A10 Networks (ATEN) AI Stock Analysis

• Market Cap: $1.10B
• Dividend Yield: 1.61%
• Average Volume (3M): 1.59M
• Price to Earnings (P/E): 22.4
• Beta (1Y): 1.06
• Revenue Growth: 3.97%
• EPS Growth: 25.83%
• Country: US
• Employees: 481
• Sector: Technology
• Sector Strength: 40
• Industry: Software - Infrastructure
• EPS (TTM): 0.67
• Shares Outstanding: 73,952,600
• 10 Day Avg. Volume: 1,180,338
• 30 Day Avg. Volume: 1,590,391
• PEG Ratio: 0.87
• Price to Book (P/B): N/A
• Price to Sales (P/S): 4.89
• Price to Cash Flow (P/CF): 12.50
• P/FCF Ratio: 12.50
• 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: $22.33
• Price Target Upside: 49.97% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4

A10 Networks demonstrates robust financial health, with strong profitability and a debt-free balance sheet. However, technical indicators show negative momentum, and the high P/E ratio suggests potential overvaluation. The earnings call conveyed a positive outlook, particularly in the security sector, supporting future growth.

Positive Factors

Customer Expansion

Large enterprise customers have become a larger portion of revenue and helped ATEN report healthy free cash flow.

Earnings

A10 Networks reported better than expected fourth quarter 2024 results as North American service providers were once again buying.

Financial Performance

The company's ability to generate earnings and positive free cash flow should lead to the stock continuing to trend higher this year.

Negative Factors

Operating Expenses

Management expects opex as a percent of revenue to increase slightly in 2025, implying a slight downtick in EBITDA margins this year.

Revenue Growth

The variability of orders from certain service providers has resulted in ATEN reporting minimal revenue growth as the Company tried to broaden its customer base.

A10 Networks Business Overview & Revenue Model

Company Description

A10 Networks, Inc. provides networking solutions in the Americas, Japan, other Asia Pacific, and EMEA countries. The company offers Thunder Application Delivery Controller (ADC) that provides advanced server load balancing; Lightning ADC, a cloud-native software-as-a-service platform to boost the delivery and security of applications and microservices; and Thunder Carrier Grade Networking product, which offers standards-compliant address and protocol translation services for service provider networks. It also provides Thunder Threat Protection System (TPS) for the protection of networks and server resources against massive distributed denial of service attacks; Thunder Secure Sockets Layer (SSL) Insight solution that decrypts SSL-encrypted traffic and forwards it to a third-party security device for deep packet inspection; and Thunder Convergent Firewall, which addresses various critical security capabilities in one package by consolidating various security and networking functions in a single appliance. In addition, the company offers intelligent management and automation tools comprising harmony controller that provides intelligent management, automation, and analytics for secure application delivery in multi-cloud environment; and aGalaxy TPS, a multi-device network management solution. A10 Networks, Inc. delivers its solutions on optimized hardware appliances, bare metal software, containerized software, virtual appliances, and cloud-native software. It serves cloud providers; service providers include cloud, telecommunications, and multiple system and cable operators; government organizations; and enterprises in the technology, industrial, retail, financial, gaming, and education industries. The company markets its products through sales organizations, as well as distribution channel partners, including distributors, value added resellers, and system integrators. A10 Networks, Inc. was incorporated in 2004 and is headquartered in San Jose, California.

How the Company Makes Money

A10 Networks generates revenue primarily through the sale of its hardware and software solutions, which include both perpetual licenses and subscription-based models. The company earns money by offering a combination of product sales, including ADCs and DDoS protection appliances, and associated software licenses. Additionally, A10 Networks provides maintenance and support services, which contribute to a recurring revenue stream. Key factors contributing to its earnings include strategic partnerships with global technology distributors and resellers, as well as its ability to innovate and adapt its offerings to meet the evolving needs of the cybersecurity and cloud markets.

