Harmonic (NasdaqGS:HLIT) - Share price, News & Analysis

HLIT fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	4/6
Past Performance	3/6
Financial Health	4/6
Dividends	0/6

HLIT Stock Overview

Harmonic Inc., together with its subsidiaries, provide video delivery software, products, system solutions, and services worldwide.

Rewards

Earnings are forecast to grow 43.87% per year

Became profitable this year

Risk Analysis

Significant insider selling over the past 3 months

Shareholders have been diluted in the past year

Harmonic Competitors

Digi International

NasdaqGS:DGII

US$1.2b

Radware

NasdaqGS:RDWR

US$977.5m

AudioCodes

NasdaqGS:AUDC

US$731.8m

Extreme Networks

NasdaqGS:EXTR

US$1.8b

Price History & Performance

Summary of all time highs, changes and price drops for Harmonic
Historical stock prices
Current Share Price	US$11.32
52 Week High	US$12.22
52 Week Low	US$8.25
Beta	1.02
1 Month Change	13.31%
3 Month Change	21.72%
1 Year Change	15.16%
3 Year Change	72.56%
5 Year Change	245.65%
Change since IPO	56.81%

Shareholder Returns

	HLIT	US Communications	US Market
7D	0.9%	6.4%	1.4%
1Y	15.2%	-6.5%	-8.4%

Return vs Industry: HLIT exceeded the US Communications industry which returned -6.5% over the past year.

Return vs Market: HLIT exceeded the US Market which returned -8.4% over the past year.

Price Volatility

Is HLIT's price volatile compared to industry and market?
HLIT volatility
HLIT Average Weekly Movement	5.1%
Communications Industry Average Movement	8.3%
Market Average Movement	7.6%
10% most volatile stocks in US Market	17.1%
10% least volatile stocks in US Market	3.1%

Stable Share Price: HLIT is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: HLIT's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1988	1,299	Patrick Harshman	https://www.harmonicinc.com

Harmonic Inc., together with its subsidiaries, provide video delivery software, products, system solutions, and services worldwide. The company operates in two segments, Video and Cable Access. The Video segment sells video processing, production, and playout solutions and services to cable operators, and satellite and telecommunications Pay-TV service providers, as well as to broadcast and media, including streaming media companies.

Harmonic Fundamentals Summary

How do Harmonic's earnings and revenue compare to its market cap?
HLIT fundamental statistics
Market Cap	US$1.19b
Earnings (TTM)	US$34.70m
Revenue (TTM)	US$587.01m

34.3x

P/E Ratio

2.0x

P/S Ratio

Is HLIT overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
HLIT income statement (TTM)
Revenue	US$587.01m
Cost of Revenue	US$291.01m
Gross Profit	US$296.00m
Other Expenses	US$261.30m
Earnings	US$34.70m

Last Reported Earnings

Jul 01, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.33
Gross Margin	50.43%
Net Profit Margin	5.91%
Debt/Equity Ratio	56.2%

How did HLIT perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is HLIT undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for HLIT?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for HLIT. This is calculated by dividing HLIT's market cap by their current preferred multiple.
What is HLIT's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$1.19b

HLIT key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	2.2x
Enterprise Value/EBITDA	24x
PEG Ratio	0.8x

Price to Earnings Ratio vs Peers

How does HLIT's PE Ratio compare to its peers?

HLIT PE Ratio vs Peers

The above table shows the PE ratio for HLIT vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	78.6x
DGII Digi International	95.3x	76.3%	US$1.2b
RDWR Radware	155.3x	n/a	US$977.5m
AUDC AudioCodes	23.6x	13.4%	US$731.8m
EXTR Extreme Networks	40.3x	n/a	US$1.8b
HLIT Harmonic	34.3x	43.9%	US$1.2b

Price-To-Earnings vs Peers: HLIT is good value based on its Price-To-Earnings Ratio (34.3x) compared to the peer average (78.6x).

Price to Earnings Ratio vs Industry

How does HLIT's PE Ratio compare vs other companies in the US Communications Industry?

Price-To-Earnings vs Industry: HLIT is expensive based on its Price-To-Earnings Ratio (34.3x) compared to the US Communications industry average (24x)

Price to Earnings Ratio vs Fair Ratio

What is HLIT's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

HLIT PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	34.3x
Fair PE Ratio	32.8x

Price-To-Earnings vs Fair Ratio: HLIT is expensive based on its Price-To-Earnings Ratio (34.3x) compared to the estimated Fair Price-To-Earnings Ratio (32.8x).

Share Price vs Fair Value

What is the Fair Price of HLIT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: Insufficient data to calculate HLIT's fair value for valuation analysis.

Significantly Below Fair Value: Insufficient data to calculate HLIT's fair value for valuation analysis.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

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Future Growth

How is Harmonic forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

43.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: HLIT's forecast earnings growth (43.9% per year) is above the savings rate (1.9%).

Earnings vs Market: HLIT's earnings (43.9% per year) are forecast to grow faster than the US market (14.4% per year).

High Growth Earnings: HLIT's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: HLIT's revenue (14.4% per year) is forecast to grow faster than the US market (7.8% per year).

High Growth Revenue: HLIT's revenue (14.4% 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 HLIT's Return on Equity is forecast to be high in 3 years time

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Past Performance

How has Harmonic performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

59.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: HLIT has high quality earnings.

Growing Profit Margin: HLIT became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: HLIT has become profitable over the past 5 years, growing earnings by 59.9% per year.

Accelerating Growth: HLIT has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: HLIT has become profitable in the last year, making it difficult to compare its past year earnings growth to the Communications industry (20.7%).

Return on Equity

High ROE: HLIT's Return on Equity (11.7%) is considered low.

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Financial Health

How is Harmonic's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: HLIT's short term assets ($338.4M) exceed its short term liabilities ($222.0M).

Long Term Liabilities: HLIT's short term assets ($338.4M) exceed its long term liabilities ($179.6M).

Debt to Equity History and Analysis

Debt Level: HLIT's net debt to equity ratio (15.2%) is considered satisfactory.

Reducing Debt: HLIT's debt to equity ratio has increased from 53.2% to 56.2% over the past 5 years.

Debt Coverage: HLIT's debt is not well covered by operating cash flow (10.1%).

Interest Coverage: HLIT's interest payments on its debt are well covered by EBIT (4.9x coverage).

Balance Sheet

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Dividend

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

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

Dividend Yield vs Market

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

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

Stability and Growth of Payments

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

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

Earnings Payout to Shareholders

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

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as HLIT has not reported any payouts.

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Management

How experienced are the management team and are they aligned to shareholders interests?

5.6yrs

Average management tenure

CEO

Patrick Harshman (57 yo)

16.25yrs

Tenure

US$4,628,135

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 ($USD4.63M) is about average for companies of similar size in the US market ($USD3.90M).

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

Leadership Team

Experienced Management: HLIT's management team is seasoned and experienced (5.6 years average tenure).

Board Members

Experienced Board: HLIT's board of directors are considered experienced (7.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: HLIT insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 3.2%.

Data	Last Updated (UTC time)
Company Analysis	2022/08/19 00:00
End of Day Share Price	2022/08/19 00:00
Earnings	2022/07/01
Annual Earnings	2021/12/31