquisition of Microlab, a cable assembler specialized in telecommunications, did not seem accretive. The reasons were decreasing revenues at Microlab for the past three years, and the fact that the company had to take $17 million in debt to pay for the $25 million acquisition. At that time, RFIL had not provided significant financial information on Microlab, only posting its adjusted EBITDA. The company has not yet posted separate financial statements for Microlab. In that article, readers with more detailed knowledge of the industry commented several interesting points. First, that RFIL's operations have improved since 2017, coincidentally with the introduction of the new CEO Robert Dawson. Second, that the company still has a lot of room to improve efficiencies, particularly by consolidating its subsidiaries at the operating level. Third, that Microlab was under-invested under its previous owner, and that RFIL would be able to obtain higher returns from the company. Finally, that the upcoming investment in 5G and DAS infrastructure should increase RFIL's revenues. RFIL's latest quarterly data is good but not enough Since my latest article, RFIL has published financial information for three quarters (January, April, July), and these show promising data. RFIL has posted three continued quarters of growing revenue that have translated into faster growing operating profits. In particular, and adjusting for one-time costs related to Microlab's acquisition, the company posted operating profits of $300 thousand in 1Q21, $700 thousand in 2Q22 and $1.3 million in 3Q22. Of course $2.5 million in operating profits is not enough to justify a $57 million market cap, but growth in the bottom line is a good signal. However, the reader should also take into account two aspects that increase RFIL's volatility. First, the company has non recurring revenues, therefore quarters with significant sales can be followed by quarters with much lower sales. Second, because RFIL's operating margins are thin, small variations in revenue generate much bigger changes in net income. Finally, as the chart below shows, RFIL's operating income is volatile, and its stock price seems to move in line with it, with cycles of boom and bust. Whether we are in the boom or bust stage is more difficult to determine, but trading at a PE of 30, RFIL does not provide a lot of margin of safety.

Sep 22
Is It Time To Consider Buying RF Industries, Ltd. (NASDAQ:RFIL)?

Is It Time To Consider Buying RF Industries, Ltd. (NASDAQ:RFIL)?

While RF Industries, Ltd. ( NASDAQ:RFIL ) might not be the most widely known stock at the moment, it received a lot of...

Sep 14

RF Industries Non-GAAP EPS of $0.12 misses by $0.01, revenue of $23.84M beats by $1.98M

RF Industries press release (NASDAQ:RFIL): Q3 Non-GAAP EPS of $0.12 misses by $0.01. Revenue of $23.84M (+56.2% Y/Y) beats by $1.98M. Backlog of $30.6 million at July 31, 2022 on third quarter bookings of $26.8 million. As of today, backlog stands at $31.0 million. Gross profit margin was 30%, compared to 28% in the preceding second quarter, and 28% in the third quarter of fiscal 2021. Adjusted EBITDA was $2.1 million, compared to adjusted EBITDA of $1.0 million in the third quarter of fiscal 2021. Cash and cash equivalents were $5.1 million as of the end of the third quarter, and the Company's full $3.0 million revolver remains available. 2022 Outlook: Full year net sales of between $83 million to $85 million, which would represent growth of at least 45% year over year. Gross margin improvement for the full year as we continue to drive margin improvement opportunities and a better product mix

Shareholder Returns

RFILUS ElectronicUS Market
7D-3.6%-2.3%-3.1%
1Y-30.2%-21.7%-21.5%

Return vs Industry: RFIL underperformed the US Electronic industry which returned -21.3% over the past year.

Return vs Market: RFIL underperformed the US Market which returned -20.3% over the past year.

Price Volatility

Is RFIL's price volatile compared to industry and market?
RFIL volatility
RFIL Average Weekly Movement5.7%
Electronic Industry Average Movement6.7%
Market Average Movement6.9%
10% most volatile stocks in US Market15.7%
10% least volatile stocks in US Market2.8%

Stable Share Price: RFIL is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: RFIL's weekly volatility (6%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
1979300Rob Dawsonhttps://www.rfindustries.com

RF Industries, Ltd., together with its subsidiaries, designs, manufactures, and markets interconnect products and systems in the United States, Canada, Mexico, and internationally. The company operates through two segments, RF Connector and Cable Assembly and Custom Cabling Manufacturing and Assembly. The company’s RF Connector and Cable Assembly segment designs, manufactures, and distributes various coaxial connectors and cable assemblies that are integrated with coaxial connectors.

RF Industries, Ltd. Fundamentals Summary

How do RF Industries's earnings and revenue compare to its market cap?
RFIL fundamental statistics
Market CapUS$57.79m
Earnings (TTM)US$1.81m
Revenue (TTM)US$83.37m

31.9x

P/E Ratio

0.7x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
RFIL income statement (TTM)
RevenueUS$83.37m
Cost of RevenueUS$60.63m
Gross ProfitUS$22.75m
Other ExpensesUS$20.94m
EarningsUS$1.81m

Last Reported Earnings

Jul 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)0.18
Gross Margin27.28%
Net Profit Margin2.17%
Debt/Equity Ratio39.2%

How did RFIL perform over the long term?

See historical performance and comparison