Adtran (ADTN) AI Stock Analysis

• Market Cap: $683.39M
• Dividend Yield: N/A
• Average Volume (3M): 1.85M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.79
• Revenue Growth: 14.33%
• EPS Growth: 83.32%
• Country: US
• Employees: 3,091
• Sector: Technology
• Sector Strength: 88
• Industry: Communication Equipment
• EPS (TTM): 0.05
• Shares Outstanding: 80,116,000
• 10 Day Avg. Volume: 1,526,515
• 30 Day Avg. Volume: 1,845,979
• PEG Ratio: -0.02
• Price to Book (P/B): 4.89
• Price to Sales (P/S): 0.71
• P/FCF Ratio: 9.31
• Enterprise Value/Market Cap: 1.89
• Enterprise Value/Revenue: 1.25
• Enterprise Value/Gross Profit: 3.30
• Enterprise Value/Ebitda: 36.43
• 1Y Price Target: $13.40
• Price Target Upside: 56.91% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 51 Neutral
• Price Target: $8.50 ▼(-0.47% Downside)

Adtran's overall stock score reflects a company facing financial challenges with high leverage and inconsistent cash flow. While the earnings call provided positive insights into revenue growth and financial restructuring, the technical analysis and valuation highlight ongoing risks. The stock's performance is hindered by negative profitability and potential overbought conditions.

Positive Factors

Revenue Growth

Strong revenue growth, particularly in Optical Networking and Subscriber Solutions, indicates expanding market reach and product demand, supporting long-term business expansion.

Optical Networking Expansion

The significant growth in Optical Networking showcases Adtran's competitive edge and ability to capitalize on high-speed data transmission demand, strengthening its market position.

Improved Financial Position

The financing transaction enhances financial flexibility, allowing Adtran to better manage debt and invest in growth opportunities, improving long-term financial health.

Negative Factors

High Leverage

High leverage increases financial risk and limits flexibility, potentially impacting Adtran's ability to invest in growth and weather economic downturns.

Negative Profit Margins

Negative profit margins indicate ongoing challenges in achieving profitability, which can hinder reinvestment in innovation and long-term competitive positioning.

Inconsistent Cash Flow

Inconsistent cash flow generation limits Adtran's ability to fund operations and strategic initiatives, posing a risk to sustained growth and financial stability.

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 generates revenue through multiple streams, primarily by selling its hardware and software products to telecommunications service providers and enterprises. Its key revenue sources include the sale of broadband access equipment, which encompasses fiber access and DSL technologies, as well as optical networking systems that facilitate high-speed data transmission. Additionally, Adtran earns revenue through subscription-based services and software licensing, which provide ongoing support and updates to its customers. The company often enters into strategic partnerships with telecom operators and technology providers, enabling it to expand its market reach and enhance its product offerings. Overall, Adtran's earnings are significantly influenced by the demand for high-speed internet services, the growth of broadband infrastructure, and the increasing adoption of cloud-based networking solutions.

Adtran Financial Statement Overview

Summary

Adtran's financial statements reflect significant challenges. Despite some revenue growth, profitability remains elusive with negative margins. The balance sheet shows high leverage, increasing financial risk. Cash flow generation is inconsistent, with negative free cash flow growth. Overall, Adtran needs to address profitability and leverage issues to improve its financial health.

Income Statement

Adtran's income statement shows mixed performance. The TTM (Trailing-Twelve-Months) data indicates a modest revenue growth rate of 5.26%, but the company is struggling with profitability, as evidenced by negative net profit and EBIT margins. The gross profit margin is relatively stable at 37.92%, suggesting some efficiency in cost management. However, the persistent negative net income and EBIT margins highlight ongoing challenges in achieving profitability.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 1.55 in the TTM, indicating significant leverage. The return on equity is negative, reflecting the company's inability to generate profits from shareholders' equity. The equity ratio is not explicitly calculated, but the high leverage suggests potential financial risk. Overall, the balance sheet shows financial instability with high leverage and negative returns.

