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Adtran Inc (ADTN)
NASDAQ:ADTN
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Adtran
(NASDAQ:ADTN)55Neutral
Positive Factors
Financial Performance
ADTN reported revenue and operating margin above consensus, indicating strong performance.
Market Position
Adtran should have improved its market position in the last quarter and customer acquisition continued to be successful, with 13 new customers in Optical Network alone.
Negative Factors
Outlook
Adtran published Q3 figures roughly in line with estimates and provided a weaker-than-expected outlook for the fourth quarter.
Adtran (ADTN) vs. S&P 500 (SPY)
Market Cap
$731.52M
Dividend YieldN/A
Average Volume (3M)1.36M
Price to Earnings (P/E)―
Beta (1Y)1.69
Revenue Growth-19.70%
EPS Growth-70.40%
CountryUS
Employees3,227
SectorTechnology
Sector Strength48
IndustryHardware & Equipment
Share Statistics
EPS (TTM)-5.69
Shares Outstanding79,860,030
10 Day Avg. Volume1,851,076
30 Day Avg. Volume1,364,925
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.79
Price to Cash Flow (P/CF)40.30
P/FCF Ratio11.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$14.00Price Target Upside52.84% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Adtran Business Overview & Revenue Model
Company DescriptionADTRAN, Inc. is a telecommunications company that provides networking and communications equipment. The company specializes in solutions that enable voice, data, video, and Internet communications across a range of network infrastructures. ADTRAN's products are utilized by a diverse customer base, including carriers, enterprises, and government organizations. The company's offerings cover a wide array of services such as network access, optical networking, and enterprise networking.
How the Company Makes MoneyADTRAN makes money by selling its networking and communication equipment to service providers, enterprises, and government entities. The company generates revenue from the sale of both hardware and software products, as well as services related to their implementation and maintenance. Key revenue streams include broadband access products, which support high-speed Internet services, and optical networking solutions that facilitate data transmission over fiber-optic cables. Additionally, ADTRAN benefits from recurring revenue through service contracts and software subscriptions. The company may also engage in strategic partnerships with other technology firms to expand its market reach and enhance its product offerings.
Adtran Financial Statement Overview
Summary
Adtran's financials reveal considerable challenges, with ongoing losses, declining revenues, and a balance sheet showing zero stockholders' equity, indicating potential solvency issues. Despite improved operating cash flow, negative free cash flow growth and operational inefficiencies persist.Income Statement
Adtran's income statement reveals declining revenue over the past year with a negative net profit margin, indicating ongoing losses. The gross profit margin is modest, but EBIT and EBITDA margins are negative, reflecting operational inefficiencies. Revenue growth is negative, showing a concerning downtrend which poses a significant challenge for future profitability.35
Negative
Balance Sheet
The balance sheet shows a worrying situation with zero stockholders' equity in the latest period, indicating potential solvency issues. Total liabilities have decreased, but with no equity, the debt-to-equity ratio cannot be calculated, suggesting financial instability. The absence of debt is a positive, but overall financial health appears weak.40
Negative
Cash Flow
Cash flow analysis shows some recovery in operating cash flow, turning positive in the latest year, but free cash flow growth remains negative. The operating cash flow to net income ratio indicates better cash generation compared to net losses, yet free cash flow remains under pressure, highlighting cash management challenges.45
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 618.79M | 922.72M | 1.15B | 1.03B | 563.00M | 506.51M | Gross Profit |
| 218.93M | 330.31M | 333.06M | 327.25M | 218.38M | 217.55M | EBIT |
| -11.93M | -124.52M | -156.28M | -38.75M | -8.03M | -11.03M | EBITDA |
| 1.54M | -319.23M | -96.06M | 3.93M | 9.81M | 10.39M | Net Income Common Stockholders |
| -13.60M | -450.87M | -267.69M | -8.89M | -8.63M | 2.38M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 77.57M | 77.57M | 87.17M | 108.98M | 56.95M | 63.29M | Total Assets |
| 1.18B | 178.03M | 1.68B | 1.88B | 569.02M | 518.94M | Total Debt |
| 25.93M | 215.50M | 226.42M | 143.34M | 5.00M | 5.38M | Net Debt |
| -51.64M | 137.93M | 139.25M | 34.70M | -51.60M | -54.78M | Total Liabilities |
| 620.91M | 622.01M | 636.93M | 578.25M | 211.91M | 145.99M | Stockholders Equity |
| 134.41M | 134.41M | 593.82M | 994.54M | 357.10M | 372.94M |
| Cash Flow | Free Cash Flow | ||||
| -27.87M | 70.62M | -88.72M | -62.00M | -2.66M | -22.93M | Operating Cash Flow |
| -21.12M | 103.07M | -45.60M | -43.55M | 3.01M | -16.52M | Investing Cash Flow |
| 16.78M | -62.21M | -32.20M | 55.00M | 10.27M | 41.40M | Financing Cash Flow |
| -16.24M | -50.01M | 58.87M | 46.87M | -12.96M | -42.98M |
Adtran Technical Analysis
Neutral
9.16
Price Trends
10.19
Negative
8.85
Positive
7.18
Positive
Market Momentum
-0.13
Positive
31.43
Neutral
11.71
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ADTN, the sentiment is Neutral. The current price of 9.16 is below the 20-day moving average (MA) of 10.85, below the 50-day MA of 10.19, and above the 200-day MA of 7.18, indicating a neutral trend. The MACD of -0.13 indicates Positive momentum. The RSI at 31.43 is Neutral, neither overbought nor oversold. The STOCH value of 11.71 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ADTN.
