NasdaqGS:HLIT

Stock Analysis Report

Executive Summary

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

Rewards

Trading at 80.6% below its fair value

Earnings are forecast to grow 36.14% per year

Earnings have grown 6.1% per year over the past 5 years

Risk Analysis

Shareholders have been diluted in the past year



Snowflake Analysis

Adequate balance sheet with moderate growth potential.


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: HLIT has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.1%

HLIT

-1.3%

US Communications

1.5%

US Market


1 Year Return

23.3%

HLIT

-5.8%

US Communications

20.1%

US Market

Return vs Industry: HLIT exceeded the US Communications industry which returned -5.1% over the past year.

Return vs Market: HLIT exceeded the US Market which returned 20.1% over the past year.


Shareholder returns

HLITIndustryMarket
7 Day-0.1%-1.3%1.5%
30 Day-17.5%-3.7%1.4%
90 Day-13.8%3.7%8.7%
1 Year23.3%23.3%-3.8%-5.8%22.7%20.1%
3 Year18.8%18.8%33.1%25.0%50.1%40.5%
5 Year-14.3%-14.3%59.4%41.7%73.1%54.1%

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

Valuation

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

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: HLIT ($6.77) is trading below our estimate of fair value ($34.93)

Significantly Below Fair Value: HLIT is trading below fair value by more than 20%.


Price To Earnings Ratio

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

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


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: HLIT is overvalued based on its PB Ratio (2.5x) compared to the US Communications industry average (1.8x).


Next Steps

Future Growth

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

36.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HLIT is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.7%).

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

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

Revenue vs Market: HLIT's revenue (5.4% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: HLIT's revenue (5.4% 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


Next Steps

Past Performance

How has Harmonic performed over the past 5 years?

6.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HLIT is currently unprofitable.

Growing Profit Margin: HLIT is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: HLIT is unprofitable, but has reduced losses over the past 5 years at a rate of 6.1% per year.

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

Earnings vs Industry: HLIT is unprofitable, making it difficult to compare its past year earnings growth to the Communications industry (-25.2%).


Return on Equity

High ROE: HLIT has a negative Return on Equity (-2.35%), 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: HLIT's short term assets ($251.4M) exceed its short term liabilities ($148.5M).

Long Term Liabilities: HLIT's short term assets ($251.4M) exceed its long term liabilities ($186.4M).


Debt to Equity History and Analysis

Debt Level: HLIT's debt to equity ratio (46.2%) is considered high.

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


Balance Sheet

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

Debt Coverage by Assets: HLIT's debt is covered by short term assets (assets are 2.2x 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 HLIT has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: HLIT is unprofitable but has sufficient cash runway for more than 3 years, even with free cash flow being positive and shrinking by -34.1% per year.


Next Steps

Dividend

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


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage3.0%forecastin3Yearsn/a

Current dividend yield vs market & industry

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

High Dividend: Unable to evaluate HLIT'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 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.


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 HLIT's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

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

4.5yrs

Average management tenure


CEO

Patrick Harshman (54yo)

13.8yrs

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 ($USD2.34M) is about average for companies of similar size in the US market ($USD2.47M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Patrick Harshman
President13.8yrsUS$2.34m1.01% $6.3m
Sanjay Kalra
Senior VP2.7yrsUS$1.02m0.12% $776.7k
Neven Haltmayer
Senior Vice President of R&D - Video Business8.9yrsUS$965.14k0.19% $1.2m
Nimrod Ben-Natan
Senior VP & GM of Cable Access Business7.7yrsUS$1.24m0.27% $1.7m
Tim Warren
Chief Technology Officer of Video Business0yrsUS$904.51k0.36% $2.3m
Jean-Marc Guiot
Senior Vice President of Operations & IT1.1yrsno datano data
Timothy Chu
General Counsel6.3yrsno datano data
Crystèle Trevisan
Senior Vice President of Corporate Marketing & Communications1.1yrsno datano data
Shahar Bar
Senior Vice President of Video Products & Corporate Development0yrsno datano data
Eric Louvet
Senior VP of Global Sales & Video Services1yrsno data0.096% $596.7k

4.5yrs

Average Tenure

48.5yo

Average Age

Experienced Management: HLIT's management team is considered experienced (4.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Patrick Harshman
President13.8yrsUS$2.34m1.01% $6.3m
David Krall
Independent Director2yrsUS$204.66k0.016% $101.7k
Susan Swenson
Independent Director8yrsUS$182.00k0.17% $1.1m
Patrick Gallagher
Chairman of the Board6.8yrsUS$209.50k0.22% $1.3m
Nikos Theodosopoulos
Independent Director4.9yrsUS$187.00k0.13% $807.8k
Mitzi Reaugh
Independent Director7.6yrsUS$164.00k0.21% $1.3m
Deborah Clifford
Independent Director1.3yrsUS$169.81k0.011% $67.2k

6.8yrs

Average Tenure

56yo

Average Age

Experienced Board: HLIT's board of directors are considered experienced (6.8 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 4.6%.


Top Shareholders

Company Information

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


Key Information

  • Name: Harmonic Inc.
  • Ticker: HLIT
  • Exchange: NasdaqGS
  • Founded: 1988
  • Industry: Communications Equipment
  • Sector: Tech
  • Market Cap: US$621.994m
  • Shares outstanding: 91.88m
  • 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 services to consumer devices, including televisions, personal computers, laptops, tablets, and smart phones. The company operates in two segments, Video and Cable Access. The Video segment sells video processing, and 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. This segment’s video processing solutions include network management and application software, and hardware products, such as cloud media processing, broadcast and over-the-top encoders, contribution encoders, high-density transcoders and stream processing, multiscreen delivery, decoders and descramblers, and video servers. This segment also provides video-optimized storage systems; and unified video playout and processing software-as-a-service solutions. The Cable Access segment offers cable edge solutions and related services, including CableOS software-based cable access solutions; and narrowcast services gateway products primarily to cable operators. The company also provides technical support and professional services, such as maintenance and support, consulting, implementation, program management, technical design and planning, building and site preparation, integration and equipment installation, system testing, and training. Harmonic Inc. sells its products through its direct sales force, as well as through independent resellers and systems integrators. The company was founded in 1988 and is headquartered in San Jose, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/16 23:37
End of Day Share Price2020/02/14 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.