Lantronix. Buy, Sell or Hold?

In his Jan. 21 earnings preview, Roth Capital Markets analyst Scott Searle reiterated a “Buy” rating on Lantronix (Lantronix Stock Quote, Chart, News, Analysts, Financials NASDAQ:LTRX) and maintained his 12-month price target of $9.00.

Lantronix is an Irvine, California-based provider of networking, edge compute, and IoT connectivity solutions used to access, manage, and monitor mission-critical infrastructure across industrial, enterprise, and government markets.

Searle said recent developments, including CES and rising U.S. defence spending, continue to support a favourable long-term outlook, even as he modestly adjusted near-term revenue expectations following last fall’s 45-day U.S. federal government shutdown. He estimates the shutdown deferred roughly $2.5-million of revenue across three quarters but said the company’s strategic positioning continues to improve.

“CES combined with recent macro events continues to paint a favourable long-term outlook for LTRX,” Searle said, adding that the company remains well-positioned as an enabler of mission-critical infrastructure.

The analyst highlighted accelerating momentum in drones as a key near-term driver, with a longer-term pathway into robotics. Searle said Lantronix is seeing growing engagement around Qualcomm’s DragonWing platform, which he believes offers a power-efficiency advantage in inference-driven edge AI applications such as video analytics. Active drone engagements have now expanded to more than 17 manufacturers, up from 10 in the June quarter. He said management remains comfortable with FY26 drone revenue of $5-million to $10-million, with further ramp expected into FY27.

“Drone momentum continues to build and offers a clear migration path to robotics,” Searle said, noting that edge compute and visual AI capabilities should open opportunities across robotics, defence, law enforcement, and other commercial markets over time.

Searle also pointed to expanding annual recurring revenue opportunities tied to infrastructure monitoring. He highlighted a large deployment to equip and monitor more than 50,000 cell-site generators for a major U.S. Tier-1 wireless carrier, which he estimates could translate into $6-million+ of high-margin recurring revenue at full deployment, excluding one-time hardware sales. He added that Kompress.ai, Lantronix’s AI-enabled compressor monitoring platform, is tracking to early expectations and appears poised to expand geographically.

While trimming his near-term outlook, Searle said valuation remains attractive, with Lantronix trading at sub-2.0x EV/FY26E sales, well below peers with more established recurring-revenue models.

Searle now expects Lantronix to generate Adjusted EBITDA of $8.0-million on revenue of $124.1-million in fiscal 2026, revised from prior estimates, improving to Adjusted EBITDA of $16.2-million on revenue of $144.3-million in fiscal 2027.

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