Adtran Risk Analysis
Adtran disclosed 47 risk factors in its most recent earnings report. Adtran reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Adtran Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $105.13B | 37.45 | 33.14% | ― | 19.50% | 34.64% | |
74 Outperform | $254.37B | 28.02 | 20.02% | 2.50% | -5.34% | -30.57% | |
68 Neutral | $9.76B | 120.07 | 2.96% | ― | -8.47% | -66.16% | |
60 Neutral | $12.01B | 41.91 | 6.21% | 2.44% | -8.82% | -10.01% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% | |
55 Neutral | $731.52M | ― | -123.20% | ― | -19.70% | -70.40% | |
44 Neutral | $1.97B | ― | -152.77% | ― | -24.49% | -250.61% |
* Technology Sector Average
Performance Comparison
ADTN
Adtran
9.16
3.08
50.66%
CIEN
Ciena
68.93
17.39
33.74%
CSCO
Cisco Systems
63.94
15.26
31.35%
EXTR
Extreme Networks
14.85
2.94
24.69%
JNPR
Juniper Networks
36.06
-0.06
-0.17%
ANET
Arista Networks
83.36
15.60
23.02%
Adtran Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: -13.67% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
ADTRAN demonstrated strong revenue growth and financial improvements, particularly in optical networking and cash flow, but faces challenges in subscriber solutions and inventory management. The outlook is cautiously optimistic, with some uncertainties in margin expectations.Highlights
Revenue Growth Across All Regions
ADTRAN reported a sequential revenue increase of 7% to $242.9 million, with non-U.S. revenue up 10% quarter-over-quarter. Year-over-year, revenue increased by 8%.
Optical Networking Revenue Surge
Optical networking revenue grew by 16% sequentially, adding 18 new customers, including government agencies and large enterprises.
Improved Financial Health
The non-GAAP gross margin expanded to 41.9% for the year, and the company turned a positive non-GAAP operating profit for 2024. Operating cash flow improved significantly to $104.3 million from a negative $45.6 million in 2023.
New Product Introductions
ADTRAN plans to introduce new multi-Gig Wi-Fi 7 products over the next 6 months to drive demand.
Lowlights
Subscriber Solutions Revenue Decline
Subscriber solutions revenue decreased by 2% sequentially, although it followed two quarters of strong growth.
Challenges with Inventory Management
The company aims to reduce inventory levels significantly, targeting improved inventory turns up to 4x from the current 2.2x.
Non-GAAP Operating Margin Concerns
Guidance for Q1 2025 shows a non-GAAP operating margin between 0% and 4%, indicating potential margin pressures.
Company Guidance
During the ADTRAN Holdings Fourth Quarter 2024 Financial Results Conference Call, the company provided guidance for the first quarter of 2025, anticipating revenue between $237.5 million and $252.5 million and a non-GAAP operating margin ranging from 0% to 4%. The fourth quarter of 2024 saw a sequential revenue increase of 7% to $242.9 million, with non-U.S. revenue growing by 10%. The company reported a non-GAAP gross margin of 42.0% and non-GAAP operating profit of $7.9 million, or 3.3% of revenue. Network solutions contributed 81% to total revenue, while services and support accounted for 19%. Optical networking solutions saw a 16% sequential increase, and access and aggregation solutions grew by 8%. ADTRAN highlighted a strong cash flow from operating activities, with net cash provided improving to $104.3 million for the year, and a free cash flow of $39.9 million. The company remains optimistic about future growth opportunities, citing advancements in its portfolio and an improving industry environment.Adtran Corporate Events
Business Operations and StrategyFinancial Disclosures
Adtran Reports Q4 2024 Revenue Growth and Positive Outlook
Positive
Feb 27, 2025
ADTRAN Holdings, Inc. announced its preliminary unaudited financial results for the fourth quarter and full-year 2024, reporting revenue of $242.9 million, a 7% sequential increase, and improved operating margins. The company experienced positive momentum due to increased service provider spending and a shift away from high-risk vendors, leading to growth across geographies and product lines. Looking ahead, ADTRAN expects higher revenue in the first quarter of 2025, overcoming typical seasonality, with revenue projected between $237.5 million and $252.5 million.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.