A10 Networks Financial Statement Overview

Summary

A10 Networks exhibits strong financial health, characterized by consistent revenue growth, solid profitability, and robust cash flow generation. The balance sheet is particularly strong due to zero debt and high equity levels, minimizing financial risk.

Income Statement

A10 Networks has demonstrated solid profitability with consistent growth in revenue and net income. The gross profit margin and net profit margin are strong, reflecting effective cost management. Revenue growth has been positive over recent years, although there was a dip in 2022. Overall, the EBIT and EBITDA margins indicate robust operational efficiency.

Balance Sheet

The company's balance sheet is healthy, with a strong equity base and zero debt as of the latest period. The equity ratio is favorable, showing a stable financial structure. The return on equity is impressive, reflecting efficient use of equity to generate profits. The absence of debt reduces financial risk.

Cash Flow

A10 Networks has shown strong cash flow generation, with a healthy operating cash flow to net income ratio. Free cash flow has grown significantly, indicating effective capital management. The free cash flow to net income ratio is robust, showcasing the company's ability to convert earnings into cash.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
261.70M	251.70M	280.34M	250.04M	225.53M
	Gross Profit
210.28M	203.74M	223.51M	196.54M	175.38M
	EBIT
43.97M	38.65M	53.08M	33.39M	17.73M
	EBITDA
43.97M	47.99M	60.46M	35.14M	24.74M
	Net Income Common Stockholders
50.14M	39.97M	46.91M	94.89M	17.82M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
195.56M	159.30M	150.99M	185.04M	158.13M
	Total Assets
432.81M	389.81M	369.11M	393.08M	290.81M
	Total Debt
11.94M	16.82M	16.85M	19.32M	23.50M
	Net Debt
-83.19M	-80.42M	-51.13M	-59.61M	-59.78M
	Total Liabilities
200.99M	181.93M	188.09M	184.20M	174.84M
	Stockholders Equity
231.83M	207.88M	181.01M	208.89M	115.97M
Cash Flow		Free Cash Flow
78.22M	33.62M	55.30M	44.93M	51.72M
	Operating Cash Flow
90.49M	44.51M	66.10M	50.10M	55.29M
	Investing Cash Flow
-48.35M	13.61M	11.09M	-38.07M	5.20M
	Financing Cash Flow
-44.26M	-28.85M	-88.14M	-16.38M	-22.95M

A10 Networks Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 14.89
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ATEN, the sentiment is Negative. The current price of 14.89 is below the 20-day moving average (MA) of 16.87, below the 50-day MA of 18.94, and below the 200-day MA of 16.11, indicating a bearish trend. The MACD of -0.79 indicates Positive momentum. The RSI at 35.05 is Neutral, neither overbought nor oversold. The STOCH value of 18.50 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ATEN.

A10 Networks Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FFIV	79 Outperform	$14.04B	24.03	19.51%	―	3.02%	31.36%
PANW	78 Outperform	$100.93B	86.17	23.38%	―	13.86%	-46.44%
ANET	75 Outperform	$85.97B	31.22	33.14%	―	19.50%	34.64%
CSCO	74 Outperform	$216.98B	23.90	20.02%	2.94%	-5.34%	-30.57%
ATEN	67 Neutral	$1.10B	22.39	22.81%	1.61%	3.97%	25.83%
JNPR	60 Neutral	$11.38B	39.68	6.21%	2.58%	-8.82%	-10.01%
Sector *	57 Neutral	$18.45B	9.41	-13.97%	2.74%	5.04%	-23.56%

A10 Networks Corporate Events

A10 Networks Reports Revenue Growth and Strategic Focus

On February 4, 2025, A10 Networks announced its fourth-quarter and full-year 2024 financial results, highlighting a 5% revenue growth in Q4 to $74.2 million and a 4% increase for the year to $261.7 million. The company experienced improved demand from service providers, with a notable 8% growth in enterprise revenue, and emphasized its continued focus on operational excellence and investment in enhancing security offerings, positioning itself for sustained growth in 2025.