Aviat Networks (AVNW) AI Stock Analysis

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Aviat Networks

(NASDAQ:AVNW)

Rating:67Neutral

Price Target:

$22.50

▲(1.99%Upside)

Aviat Networks is showing positive revenue growth and efficient cost management, as highlighted in the earnings call. However, financial performance is mixed with profitability and cash flow challenges, while international revenues face headwinds. Technical indicators suggest upward momentum but caution is warranted due to valuation concerns and potential overbought conditions.

Positive Factors

Acquisition Strategy

Synergies from the acquisition are fully realized, contributing to future earnings potential.

Financial Performance

Revenue for Aviat Networks exceeded expectations by approximately 14%, with significant growth in North America driven by strength in private networks.

Market Position

Aviat Networks designs and sells advanced wireless networking products, which positions it well in the market.

Negative Factors

Market Environment

There is increased noise in the macro environment, and a steep quarter-over-quarter ramp is needed to hit guidance.

Revenue Guidance

Aviat Networks recently lowered its fiscal year 2025 revenue guidance due to softer first-quarter results and a conservative market view.

Supply Constraints

Global tariffs are cited as a potential risk that could create supply-side constraints, affecting the lower end of the company's guidance range.

Aviat Networks (AVNW) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$280.00M

Dividend YieldN/A

Average Volume (3M)96.11K

Price to Earnings (P/E)―

Beta (1Y)0.81

Revenue Growth12.39%

EPS Growth-123.62%

CountryUS

Employees909

SectorTechnology

Sector Strength83

IndustryCommunication Equipment

Share Statistics

EPS (TTM)0.88

Shares Outstanding12,692,431

10 Day Avg. Volume79,327

30 Day Avg. Volume96,111

Financial Highlights & Ratios

PEG Ratio-2.64

Price to Book (P/B)1.05

Price to Sales (P/S)0.00

P/FCF Ratio32.78

Enterprise Value/Market Cap1.03

Enterprise Value/Revenue0.18

Enterprise Value/Gross Profit2.11

Enterprise Value/Ebitda3.94

Forecast

1Y Price Target

$30.00

Price Target Upside35.99% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering3

Aviat Networks Business Overview & Revenue Model

Company DescriptionAviat Networks (AVNW) is a leading provider of wireless transport solutions, catering primarily to telecommunications service providers, government and defense agencies, and enterprises across various sectors. The company specializes in microwave networking solutions that enable high-capacity and reliable data transmission. Aviat Networks offers a comprehensive portfolio of products and services, including microwave routers, switches, and software solutions designed to optimize network performance and efficiency.

How the Company Makes MoneyAviat Networks generates revenue through the sale of its wireless transport products and related services. The company's primary revenue streams include the sale of microwave networking equipment and the provision of support and maintenance services. Aviat Networks also earns revenue from offering network design, installation, and optimization services. Significant partnerships with telecommunications providers and government entities are crucial to its earnings, as these collaborations drive demand for its advanced networking solutions. Additionally, Aviat Networks capitalizes on emerging trends in telecommunications, such as 5G deployment, which further bolsters demand for its high-capacity and reliable transmission solutions.

Aviat Networks Earnings Call Summary

Earnings Call Date:May 06, 2025

(Q3-2025)

% Change Since: 12.15%|

Next Earnings Date:Aug 20, 2025

Earnings Call Sentiment Neutral

Aviat Networks reported strong financial performance, including record adjusted EBITDA and growth in North American revenues. However, international revenue declined, and there are concerns about potential costs due to tariffs and muted demand in certain regions.

Q3-2025 Updates

Positive Updates

Record Adjusted EBITDA

Aviat Networks reported a record adjusted EBITDA of $14.9 million, representing a 17% increase compared to the previous year.

Growth in Non-GAAP EPS

The non-GAAP EPS increased by 13% year-over-year, reaching $0.88.

Successful ProVision Plus Sales

Initial sales of the ProVision Plus software to Pasolink customers were reported, marking progress in servicing Tier 1 and larger mobile service provider customers.

Strong Performance in North America

North American revenues increased by $5 million or 11% year-over-year, driven by growth in private networks.

