DB:HMC

Stock Analysis Report

Executive Summary

Harmonic Inc. designs, manufactures, and sells video infrastructure products and system solutions worldwide.

Snowflake

Fundamentals

Reasonable growth potential with adequate balance sheet.


Similar Companies

Share Price & News

How has Harmonic's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: HMC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.4%

HMC

4.2%

DE Communications

0.03%

DE Market


1 Year Return

33.8%

HMC

1.7%

DE Communications

9.9%

DE Market

Return vs Industry: HMC exceeded the German Communications industry which returned 1.7% over the past year.

Return vs Market: HMC exceeded the German Market which returned 9.9% over the past year.


Shareholder returns

HMCIndustryMarket
7 Day-1.4%4.2%0.03%
30 Day18.6%4.0%4.4%
90 Day17.2%17.8%13.6%
1 Year33.8%33.8%2.3%1.7%13.4%9.9%
3 Year62.4%62.4%7.8%6.9%25.6%14.6%
5 Year32.2%32.2%62.6%59.8%36.9%18.2%

Price Volatility Vs. Market

How volatile is Harmonic's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Harmonic undervalued compared to its fair value and its price relative to the market?

2.96x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: Insufficient data to calculate HMC's fair value to establish if it is undervalued.

Significantly Below Fair Value: Insufficient data to calculate HMC's fair value to establish if it is undervalued.


Price To Earnings Ratio

PE vs Industry: HMC is unprofitable, so we can't compare its PE Ratio to the Communications industry average.

PE vs Market: HMC is unprofitable, so we can't compare its PE Ratio to the German market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate HMC's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: HMC is overvalued based on its PB Ratio (3x) compared to the DE Communications industry average (2.4x).


Next Steps

Future Growth

How is Harmonic forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

89.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HMC is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (0.2%).

Earnings vs Market: HMC is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: HMC's is expected to become profitable in the next 3 years.

Revenue vs Market: HMC's revenue (11.8% per year) is forecast to grow faster than the German market (4.8% per year).

High Growth Revenue: HMC's revenue (11.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if HMC's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Harmonic performed over the past 5 years?

1.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HMC has large one-off items impacting its financial results.

Growing Profit Margin: HMC's current net profit margins (-2.1%) are higher than last year (-9.3%).


Past Earnings Growth Analysis

Earnings Trend: HMC is unprofitable, but has reduced losses over the past 5 years at a rate of 1.1% per year.

Accelerating Growth: Unable to compare HMC's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: HMC is unprofitable, making it difficult to compare its past year earnings growth to the Communications industry (21.6%).


Return on Equity

High ROE: HMC has a negative Return on Equity (-3.39%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Harmonic's financial position?


Financial Position Analysis

Short Term Liabilities: HMC's short term assets ($236.9M) exceeds its short term liabilities ($146.5M)

Long Term Liabilities: HMC's short term assets (236.9M) exceeds its long term liabilities (180.7M)


Debt to Equity History and Analysis

Debt Level: HMC's debt to equity ratio (61.2%) is considered high

Reducing Debt: Insufficient data to determine if HMC's debt to equity ratio has reduced over the past 5 years.


Balance Sheet

Inventory Level: HMC has a low level of unsold assets or inventory.

Debt Coverage by Assets: HMC's debt is covered by short term assets (assets are 1.6x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable HMC has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: HMC is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 97.9% per year.


Next Steps

Dividend

What is Harmonic's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.3%markettop25%3.7%industryaverage3.2%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate HMC's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate HMC's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if HMC's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if HMC's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of HMC's dividend in 3 years as they are not forecast to pay a notable one for the German market.


Next Steps

Management

What is the CEO of Harmonic's salary, the management and board of directors tenure and is there insider trading?

6.1yrs

Average management tenure


CEO

Patrick Harshman (54yo)

13.5yrs

Tenure

US$2,343,074

Compensation

Dr. Patrick J. Harshman has been the Chief Executive Officer and President of Harmonic Inc. since May 4, 2006. Dr. Harshman has driven Harmonic’s strategic re-positioning as the worldwide leader in video d ...


CEO Compensation Analysis

Compensation vs Market: Patrick's total compensation ($USD2.34M) is above average for companies of similar size in the German market ($USD1.18M).

Compensation vs Earnings: Patrick's compensation has been consistent with company performance over the past year.


Management Age and Tenure

6.1yrs

Average Tenure

51yo

Average Age

Experienced Management: HMC's management team is seasoned and experienced (6.1 years average tenure).


Board Age and Tenure

6.6yrs

Average Tenure

56yo

Average Age

Experienced Board: HMC's board of directors are considered experienced (6.6 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 4.9%.


Management Team

  • Patrick Harshman (54yo)

    President

    • Tenure: 13.5yrs
    • Compensation: US$2.34m
  • Jeremy Rosenberg

    Senior Vice President of Business Development

    • Tenure: 2.8yrs
  • Neven Haltmayer (54yo)

    Senior Vice President of R&D - Video Business

    • Tenure: 8.7yrs
    • Compensation: US$965.14k
  • Nimrod Ben-Natan (51yo)

    Senior VP & GM of Cable Access Business

    • Tenure: 7.4yrs
    • Compensation: US$1.24m
  • Tim Chu (46yo)

    General Counsel

    • Tenure: 6.1yrs
  • Shahar Bar

    Senior Vice President of Video Products & Corporate Development

    • Tenure: 0yrs
  • Sanjay Kalra (46yo)

    Senior VP

    • Tenure: 2.4yrs
    • Compensation: US$1.02m
  • Eric Louvet

    Senior VP of Global Sales & Video Services

    • Tenure: 0.8yrs

Board Members

  • David Krall (59yo)

    Independent Director

    • Tenure: 1.8yrs
    • Compensation: US$204.66k
  • Susan Swenson (70yo)

    Independent Director

    • Tenure: 7.8yrs
    • Compensation: US$182.00k
  • Patrick Harshman (54yo)

    President

    • Tenure: 13.5yrs
    • Compensation: US$2.34m
  • Pat Gallagher (64yo)

    Chairman of the Board

    • Tenure: 6.6yrs
    • Compensation: US$209.50k
  • Nikos Theodosopoulos (56yo)

    Independent Director

    • Tenure: 4.7yrs
    • Compensation: US$187.00k
  • Mitzi Reaugh (41yo)

    Independent Director

    • Tenure: 7.3yrs
    • Compensation: US$164.00k
  • Debbie Clifford (45yo)

    Independent Director

    • Tenure: 1.1yrs
    • Compensation: US$169.81k

Company Information

Harmonic Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Harmonic Inc.
  • Ticker: HMC
  • Exchange: DB
  • Founded: 1988
  • Industry: Communications Equipment
  • Sector: Tech
  • Market Cap: US$713.711m
  • Listing Market Cap: US$646.051m
  • Shares outstanding: 90.34m
  • Website: https://www.harmonicinc.com

Number of Employees


Location

  • Harmonic Inc.
  • 4300 North First Street
  • San Jose
  • California
  • 95134
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
HLITNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDMay 1995
HMCDB (Deutsche Boerse AG)YesCommon StockDEEURMay 1995
0J38LSE (London Stock Exchange)YesCommon StockGBUSDMay 1995

Biography

Harmonic Inc. designs, manufactures, and sells video infrastructure products and system solutions worldwide. Its products enable customers to create, prepare, and deliver a range of video and broadband ser ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/16 20:35
End of Day Share Price2019/11/15 00:00
Earnings2019/09/27
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.