Advanced Connectivity Will Spur Global IoT Infrastructure Expansion

Published
08 Apr 25
Updated
15 Aug 25
AnalystConsensusTarget's Fair Value
US$7.50
40.0% undervalued intrinsic discount
15 Aug
US$4.50
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1Y
-40.2%
7D
1.8%

Author's Valuation

US$7.5

40.0% undervalued intrinsic discount

AnalystConsensusTarget Fair Value

Last Update08 Aug 25
Fair value Increased 7.14%

The upward revision in Airgain’s price target reflects stronger consensus revenue growth forecasts and a sharply reduced future P/E, raising fair value from $7.00 to $7.50.


What's in the News


  • Issued Q3 sales guidance of $13.0M to $15.0M, a midpoint net loss per share of $0.14, gross margin between 41.4% and 44.4%, and net loss of $1.7M.
  • Secured deal with a major Midwest electric utility to deploy AirgainConnect Fleet in about one third of its line truck fleet, highlighting robust field performance and multi-carrier eSIM capability.
  • Launched NimbeLink Skywire Cat 1 bis Embedded Modem, enabling pre-certified, cost-effective, and globally compatible industrial IoT connectivity.
  • Released AirgainConnect Go-Kit Pro, a compact, rugged rapid-response 5G connectivity kit for mission-critical field teams, with multi-network support and 15-hour battery life.
  • Completed a $4.5M at-the-market follow-on equity offering through issuance of common stock at prices ranging from $5.15 to $9.20 per share.

Valuation Changes


Summary of Valuation Changes for Airgain

  • The Consensus Analyst Price Target has risen from $7.00 to $7.50.
  • The Future P/E for Airgain has significantly fallen from 17.37x to 0.00x.
  • The Consensus Revenue Growth forecasts for Airgain has significantly risen from 7.8% per annum to 10.8% per annum.

Key Takeaways

  • Expansion into advanced connectivity and IoT markets is fueling robust growth and improving long-term earnings visibility through increased adoption of Airgain's platforms.
  • Transitioning to high-margin, platform-based solutions and deepening customer relationships are structurally enhancing profitability and recurring revenue potential.
  • Delayed customer certifications and weak legacy segments threaten Airgain's revenue stability, while failed new platform adoption and expense shifts risk further operating losses and margin deterioration.

Catalysts

About Airgain
    Provides wireless connectivity solutions that offers embedded components, external antennas, and integrated systems worldwide.
What are the underlying business or industry changes driving this perspective?
  • Ongoing adoption of advanced connectivity standards (e.g., Wi-Fi 7, 5G, eSIM) across consumer, enterprise, and public safety markets is driving a wave of device and infrastructure upgrades, directly benefiting Airgain's new product lines and supporting robust revenue growth as certification and deployment cycles conclude through 2026.
  • Rising global digital infrastructure investment-including utility grid modernization, smart cities, and industrial IoT-creates multi-year demand tailwinds for Airgain's IoT modems and integrated platforms (AC-Fleet and Lighthouse), boosting both top-line growth and long-term earnings visibility.
  • Investments in and growing traction for the AirgainConnect (AC-Fleet) and Lighthouse platforms position the company to transition from a low-margin hardware supplier to a higher-margin, platform-driven solutions provider, which is expected to structurally enhance company-wide gross margins and net profitability.
  • Deepening relationships with Tier 1 and Tier 2 customers, expanding sales pipelines, and multiple new certification milestones (e.g., AT&T FirstNet, T-Mobile, Verizon, and Europe) are poised to unlock larger-scale government and utility opportunities, potentially delivering step-change increases in recurring revenues and earnings as platform deployments scale.
  • Operational discipline, realignment of expenses from legacy products to growth platforms, and measured international expansion position Airgain to achieve near-term positive earnings while setting up for long-term, sustained revenue and profitability expansion as growth platforms mature and industry adoption accelerates.

Airgain Earnings and Revenue Growth

Airgain Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?
  • Analysts are assuming Airgain's revenue will grow by 10.8% annually over the next 3 years.
  • Analysts are not forecasting that Airgain will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Airgain's profit margin will increase from -11.9% to the average US Electronic industry of 9.0% in 3 years.
  • If Airgain's profit margin were to converge on the industry average, you could expect earnings to reach $6.9 million (and earnings per share of $0.53) by about August 2028, up from $-6.7 million today. The analysts are largely in agreement about this estimate.
  • In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 17.9x on those 2028 earnings, up from -8.2x today. This future PE is lower than the current PE for the US Electronic industry at 24.2x.
  • Analysts expect the number of shares outstanding to grow by 5.32% per year for the next 3 years.
  • To value all of this in today's terms, we will use a discount rate of 8.31%, as per the Simply Wall St company report.

Airgain Future Earnings Per Share Growth

Airgain Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?
  • Airgain's ability to generate significant revenue growth in its new platform segments (AirgainConnect and Lighthouse) is highly dependent on lengthy customer certification and deployment cycles-especially for Tier 1 and Tier 2 customers, which can take up to 18 months or longer, making timing of meaningful earnings contribution uncertain and exposing future revenue and profit growth to delays or failed conversions.
  • The company is experiencing ongoing softness and inventory overhang in key legacy segments such as automotive aftermarket and asset tracking, with little visibility to recovery, which may continue to weigh on overall revenue stability and margin performance.
  • Despite operational discipline, Airgain continues to post operating losses, with positive adjusted EBITDA and EPS projections hinging on stable existing markets and highly uncertain early platform contributions; persistent operating losses or failed scaling efforts could undermine long-term earnings and R&D investment capacity.
  • Airgain's increased investment in sales, marketing, and engineering for new growth platforms is being offset by significant expense reductions in legacy product lines; if new platforms do not ramp as anticipated, this expense realignment could expose the company to deteriorating gross margins and operating leverage.
  • The company's broad reliance on certification processes by third-party carriers and government agencies (which have already experienced unexpected delays) creates risk of further setbacks due to regulatory, technical, or customer-specific hurdles-potentially resulting in missed revenue opportunities and unpredictable cash flow.

Valuation

How have all the factors above been brought together to estimate a fair value?
  • The analysts have a consensus price target of $7.5 for Airgain based on their expectations of its future earnings growth, profit margins and other risk factors.
  • In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $77.2 million, earnings will come to $6.9 million, and it would be trading on a PE ratio of 17.9x, assuming you use a discount rate of 8.3%.
  • Given the current share price of $4.66, the analyst price target of $7.5 is 37.9% higher.
  • We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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