Adtran (ADTN) AI Stock Analysis

• Market Cap: $656.49M
• Dividend Yield: N/A
• Average Volume (3M): 1.36M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.76
• Revenue Growth: -19.70%
• EPS Growth: -70.40%
• Country: US
• Employees: 3,091
• Sector: Technology
• Sector Strength: 40
• Industry: Communication Equipment
• EPS (TTM): -5.69
• Shares Outstanding: 79,962,030
• 10 Day Avg. Volume: 1,200,840
• 30 Day Avg. Volume: 1,356,824
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.80
• Price to Cash Flow (P/CF): 40.50
• P/FCF Ratio: 11.20
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $14.00
• Price Target Upside: 85.68% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

Adtran faces substantial financial challenges with consistent losses and a concerning balance sheet. While recent earnings call data showed revenue growth and improved cash flow, operational inefficiencies and margin pressures remain significant hurdles. Technical indicators suggest caution, and valuation metrics are unappealing due to negative earnings. Despite some positive developments, the overall risk profile remains high.

Positive Factors

Cost Management

Q3 profitability improved despite lower top line due to the successful implementation of cost-efficiency measures.

Financial Performance

ADTN reported revenue and operating margin above consensus, indicating strong performance.

Negative Factors

Outlook

Adtran published Q3 figures roughly in line with our estimates and provided a weaker-than-expected outlook for the fourth quarter.

Regulatory Uncertainty

Uncertainty is rising about BEAD timing given the U.S. election.

Adtran Business Overview & Revenue Model

Company Description

ADTRAN Holdings, Inc., through its subsidiaries, provides end-to-end fiber networking solutions for communications service provider, enterprises, and government customers in the United States, Germany, the United Kingdom, Mexico, and internationally. It operates through two segments, Network Solutions, and Services & Support. The company offers fiber access and fiber to the node platforms; transceivers, cables, and other miscellaneous materials; passive optical network optical line terminals; fiber to the distribution point Gfast distribution point units; cabinet and outside plant enclosures and services; packet optical transports; fixed wireless access platforms; and network management and subscriber services, and control and orchestration software. It also provides broadband customer premises solutions, ethernet switches and routers, residential gateways, cloud-based software-as-a-service management platforms, virtual wireless local area networks, Internet of Things gateways, pre-sale and post-sale technical support, and multi-gigabit mesh Wi-Fi gateways. In addition, the company offers time division multiplexed and asynchronous transfer mode-based aggregation systems and customer devices; and high-bit-rate and asymmetric digital subscriber line, and other technologies. Further, it provides other access and aggregation, subscriber and experience, and traditional and other products, software, and services. Additionally, the company engages in the provision of planning, engineering, program management, maintenance, installation, and commissioning services to implement customer network solutions; and customer devices solutions into consumer, small business, and enterprise locations. ADTRAN Holdings, Inc. is headquartered in Huntsville, Alabama.

How the Company Makes Money

ADTRAN 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 signal significant challenges with consistent losses and declining revenues in the hardware & equipment industry. The balance sheet's lack of equity raises concerns about financial stability, though reduced liabilities provide a slight relief. Improving cash flow is a positive, but persistent negative free cash flow growth and operational inefficiencies need addressing to stabilize the company's outlook.

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.

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.

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.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
922.72M	1.15B	1.03B	563.00M	506.51M
	Gross Profit
330.31M	333.06M	327.25M	218.38M	217.55M
	EBIT
-124.52M	-156.28M	-38.75M	-8.03M	-11.03M
	EBITDA
-319.23M	-96.06M	3.93M	9.81M	10.39M
	Net Income Common Stockholders
-450.87M	-267.69M	-8.89M	-8.63M	2.38M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
77.57M	87.17M	108.98M	56.95M	63.29M
	Total Assets
1.18B	1.68B	1.88B	569.02M	518.94M
	Total Debt
215.50M	226.42M	143.34M	5.00M	5.38M
	Net Debt
137.93M	139.25M	34.70M	-51.60M	-54.78M
	Total Liabilities
622.01M	636.93M	578.25M	211.91M	145.99M
	Stockholders Equity
134.41M	593.82M	994.54M	357.10M	372.94M
Cash Flow		Free Cash Flow
70.62M	-88.72M	-62.00M	-2.66M	-22.93M
	Operating Cash Flow
103.07M	-45.60M	-43.55M	3.01M	-16.52M
	Investing Cash Flow
-62.21M	-32.20M	55.00M	10.27M	41.40M
	Financing Cash Flow
-50.01M	58.87M	46.87M	-12.96M	-42.98M

Adtran Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 7.54
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ADTN, the sentiment is Negative. The current price of 7.54 is below the 20-day moving average (MA) of 8.63, below the 50-day MA of 9.77, and below the 200-day MA of 7.58, indicating a bearish trend. The MACD of -0.32 indicates Negative momentum. The RSI at 38.52 is Neutral, neither overbought nor oversold. The STOCH value of 21.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ADTN.

Adtran Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DGII	68 Neutral	$976.72M	27.62	6.29%	―	-4.49%	119.80%
GILT	67 Neutral	$344.95M	13.49	8.58%	―	14.79%	5.04%
HLIT	66 Neutral	$1.07B	27.84	8.69%	―	11.65%	-55.58%
Sector *	57 Neutral	$20.24B	9.51	-13.28%	2.72%	5.43%	-24.54%
NTGR	56 Neutral	$666.01M	59.38	2.30%	―	-8.65%	―
COMM	54 Neutral	$835.92M	―	17.08%	―	-28.32%	73.59%
ADTN	45 Neutral	$656.49M	―	-123.20%	―	-19.70%	-70.40%

Adtran Corporate Events

Adtran Reports Q4 2024 Revenue Growth and Positive Outlook

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.