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Infinera Corp (INFN)
NASDAQ:INFN
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Infinera
(NASDAQ:INFN)45Neutral
Positive Factors
Design Win Momentum
The company continues to have strong design win momentum across various verticals, including Internet Content Providers.
Gross Margin
Gross Margin increased slightly and is expected to sustain at 40% or higher going forward.
Negative Factors
Revenue Decline
Infinera's 3Q revenue declined 9.7% year over year and fell below consensus expectations.
Infinera (INFN) vs. S&P 500 (SPY)
Market Cap
$1.57B
Dividend YieldN/A
Average Volume (3M)1.11M
Price to Earnings (P/E)―
Beta (1Y)1.58
Revenue Growth-12.12%
EPS Growth-469.62%
CountryUS
Employees3,389
SectorTechnology
Sector Strength48
IndustryHardware & Equipment
Share Statistics
EPS (TTM)-0.64
Shares Outstanding236,802,000
10 Day Avg. Volume1,693,198
30 Day Avg. Volume1,112,137
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.08
Price to Cash Flow (P/CF)8.80
P/FCF Ratio19.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$6.65Price Target Upside0.15% Upside
Rating ConsensusHold
Number of Analyst Covering0
Infinera Business Overview & Revenue Model
Company DescriptionInfinera Corporation is a global supplier of telecommunications equipment and services, primarily focusing on the design, development, and delivery of digital optical networking systems. Operating within the telecommunications and networking sector, Infinera provides advanced optical transport networking solutions that enable network operators to scale bandwidth, accelerate service innovation, and automate network operations. The company's product portfolio includes optical transport platforms, converged packet-optical solutions, and software for network management and control, serving a broad range of customers including telecommunications service providers, internet content providers, cable operators, and government entities.
How the Company Makes MoneyInfinera generates revenue by selling its optical networking equipment and solutions to a diverse array of customers worldwide. The company's revenue streams are primarily comprised of the sale of networking hardware, which includes optical transport platforms and converged packet-optical solutions, as well as associated software and services for network management and optimization. Infinera also offers maintenance, support, and professional services that provide additional revenue. Moreover, the company engages in strategic partnerships and collaborations with other technology firms and network operators to enhance its product offerings and expand its market reach. Key factors contributing to Infinera's earnings include ongoing demand for high-capacity, scalable network solutions driven by the exponential growth of data traffic and the increasing adoption of cloud-based services.
Infinera Financial Statement Overview
Summary
Infinera's financial performance is challenged by declining revenue and ongoing losses. The income statement reveals a negative net profit margin, and the balance sheet shows a significantly negative return on equity. Cash flow issues are evident with zero free cash flow, indicating liquidity constraints. These financial difficulties suggest a need for strategic improvements.Income Statement
Infinera's income statement reveals challenges with profitability. The gross profit margin for 2024 is 38.4%, indicating decent efficiency in production. However, the net profit margin is negative at -10.6%, reflecting ongoing losses. Revenue has declined by 12.1% from 2023 to 2024, marking a concerning trend. The EBIT margin is -5.9%, and the EBITDA margin is also negative at -5.9%, highlighting operational inefficiencies.40
Negative
Balance Sheet
The balance sheet shows a debt-to-equity ratio of 0.36 for 2024, indicating moderate leverage, but the company's stockholders' equity has declined significantly. The return on equity is negative at -129.1%, suggesting poor returns for shareholders. The equity ratio is 7.6%, reflecting a low proportion of assets financed by equity, which could pose a risk to financial stability.45
Neutral
Cash Flow
Infinera's cash flow statement indicates significant issues with liquidity. The free cash flow in 2024 is zero, marking a substantial deterioration. The operating cash flow to net income ratio is not calculable due to zero operating cash flow, pointing to potential liquidity constraints. The trend in cash flow generation is concerning, given the absence of free cash flow growth.30
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.42B | 1.61B | 1.57B | 1.43B | 1.36B | Gross Profit |
| 544.56M | 622.91M | 535.78M | 497.97M | 408.79M | EBIT |
| -83.65M | 4.09M | -34.90M | -73.62M | -117.27M | EBITDA |
| -38.39M | 91.98M | 63.76M | -11.12M | -35.26M | Net Income Common Stockholders |
| -150.34M | -25.21M | -76.04M | -170.78M | -206.72M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 145.81M | 172.50M | 178.66M | 190.61M | 298.01M | Total Assets |
| 1.53B | 1.68B | 1.67B | 1.59B | 1.73B | Total Debt |
| 42.08M | 744.64M | 714.09M | 531.65M | 625.49M | Net Debt |
| -103.72M | 572.13M | 535.43M | 341.04M | 327.47M | Total Liabilities |
| 1.42B | 1.46B | 1.49B | 1.26B | 1.31B | Stockholders Equity |
| 116.52M | 216.59M | 179.65M | 323.77M | 426.28M |
| Cash Flow | Free Cash Flow | |||
| 5.67M | -12.80M | -83.61M | -13.25M | -151.31M | Operating Cash Flow |
| 80.68M | 49.51M | -37.56M | 28.13M | -112.30M | Investing Cash Flow |
| -75.01M | -62.31M | -46.05M | -41.38M | -39.01M | Financing Cash Flow |
| -32.22M | 13.71M | 82.35M | -101.54M | 334.16M |
Infinera Technical Analysis
Positive
6.64
Price Trends
6.62
Positive
6.64
Negative
6.30
Positive
Market Momentum
<0.01
Positive
51.44
Neutral
>-0.01
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For INFN, the sentiment is Positive. The current price of 6.64 is below the 20-day moving average (MA) of 6.64, above the 50-day MA of 6.62, and above the 200-day MA of 6.30, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 51.44 is Neutral, neither overbought nor oversold. The STOCH value of >-0.01 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for INFN.
