DAKTRONICS Inc. - DAKT

The bulls make their case for $40

Shares of DAKT first crossed my screens back in 2006 or almost a couple of decades ago, back when the shares were heading for their first moonshot. DAKT are the folks behind some of the major video displays that you see in sports stadiums across the country (along with much more pedestrian video displays you might find on billboards, road signs, or even in gas stations), and I seem to remember at the time that there was some major excitement brewing around some new sports stadium projects and what that could possibly mean to DAKT.

At the start of 2005 the company was doing maybe $50M in quarterly revenues and only had $53M, or a quarter’s worth, in backlog, while a short 6 quarters later revenues had almost doubled to $92M with a growing backlog of $123M. If you look back on a long-term chart of the shares, that was the absolute peak of the excitement.

It was not, however, the end of the company’s revenue ramp. Over the course of the next couple of years, quarterly revenues would continue to climb further, going from $123M at the end of 2006 (post bubble burst and beginning of the decline) to $170M at the end of 2008, while the backlog during this time typically hovered in the $110M - $130M range. While there were certainly other events happening at the end of 2008 that had the attention of investors, when the DAKT backlog appeared to be topping out or even retreating, investors appeared ready to head for the exits and move on to the next story.

That is where this story begins…