Is Lantronix stock still a buy?

Roth Capital Markets analyst Scott Searle maintained a “Buy” rating and $8.00 target for Lantronix (Lantronix Stock Quote, Chart, News, Analysts, Financials NASDAQ:LTRX) in an Aug. 28 report, saying the company is well-positioned to benefit from emerging edge AI trends.

Lantronix reported fiscal fourth-quarter 2025 revenue of $28.8-million, down 41% year over year but up 1% sequentially, with Adjusted EBITDA of $400,000 and earnings of $0.01 per share. The results were in line with guidance, which called for revenue between $26.5-million and $30.5-million. IoT Solutions revenue rose 13% sequentially to $16.7-million, accounting for 58% of total sales and reflecting initial contributions from drone contracts. Embedded Systems revenue fell about 14% as the company continued to de-emphasize lower-margin lines such as WiFi.

Gross margin was 40.6%, down 350 basis points sequentially, impacted by tariffs and a $700,000 inventory writedown. Adjusted for the charge, margins were about 43%, in line with normalized levels. Net of the writedown, EPS would have been one to two cents higher. The company ended fiscal 2025 with $20.1-million in cash.

For the fiscal first quarter of 2026, Lantronix guided revenue to $28.5-million to $30.5-million, in line with consensus and Searle’s estimate of $29.9-million, with EPS of $0.02 to $0.04. He said the outlook reflects early contributions from carrier cell site monitoring and drone deployments.

Searle expects fiscal 2026 revenue of $127-million, up 3% to 4% year over year, or about 15% excluding the impact of discontinued Gridspertise revenue. EPS is forecast at $0.23, down slightly due to the removal of low-margin sales.

He said edge AI remains the key growth driver, citing increasing data generated at the edge from connected devices, cameras, and sensors.

“With intelligent gateways, Qualcomm-enabled modules, and Lantronix’s Perception Platform, LTRX is poised to address this rapidly emerging opportunity,” he said.

“Despite the recent appreciation, LTRX remains discounted at around 1x EV/CY2026 sales versus historic comps of 1–2x,” he added. “We believe the commercialization of early edge AI solutions, drones, cell site monitoring will be further enhanced with other edge AI opportunities, likely around video applications.”

Searle said Lantronix generated $5.3-million in Adjusted EBITDA on $122.8-million in revenue in fiscal 2025, compared with his prior forecast of $5.5-million on $122.5-million. He expects results to improve to $8.9-million on $130.3-million in revenue in fiscal 2026, down from his previous estimate of $9.7-million.

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