One-glance verdict
Overvalued
$4.45 our estimate vs market $7.14
Wall Street consensus: $16.00 (259.4% higher than our fair-value estimate)
60% above our estimate, beyond the bull case
Fundamentals snapshot
The LGL Group, Inc.
LGL · ASE · Technology · Scientific & Technical Instruments
Current price
$7.14
52-week range
$5.45 - $7.88
Market cap
$90.06M
Balance sheet
Healthy
22.64x Strong cushion
Net cash $45.16M. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
1 Risk
2 rewards · 1 risks
- Reward Revenue grew 9.5% last year.
- Reward Free cash flow was positive in 3/10 years.
- Risk Return on equity was -0.4% last year — the company lost money on shareholders' equity.
What this company does
The LGL Group, Inc.
The LGL Group builds highly specialized timing devices, which are essential for keeping things like computer networks, satellites, and telecommunication systems perfectly synchronized. The company's revenue (the total money earned from sales) comes from selling this equipment and from its investments in other businesses. This matters because our digital world increasingly relies on the precise timing LGL provides, creating a steady need for its products.
How the company got here
The LGL Group's story begins in 1917 as the Lynch Glass Machinery Company, a maker of glass-forming machinery. Over the decades, it evolved into a holding company (a company that owns other companies' stock), acquiring and operating businesses in various industries like precision engineering and manufacturing. A key moment was the 2022 spin-off (the creation of a new, independent company from a part of an existing one) of its M-tron Industries division. This move sharpened LGL's focus on its current structure, which combines a specialized technology business with an investment arm.
What it actually does
The LGL Group is essentially two businesses in one. A major part of the company designs and builds highly specialized equipment that controls the timing and frequency of electronic signals. Think of it as creating ultra-precise clocks that are essential for things like satellite communications, computer networks, and the electric power grid to work correctly. The other part of the company acts like an investment firm, using its available cash to buy into other businesses.
Electronic Instruments
This segment, which brings in the majority of the company's sales, operates through a subsidiary called Precise Time and Frequency (PTF). PTF manufactures high-performance instruments that provide extremely accurate time and frequency references. Customers in telecommunications, defense, and broadcasting pay for these devices because they are critical for synchronizing their complex systems. For example, a satellite ground station needs this technology to communicate with satellites without interruption.
Merchant Investment
This part of the company doesn't make a physical product but instead uses LGL's money to invest in other companies. It functions like a small investment fund, taking minority stakes (ownership of less than 50% of a company's stock) or forming partnerships with other businesses. The goal here is to generate returns from these investments, which can come from things like dividends (a share of a company's profits paid to its stockholders) or the increased value of the investment itself. This segment provides a way for the company to grow its capital outside of its main manufacturing operations.
What management is betting on now
Management is focused on growing the company by expanding its existing operations and acquiring new businesses, with a special emphasis on defense technology. They are actively looking for opportunities to invest in or buy companies that have valuable technology, particularly in areas like precision timing that are critical for national security. The strategy is to use their merchant investment arm to identify promising companies and build strategic partnerships. This approach aims to create long-term value by building a stronger, more diversified technology platform.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
Revenue
$1.15M
Net income
$-353.00K
Diluted EPS
-0.06
Operating cash flow
$-393.00K
Free cash flow
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Sources
Revenue
$1.08M
Net income
$-622.00K
Diluted EPS
-0.10
Operating cash flow
$501.00K
Free cash flow
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Sources
Revenue
$1.22M
Net income
$-27.00K
Diluted EPS
0.00
Operating cash flow
$-355.00K
Free cash flow
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Sources
Revenue
$1.11M
Net income
$772.00K
Diluted EPS
0.14
Operating cash flow
$275.00K
Free cash flow
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Sources
Revenue
$924.00K
Net income
$-51.00K
Diluted EPS
-0.01
Operating cash flow
$-190.00K
Free cash flow
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Sources
Revenue
$918.00K
Net income
$-6.00K
Diluted EPS
0.00
Operating cash flow
$340.00K
Free cash flow
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Sources
Revenue
$1.16M
Net income
$202.00K
Diluted EPS
0.04
Operating cash flow
$-17.00K
Free cash flow
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Sources
Revenue
$1.18M
Net income
$72.00K
Diluted EPS
0.01
Operating cash flow
$528.00K
Free cash flow
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Sources
Is it cheap or expensive?
Fair value $4.45 vs current price $7.14
Wall Street consensus is the average analyst price target: $16.00 (259.4% higher than our fair-value estimate).
Our most-likely fair value is $4.45 a share — about 37.6% below today's price of $7.14, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net cash $45.2M - more cash than debt. Interest coverage 22.6x.
Net debt
$-45.16M
Interest coverage
22.64x
The LGL Group, Inc.'s profit covers its interest bill about 22.6 times over. which is stronger than most peers shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
LGL
BASELINE
The LGL Group, Inc.
Total debt $0.00 Interest coverage 22.64x This is the baseline the peer rows are being compared against.
Total debt $132.00K Interest coverage 935.55x +4,033% vs LGL Carries about 41.3x more debt cushion than LGL.
Total debt $959.00K Interest coverage 1,989.00x +8,687% vs LGL Carries about 87.9x more debt cushion than LGL.
Total debt $10.93M Interest coverage -4.00x -100% vs LGL This peer has almost no interest-payment cushion compared with LGL.
What you should know
The case for and against LGL
2 Rewards
1 Risk
Rewards
-
Revenue grew 9.5% last year.
-
Free cash flow was positive in 3/10 years.
Risks
-
Return on equity was -0.4% last year — the company lost money on shareholders' equity.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
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Forward P/E
71.40x
P/B
1.03x
P/S
19.73x
EV/EBITDA
-48.52x
PEG ratio
9.33x
Profitability
How much profit each dollar creates
Gross margin
68.8%
Operating margin
-38.8%
Net margin
-5.0%
ROE
-0.4%
ROA
-1.3%
Health
Liquidity and balance-sheet strength
Debt / equity
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Current ratio
25.96x
Quick ratio
25.23x
Total debt
$0.00
Total cash
$45.16M
Growth
How the business has been compounding
Revenue TTM
$4.57M
Revenue 5Y CAGR
-38.0%
EPS TTM
-0.03
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$28.00K
Free CF TTM
$70.00K
FCF margin
1.5%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
1989-01-03