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Aviat Networks (AVNW)
NASDAQ:AVNW
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Aviat Networks
(NASDAQ:AVNW)
66Neutral
Positive Factors
Earnings Potential
Synergies from the acquisition are fully realized, contributing to future earnings potential.
Market Position
Aviat Networks designs and sells advanced wireless networking products, which positions it well in the market.
Revenue Growth
Revenue for Aviat Networks exceeded expectations by approximately 14%, with significant growth in North America driven by strength in private networks.
Negative Factors
Macroeconomic Environment
There is increased noise in the macro environment, and a steep quarter-over-quarter ramp is needed to hit guidance.
Operational Challenges
Execution challenges led to a distracted management team focused on closing out a year-end audit process and completing related SEC filings.
Revenue Decline
North American revenue contracted 25% q/q and 24% y/y, driven by the softness at U.S. tier 1 accounts.
Aviat Networks (AVNW) vs. S&P 500 (SPY)
Market Cap
$239.47M
Dividend YieldN/A
Average Volume (3M)134.91K
Price to Earnings (P/E)―
Beta (1Y)0.87
Revenue Growth20.95%
EPS Growth-121.24%
CountryUS
Employees909
SectorTechnology
Sector Strength44
IndustryCommunication Equipment
Share Statistics
EPS (TTM)-0.28
Shares Outstanding12,683,983
10 Day Avg. Volume82,834
30 Day Avg. Volume134,913
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.58
Price to Cash Flow (P/CF)3.00
P/FCF Ratio3.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$33.00Price Target Upside74.79% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Aviat Networks Business Overview & Revenue Model
Company DescriptionAviat Networks, Inc. provides wireless transport solutions worldwide. It offers a comprehensive suite of products and localized professional and support services enabling customers to simplify their networks and lives. The company's products and solutions include wireless transmission systems for microwave and millimeter wave networking applications. It serves communications service providers and private network operators, including state/local government, utility, federal government, and defense organizations. The company markets its products through a direct sales, service, and support organization; indirect sales channels comprising dealers, resellers, and sales representatives; and through online. Aviat Networks, Inc. was incorporated in 2006 and is headquartered in Austin, Texas.
How the Company Makes MoneyAviat Networks generates revenue primarily through the sale of its microwave networking products and related services. The company's key revenue streams include hardware sales, which involve the manufacture and distribution of microwave radios and networking systems. Additionally, Aviat Networks offers a suite of support and maintenance services, including network design, installation, and ongoing technical support, which provide a recurring revenue stream. Significant partnerships with telecommunications companies and government agencies also contribute to Aviat's earnings by facilitating large-scale deployments of its solutions. These collaborations help the company secure contracts and develop tailored solutions that meet specific customer needs, further enhancing its revenue potential.
Aviat Networks Financial Statement Overview
Summary
Aviat Networks shows strong revenue growth and a solid equity base. However, recent profitability challenges and increased debt levels present potential risks. Positive cash flow supports operations, but the decline in recent free cash flow growth requires attention. The company needs to improve operational efficiencies and control debt to sustain growth.Income Statement
Aviat Networks has shown a consistent increase in revenue over the years, with a notable revenue growth rate from 2020 to 2023. However, the TTM (Trailing-Twelve-Months) data shows a decrease in gross profit margin and a negative net income, indicating challenges in profitability. The EBIT and EBITDA margins have also declined in the TTM period, reflecting potential operational inefficiencies.65
Positive
Balance Sheet
The company's balance sheet shows a reasonable equity ratio and a manageable debt-to-equity ratio, indicating financial stability. However, there is a trend of increasing total debt over time. The return on equity has faced some pressure due to recent negative net income, but the overall equity position remains strong.72
Positive
Cash Flow
Aviat Networks' cash flow statement reveals a positive operating cash flow throughout the years, with fluctuations in free cash flow. The TTM data shows a decline in free cash flow growth, likely impacted by increased capital expenditures. The operating cash flow to net income ratio remains healthy, suggesting efficient cash conversion despite the net loss.70
Positive
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 432.11M | 408.08M | 346.59M | 302.96M | 274.91M | 238.64M |
| Gross Profit | |||||
| 136.72M | 144.73M | 124.17M | 109.23M | 102.61M | 84.70M |
| EBIT | |||||
| 845.00K | 19.40M | 26.41M | 28.75M | 22.21M | 3.38M |
| EBITDA | |||||
| 9.64M | 28.26M | 33.81M | 33.45M | 27.48M | 12.57M |
| Net Income Common Stockholders | |||||
| -3.52M | 10.76M | 11.53M | 21.16M | 110.14M | 257.00K |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 107.80M | 64.62M | 22.24M | 47.77M | 47.94M | 41.62M |
| Total Assets | |||||
| 415.50M | 535.22M | 364.50M | 323.90M | 297.65M | 179.80M |
| Total Debt | |||||
| 6.00M | 52.18M | 2.75M | 2.92M | 3.99M | 12.75M |
| Net Debt | |||||
| -101.80M | -12.44M | -19.49M | -33.95M | -43.95M | -28.87M |
| Total Liabilities | |||||
| 173.20M | 279.34M | 144.40M | 122.15M | 114.32M | 111.12M |
| Stockholders Equity | |||||
| 242.30M | 255.88M | 220.10M | 201.75M | 183.34M | 68.68M |
| Cash Flow | Free Cash Flow | ||||
| 8.00M | 27.86M | -6.98M | 997.00K | 14.45M | 12.88M |
| Operating Cash Flow | |||||
| 17.22M | 30.54M | -1.64M | 2.79M | 17.30M | 17.49M |
| Investing Cash Flow | |||||
| -25.16M | -35.22M | -11.95M | -7.79M | -2.85M | -4.61M |
| Financing Cash Flow | |||||
| 17.02M | 48.70M | -681.00K | -4.87M | -8.05M | -2.54M |
Aviat Networks Technical Analysis
Negative
18.88
Price Trends
20.50
Negative
18.70
Positive
22.26
Negative
Market Momentum
-0.34
Positive
40.74
Neutral
36.06
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AVNW, the sentiment is Negative. The current price of 18.88 is below the 20-day moving average (MA) of 19.66, below the 50-day MA of 20.50, and below the 200-day MA of 22.26, indicating a bearish trend. The MACD of -0.34 indicates Positive momentum. The RSI at 40.74 is Neutral, neither overbought nor oversold. The STOCH value of 36.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AVNW.