Cash Flow

Adtran's cash flow statement presents a mixed picture. The operating cash flow to net income ratio is 0.40, indicating some ability to convert income into cash. However, the free cash flow growth rate is negative at -24.99%, pointing to challenges in generating free cash flow. The free cash flow to net income ratio of 0.62 suggests some efficiency in cash generation relative to net income, but overall cash flow performance is weak.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.04B	922.72M	1.15B	1.03B	563.00M	506.51M
Gross Profit	392.46M	324.16M	331.13M	327.25M	218.38M	217.55M
EBITDA	35.50M	-330.14M	-104.36M	27.00K	9.81M	10.39M
Net Income	-87.98M	-459.89M	-267.69M	-2.04M	-8.63M	2.38M
Balance Sheet
Total Assets	1.21B	1.17B	1.68B	1.94B	569.02M	525.68M
Cash, Cash Equivalents and Short-Term Investments	93.68M	76.02M	87.17M	108.98M	56.95M	63.31M
Total Debt	243.83M	215.50M	234.14M	143.34M	3.27M	5.38M
Total Liabilities	665.24M	621.52M	628.86M	639.88M	211.91M	152.74M
Stockholders Equity	141.58M	126.95M	605.26M	973.95M	357.10M	372.94M
Cash Flow
Free Cash Flow	47.92M	38.40M	-79.35M	-61.30M	-2.66M	-22.93M
Operating Cash Flow	92.07M	103.57M	-43.02M	-44.23M	3.01M	-16.52M
Investing Cash Flow	-64.45M	-64.25M	-36.08M	55.83M	10.27M	41.40M
Financing Cash Flow	-18.40M	-50.01M	60.09M	52.94M	-12.96M	-42.98M

Adtran Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 8.54
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 8.54 is above the 20-day moving average (MA) of 7.84, below the 50-day MA of 8.70, and below the 200-day MA of 8.77, indicating a neutral trend. The MACD of -0.09 indicates Negative momentum. The RSI at 55.88 is Neutral, neither overbought nor oversold. The STOCH value of 91.91 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ADTN.

Adtran Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ITRN	79 Outperform	$817.23M	14.46	28.62%	4.60%	5.20%	9.14%
DGII	77 Outperform	$1.68B	41.60	6.71%	―	1.46%	78.77%
GILT	70 Outperform	$801.90M	31.82	6.95%	―	29.67%	41.90%
HLIT	70 Outperform	$1.19B	24.62	11.38%	―	1.93%	-43.22%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
ADTN	51 Neutral	$683.39M	―	-48.44%	―	14.33%	83.32%
NTGR	49 Neutral	$756.08M	―	-4.94%	―	2.95%	-228.28%

Adtran Corporate Events

Adtran Reports Q3 2025 Financial Results with Revenue Growth

ADTRAN Holdings, Inc. reported its unaudited financial results for the third quarter of 2025, showing a 23% year-over-year increase in revenue to $279.4 million. Despite a GAAP operating margin of -1.0%, the non-GAAP operating margin was 5.4%, reflecting disciplined execution and broad-based growth. The company remains focused on sustainable growth and maximizing long-term stockholder value, with expectations for fourth-quarter revenue between $275.0 million and $285.0 million and a non-GAAP operating margin of 3.5% to 7.5%.

Adtran Issues $201.25M Convertible Senior Notes

On September 19, 2025, Adtran Holdings, Inc. issued $201.25 million in 3.75% convertible senior notes due 2030, with an option for initial purchasers to buy an additional $26.25 million, which was fully exercised. These notes, which are senior unsecured obligations, will accrue interest semi-annually and mature in 2030, with specific conversion rights and redemption options. Additionally, Adtran entered into capped call transactions to mitigate potential stock dilution upon note conversion, with a cap price set at a 75% premium over the current stock price.

Adtran Announces $175 Million Convertible Notes Offering

On September 16, 2025, Adtran Holdings, Inc. announced the Sixth Amendment to its Wells Fargo Credit Agreement, allowing the issuance of $230 million in new unsecured convertible debt. This move aims to repay outstanding loans and finance the purchase of additional shares in its German subsidiary, Adtran Networks SE. Additionally, on September 17, 2025, ADTRAN announced the pricing of a $175 million convertible senior notes offering, with plans to use proceeds to repay borrowings and fund capped call transactions to mitigate stock dilution. This strategic financial maneuvering is expected to enhance ADTRAN’s financial flexibility and market positioning.