What Happened?

Shares of electronics distributor Richardson Electronics (NASDAQ:RELL) fell 12.3% in the afternoon session after the company reported underwhelming fourth-quarter (fiscal Q2 2025) results. Its revenue missed significantly, and its EBITDA fell short of Wall Street's estimates. Management attributed the weakness to a 22% decline in Healthcare sales due to lower CT tube, system, and parts demand. Overall, this was a challenging quarter.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Richardson Electronics? Access our full analysis report here, it’s free.

What The Market Is Telling Us

Richardson Electronics’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. But moves this big are rare even for Richardson Electronics and indicate this news significantly impacted the market’s perception of the business.

Richardson Electronics is down 9.9% since the beginning of the year, and at $12.75 per share, it is trading 14.3% below its 52-week high of $14.87 from January 2025. Investors who bought $1,000 worth of Richardson Electronics’s shares 5 years ago would now be looking at an investment worth $2,062.

Today’s young investors likely haven’t read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.