Aviat Networks Risk Analysis
Aviat Networks disclosed 34 risk factors in its most recent earnings report. Aviat Networks reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Aviat Networks Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $28.42B | 21.14 | 8.27% | 1.93% | -12.68% | 90.73% | |
74 Outperform | $242.12B | 26.67 | 20.02% | 2.63% | -5.34% | -30.57% | |
73 Outperform | $26.27B | 12,966.67 | 0.15% | 2.20% | -5.59% | ― | |
66 Neutral | $239.47M | ― | -1.40% | ― | 20.95% | -121.24% | |
66 Neutral | $8.75B | 114.04 | 2.76% | ― | -7.29% | -64.31% | |
60 Neutral | $12.03B | 41.98 | 6.21% | 2.44% | -8.82% | -10.01% | |
58 Neutral | $21.03B | 10.58 | -16.29% | 2.47% | 4.38% | -23.63% |
* Technology Sector Average
Performance Comparison
AVNW
Aviat Networks
18.88
-18.78
-49.87%
CIEN
Ciena
61.56
12.37
25.15%
CSCO
Cisco Systems
61.71
13.20
27.21%
JNPR
Juniper Networks
36.12
-0.05
-0.14%
ERIC
Telefonaktiebolaget LM Ericsson
7.78
2.48
46.79%
NOK
Nokia
5.21
1.80
52.79%
Aviat Networks Earnings Call Summary
Earnings Call Date: Feb 4, 2025 | % Change Since: -8.13% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
The earnings call highlighted Aviat Networks' strong financial performance, record revenue, and successful integration of Pasolink, which were offset by challenges in maintaining gross margins and muted Tier 1 demand in the U.S. The company remains optimistic about future growth potential despite some regional challenges.Highlights
Record Revenue and Adjusted EBITDA
Aviat Networks reported total revenue of $118 million, up 26% compared to the same period last year, achieving the highest quarterly revenue in over a decade. Adjusted EBITDA reached a record $14.8 million, up 22% year-over-year.
Strong Performance in Pasolink and Private Networks
The Pasolink segment contributed nearly $35 million in revenue this quarter, with orders averaging $35 million over the last three quarters. Private networks, particularly in public safety and utilities, showed strong performance.
International Revenue Growth
International revenue increased by $17.2 million or 40% from the same period last year, driven primarily by Pasolink acquisition.
Successful Financial Management
The company generated $20.8 million in cash from operating activities, marking the best result in at least seven years. This was due to profitable results and improvements in working capital.
New Product Introduction
Aviat introduced Multi-Band Max (MB Max) enabling up to 25 Gbps on a single antenna, expected to enhance capacity and reliability for customers.
Lowlights
Gross Margin Decline
Gross margins were 34.6% on a GAAP basis and 35.3% on a non-GAAP basis, down from 38.8% in the prior year due to the addition of Pasolink and product mix.
Muted U.S. Tier 1 Demand
Demand from U.S. Tier 1 customers remained muted, attributed to timing-related issues between projects rather than large CapEx shifts.
Challenges in Africa
Weakness in Africa was noted, largely driven by currency issues and elevated interest rates, affecting demand.
Company Guidance
During the Aviat Networks' Fiscal Q2 2025 earnings call, guidance highlighted strong financial performance, including total revenue of $118 million, marking a 26% increase from the previous year. The company reported a non-GAAP gross margin of 35.3% and an adjusted EBITDA of $14.8 million, reflecting a 22% year-over-year growth. Non-GAAP EPS was $0.82. The Pasolink acquisition contributed nearly $35 million in revenue, with orders averaging $35 million over the past three quarters, setting a $140 million run rate target by fiscal year-end. The company noted sequential improvement in the U.S. Tier 1 market and strong performance in private networks, particularly in public safety and rural broadband. Aviat maintained its fiscal year guidance, emphasizing the potential for continued growth driven by product expansions and favorable geographic market conditions.Aviat Networks Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Aviat Networks Strengthens Board with New Appointment
Positive
Feb 3, 2025
Aviat Networks announced the appointment of Scott Halliday to its Board of Directors, effective January 31, 2025. Halliday, who has extensive experience in financial audit and governance from his tenure at EY, will serve on the Audit Committee. His leadership is expected to support Aviat’s growth strategy and enhance shareholder value. The appointment highlights Aviat’s commitment to strengthening its corporate governance and operational strategy.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.