A10 Networks (ATEN) AI Stock Analysis

• Market Cap: $1.32B
• Dividend Yield: 1.31%
• Average Volume (3M): 753.99K
• Price to Earnings (P/E): 27.4
• Beta (1Y): 1.04
• Revenue Growth: 4.90%
• EPS Growth: 9.91%
• Country: US
• Employees: 481
• Sector: Technology
• Sector Strength: 90
• Industry: Software - Infrastructure
• EPS (TTM): 0.20
• Shares Outstanding: 72,080,720
• 10 Day Avg. Volume: 739,517
• 30 Day Avg. Volume: 753,988
• PEG Ratio: N/A
• Price to Book (P/B): 6.69
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 20.90
• Enterprise Value/Market Cap: 0.96
• Enterprise Value/Revenue: 1.22
• Enterprise Value/Gross Profit: 5.93
• Enterprise Value/Ebitda: 6.05
• 1Y Price Target: $21.60
• Price Target Upside: 21.28% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 73 Outperform
• Price Target: $21.00 ▲(17.91%Upside)

A10 Networks demonstrates strong financial performance and a positive earnings outlook, supported by robust profitability and strategic growth initiatives. While high leverage and valuation are concerns, the company's cash flow management and recent strategic acquisitions enhance its growth prospects. Technical indicators show upward momentum, though caution is warranted due to near-overbought conditions.

Positive Factors

Earnings Performance

ATEN reported better than expected first quarter results as both products and services revenue rose from the year ago period.

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.

Revenue Growth

The year ended with positive momentum that A10 Networks is anticipating further improvement in revenue in 2025.

Negative Factors

Business Execution

Execution has been largely choppy in recent years, and it could take some time before business activity firmly stabilizes, particularly as the macro environment remains challenging.

Competitive Environment

Competition remains fierce in cybersecurity, and there is not much anticipation for significant cross-sell activity for the newly acquired ThreatX Protect asset near-term.

Service Provider Business

ATEN's service provider business remains somewhat pressured, and there could be challenges moving upmarket.

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 software and hardware products, including application delivery controllers and security solutions. The company operates a revenue model based on direct sales, as well as channel partners and distributors who help extend its market reach. Additionally, A10 Networks offers maintenance and support services, which provide a recurring revenue stream. Strategic partnerships with cloud service providers and enterprises further bolster its revenue by integrating A10's solutions into broader digital transformation initiatives.

A10 Networks Financial Statement Overview

Summary

A10 Networks presents a strong financial profile characterized by solid profitability and efficient cash flow management. While there is a slight deceleration in revenue growth, the company maintains robust margins and returns on equity. The balance sheet reveals high leverage, which could be a potential risk, yet the firm’s ability to generate cash and maintain profitability provides a cushion against adverse financial conditions.

Income Statement

A10 Networks demonstrates strong profitability with a healthy gross profit margin of 80.0% and a net profit margin of 18.7% for TTM (Trailing-Twelve-Months). Revenue growth is moderate, showing a 2.1% increase from the previous year. The EBIT margin of 17.0% and EBITDA margin of 19.2% indicate operational efficiency. However, the revenue growth rate has slowed compared to previous years, which could be a concern for future expansion.

Balance Sheet

The company's balance sheet shows a robust equity position with an equity ratio of 32.3%, which represents financial stability. The debt-to-equity ratio is relatively high at 1.11, indicating significant leverage that could pose risks if not managed properly. ROE stands at 25.5%, reflecting strong returns for shareholders. Overall, while leverage is notable, the equity base and asset management are solid.

Cash Flow

A10 Networks displays healthy cash flow management with a free cash flow growth rate of -21.5% from the previous year, reflecting challenges in maintaining cash flow levels despite a high operating cash flow to net income ratio of 1.51. The free cash flow to net income ratio of 1.23 suggests the company generates ample cash relative to its earnings, which is a positive indicator of liquidity.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	267.16M	261.70M	251.70M	280.34M	250.04M	225.53M
Gross Profit	213.74M	210.28M	203.74M	223.51M	196.54M	175.38M
EBITDA	54.13M	55.26M	47.99M	61.76M	42.70M	24.74M
Net Income	49.96M	50.14M	39.97M	46.91M	94.89M	17.82M
Balance Sheet
Total Assets	606.22M	432.81M	389.81M	369.11M	393.08M	290.81M
Cash, Cash Equivalents and Short-Term Investments	355.84M	195.56M	159.30M	150.99M	185.04M	158.13M
Total Debt	228.41M	11.94M	16.82M	16.85M	19.32M	23.50M
Total Liabilities	410.34M	200.99M	181.93M	188.09M	184.20M	174.84M
Stockholders Equity	195.88M	231.83M	207.88M	181.01M	208.89M	115.97M
Cash Flow
Free Cash Flow	61.41M	78.22M	33.62M	55.30M	44.93M	51.72M
Operating Cash Flow	75.25M	90.49M	44.51M	66.10M	50.10M	55.29M
Investing Cash Flow	-83.74M	-48.35M	13.61M	11.09M	-38.07M	5.20M
Financing Cash Flow	129.42M	-44.26M	-28.85M	-88.14M	-16.38M	-22.95M

A10 Networks Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 17.81
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• 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 17.81 is below the 20-day moving average (MA) of 18.80, below the 50-day MA of 17.96, and above the 200-day MA of 17.42, indicating a neutral trend. The MACD of 0.27 indicates Positive momentum. The RSI at 40.04 is Neutral, neither overbought nor oversold. The STOCH value of 9.83 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	83 Outperform	$16.76B	27.94	19.89%	―	5.61%	26.65%
VRNT	74 Outperform	$1.25B	25.84	5.32%	―	-2.09%	76.96%
ATEN	73 Outperform	$1.32B	27.43	24.36%	1.31%	4.90%	9.91%
Sector *	68 Neutral	¥229.01B	14.30	7.50%	2.69%	9.26%	6.40%
RDWR	68 Neutral	$1.21B	106.15	3.78%	―	9.54%	―
VRNS	64 Neutral	$5.55B	―	-22.21%	―	13.34%	13.71%
NTCT	54 Neutral	$1.58B	―	-21.26%	―	-0.82%	-146.80%

A10 Networks Corporate Events

A10 Networks Reports Q1 2025 Financial Results

On May 1, 2025, A10 Networks announced its financial results for the first quarter of 2025, reporting a revenue increase of 9% year-over-year to $66.1 million. The company also declared a quarterly dividend of $0.06 per share and introduced a $75 million share repurchase program, reflecting its strategic focus on capital allocation and shareholder returns. Despite macroeconomic volatility, A10 Networks remains well-positioned to outperform the industry, driven by its diversification efforts and recent acquisition of ThreatX Protect, which enhances its capabilities in protecting web applications and APIs.