Infinera Risk Analysis
Infinera disclosed 49 risk factors in its most recent earnings report. Infinera 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
Infinera Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $6.61B | 21.69 | 18.88% | ― | 14.83% | 28.84% | |
68 Neutral | $9.76B | 120.07 | 2.96% | ― | -8.47% | -66.16% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% | |
55 Neutral | $759.47M | ― | -123.20% | ― | -19.70% | -70.40% | |
47 Neutral | $4.23B | ― | -48.63% | ― | -1.72% | -94.98% | |
45 Neutral | $1.57B | ― | -90.26% | ― | -12.12% | -469.62% |
* Technology Sector Average
Performance Comparison
INFN
Infinera
6.64
2.13
47.23%
ADTN
Adtran
9.16
3.08
50.66%
CIEN
Ciena
68.93
17.39
33.74%
FN
Fabrinet
193.83
-7.96
-3.94%
LITE
Lumentum Holdings
62.11
15.24
32.52%
Infinera Earnings Call Summary
Earnings Call Date: Feb 28, 2025 | % Change Since: 0.00% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture for Infinera. While there were strong strategic wins and cash flow generation, the company faced revenue declines and a challenging operating environment. The design win momentum and strategic positioning for future growth were positive, but near-term financial metrics were under pressure.Highlights
Strong Strategic Deal Momentum
In the first quarter, Infinera won new network decisions potentially representing over $1 billion in cumulative multiyear value across strategic accounts.
Free Cash Flow Generation
Infinera reported healthy cash flow generation with $16 million in free cash flow for Q1, following $58 million in free cash flow in Q4 2023.
Major Hyperscaler Wins
Infinera secured several significant wins with hyperscalers, including a GX ICE7-based subsea deal worth $100-200 million over 3 years and a GX open line system worth $200-300 million over 3 years.
Launch of Intra-Data Center Solutions
Infinera launched intra-data center solutions leveraging their U.S.-based optical semiconductor fab, potentially reducing power per bit by 75% for AI applications.
Lowlights
Revenue Shortfall and Decline
Quarterly revenue came in 4% below the low end of the outlook range and declined 22% year-over-year, mainly due to a slower release of book ship orders.
Challenging Operating Environment
The near-term operating environment remains challenging with cautious spending postures from customers and project pushouts affecting revenue.
Lower Gross Margin
Q1 gross margin was 36.6%, below the midpoint of the outlook range and decreased 220 basis points year-over-year due to higher contribution of line systems to product mix.
Loss of $0.17 Per Share
Infinera reported a diluted EPS loss of $0.17 compared to earning $0.02 in the same quarter of the previous year.
Company Guidance
In the earnings call for Infinera's Q1 2024 results, the company provided guidance that highlighted both challenges and opportunities. The quarterly revenue was reported at $307 million, a decrease of 22% year-over-year, attributed to slower release of book ship orders and project pushouts. Despite the revenue shortfall, the company maintained a gross margin of 36.6%, within the expected range, and generated $16 million in free cash flow. Infinera ended the quarter with $192 million in cash and no debt drawn against its over $200 million asset-based lending facility. For Q2 2024, the company anticipates revenue of $330 million, plus or minus $20 million, and a gross margin of 39.5%, plus or minus 150 basis points. The company expects revenue for the full year 2024 to decline by 1% to 5% compared to 2023, with an anticipated recovery and year-over-year growth in the second half of the year. Additionally, Infinera outlined strategic wins with potential multiyear values, including a subsea deal worth $100 million to $200 million and several other deals with hyperscalers and service providers, setting a strong foundation for growth into 2025.Infinera Corporate Events
Private Placements and FinancingM&A Transactions
Infinera Completes Merger, Alters Convertible Notes Structure
Neutral
Feb 28, 2025
Infinera has completed a merger that affects its Convertible Senior Notes due 2027 and 2028, changing their conversion rights from company stock to a mix of cash and Nokia ADSs. Additionally, Infinera terminated a $200 million revolving credit facility and initiated a Change of Control Offer to purchase outstanding Convertible Notes, marking a significant shift in its financial structure and stakeholder rights.
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.