Advanced Connectivity Will Spur Global IoT Infrastructure Expansion

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

Provides wireless connectivity solutions that offers embedded components, external antennas, and integrated systems worldwide.

• 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 Future Earnings and Revenue Growth

Assumptions

• 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 $7.0 million (and earnings per share of $0.54) by about September 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 17.7x on those 2028 earnings, up from -7.5x today. This future PE is lower than the current PE for the US Electronic industry at 23.1x.
• Analysts expect the number of shares outstanding to grow by 4.92% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 8.3%, as per the Simply Wall St company report.

Airgain Future Earnings Per Share Growth

Risks

• 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

• 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 $7.0 million, and it would be trading on a PE ratio of 17.7x, assuming you use a discount rate of 8.3%.
• Given the current share price of $4.22, the analyst price target of $7.5 is 43.7% 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.