Glasshouse Research says Aviat ‘a backlog of red flags,’ earnings overstated

In a recently published report, Glasshouse Research says Aviat is “a melting ice cube” that is not generating earnings, rather it is borrowing them from its balance sheet. “The company is recognizing revenue before it bills customers, struggling to collect cash, and delaying payments to suppliers – creating the illusion of growth and profitability,” the report reads. “The stock is priced on cosmetic earnings that we believe will unwind. Based on our findings GlassHouse sets a short-term target price of $8.75, (representing ~60% downside) and eventually being a $0 long-term,” it argues. Shares are trading down almost 3% at $21.97 in morning trading.