A10 Networks (ATEN) AI Stock Analysis

• Market Cap: $1.27B
• Dividend Yield: 1.36%
• Average Volume (3M): 731.22K
• Price to Earnings (P/E): 26.6
• Beta (1Y): 1.03
• Revenue Growth: 4.90%
• EPS Growth: 9.91%
• Country: US
• Employees: 481
• Sector: Technology
• Sector Strength: 78
• Industry: Software - Infrastructure
• EPS (TTM): 0.20
• Shares Outstanding: 72,080,720
• 10 Day Avg. Volume: 612,050
• 30 Day Avg. Volume: 731,219
• PEG Ratio: -0.54
• Price to Book (P/B): 6.94
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 22.71
• Enterprise Value/Market Cap: 0.95
• Enterprise Value/Revenue: 1.16
• Enterprise Value/Gross Profit: 5.64
• Enterprise Value/Ebitda: 5.75
• 1Y Price Target: $22.00
• Price Target Upside: 24.43% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 74 Outperform
• Price Target: $19.00 ▲(7.47%Upside)

A10 Networks has a strong financial foundation with solid profitability and a positive earnings outlook. While there are concerns about valuation and leverage, the company's strategic initiatives and cash flow management provide a buffer. Technical indicators show moderate bullish momentum, but caution is advised due to neutral RSI and stochastic signals.

Positive Factors

Customer Base Expansion

A10 Networks was successful in gaining more enterprise customers, continuing the trend in diversifying its revenue base away from service.

Financial Performance

A10 Networks reported better than expected first quarter results as both products and services revenue rose from the year ago period.

Revenue Growth

The return to revenue growth has helped give A10 Networks' stock a lift in recent months.

Negative Factors

Cost Management

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

Operational Challenges

Management appeared cautiously optimistic on the potential for a sustained turnaround in service provider spending trends and the opportunity to further expand its security portfolio.

A10 Networks Business Overview & Revenue Model

Company Description

A10 Networks (ATEN) is a technology company that specializes in the development of advanced application networking solutions. The company provides a range of products and services designed to optimize the performance, availability, and security of data centers and cloud environments. A10 Networks' core offerings include application delivery controllers (ADCs), threat protection solutions, and secure application services that enable businesses to ensure reliable and secure application delivery across multi-cloud networks.

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 shows strong financial health with robust profitability and efficient cash flow management. The company maintains solid margins and shareholder returns, but high leverage and slowing revenue growth pose potential risks.

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
	EBIT
45.53M	43.97M	38.65M	53.08M	33.39M	17.73M
	EBITDA
54.13M	55.26M	47.99M	61.76M	42.70M	24.74M
	Net Income Common Stockholders
49.96M	50.14M	39.97M	46.91M	94.89M	17.82M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
355.84M	195.56M	159.30M	150.99M	185.04M	158.13M
	Total Assets
606.22M	432.81M	389.81M	369.11M	393.08M	290.81M
	Total Debt
228.41M	11.94M	16.82M	16.85M	19.32M	23.50M
	Net Debt
-15.44M	-83.19M	-80.42M	-51.13M	-59.61M	-59.78M
	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: Positive
• Last Price: 17.68
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ATEN, the sentiment is Positive. The current price of 17.68 is above the 20-day moving average (MA) of 17.59, above the 50-day MA of 16.78, and above the 200-day MA of 16.90, indicating a bullish trend. The MACD of 0.26 indicates Negative momentum. The RSI at 53.17 is Neutral, neither overbought nor oversold. The STOCH value of 46.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	$16.46B	27.22	19.89%	―	5.61%	26.65%
ATEN	74 Outperform	$1.27B	26.55	24.36%	1.36%	4.90%	9.91%
VRNT	73 Outperform	$1.03B	22.11	5.32%	―	-2.09%	76.96%
RDWR	72 Outperform	$1.14B	100.34	3.78%	―	9.54%	―
VRNS	64 Neutral	$5.49B	―	-22.21%	―	13.34%	13.71%
Sector *	62 Neutral	$11.80B	10.08	-7.46%	2.99%	7.37%	-8.21%
NTCT	61 Neutral	$1.66B	―	-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.