Negative Updates

International Revenue Decline

International revenues decreased by $3.2 million or 5% compared to the same period last year, largely due to a challenging comparison with APAC's record performance in the prior year.

Tariff Impact Concerns

Concerns about the impact of tariffs on costs, with potential exposure estimated at 2% to 2.5% of COGS over the next few quarters.

Muted Demand in Africa

The African market remains subdued, largely due to currency constraints and high interest rates.

Company Guidance

During Aviat Networks' third quarter fiscal 2025 earnings call, the company reported total revenues of $112.6 million and a non-GAAP gross margin of 35.8%. The adjusted EBITDA reached a record $14.9 million, representing a 17% increase compared to the same period last year. The non-GAAP earnings per share (EPS) were $0.88, up 13% year-over-year. North American revenues saw an increase, particularly in private networks, contributing $49.4 million, an 11% rise from the previous year. International revenues, however, decreased by 5% to $63.2 million due to tough comparables in the APAC region. Gross margins improved due to a favorable regional and software mix, with the GAAP gross margin at 34.9%. Operating expenses were effectively managed, with non-GAAP operating expenses at $27.2 million. The company maintained its guidance for fiscal year 2025, aligning with full-year consensus estimates on revenue and EBITDA, despite uncertainties related to tariffs and the macroeconomic environment.

Aviat Networks Financial Statement Overview

Summary

Aviat Networks demonstrates strong revenue growth and a solid equity position. However, recent profitability issues and rising debt levels pose potential risks. Positive cash flow supports operations, but declining free cash flow growth requires attention. Management needs to focus on operational efficiencies and debt control.

Income Statement

Positive

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.

Balance Sheet

Positive

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.

Cash Flow

Positive

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.

TTM	Jun 2024	Jun 2023	Sep 2022	Sep 2021	Sep 2020
Breakdown
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
59.19M	64.62M	22.24M	47.77M	47.94M	41.62M
	Total Assets
490.34M	535.22M	364.50M	323.90M	297.65M	179.80M
	Total Debt
52.10M	52.18M	2.75M	2.92M	3.99M	12.75M
	Net Debt
-6.10M	-12.44M	-19.49M	-33.95M	-43.95M	-28.87M
	Total Liabilities
231.84M	279.34M	144.40M	122.15M	114.32M	111.12M
	Stockholders Equity
258.51M	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

Technical Analysis Sentiment

Positive

Last Price22.06

Price Trends

50DMA

19.23

Positive

100DMA

19.86

Positive

200DMA

20.01

Positive

Market Momentum

MACD

0.74

Negative

RSI

63.95

Neutral

STOCH

66.65

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AVNW, the sentiment is Positive. The current price of 22.06 is above the 20-day moving average (MA) of 21.08, above the 50-day MA of 19.23, and above the 200-day MA of 20.01, indicating a bullish trend. The MACD of 0.74 indicates Negative momentum. The RSI at 63.95 is Neutral, neither overbought nor oversold. The STOCH value of 66.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CRNT	71 Outperform	$210.55M	9.51	15.02%	―	11.94%	377.86%
CLFD	68 Neutral	$539.82M	―	-0.68%	―	-2.14%	44.13%
AVNW	67 Neutral	$280.00M	―	-1.32%	―	12.39%	-123.62%
Sector *	62 Neutral	$11.80B	10.37	-7.29%	2.91%	7.39%	-7.96%
AUDC	61 Neutral	$285.82M	17.08	9.33%	3.74%	-1.13%	61.49%
GILT	61 Neutral	$334.12M	24.55	4.79%	―	13.49%	-39.61%
INSG	56 Neutral	$114.96M	22.68	111.75%	―	1.60%	―

* Technology Sector Average

Performance Comparison

AVNW

Aviat Networks

22.06

-8.35

-27.46%

AUDC

Audiocodes

9.63

-0.04

-0.41%

CRNT

Ceragon Networks

2.44

-0.09

-3.56%

CLFD

Clearfield

39.03

0.11

0.28%

GILT

Gilat

5.98

0.73

13.90%

INSG

Inseego

7.66

-0.27

-3.40%

Aviat Networks Corporate Events

Executive/Board Changes

Aviat Networks Board Member Resignation Announced

Neutral

Apr 22, 2025

On April 17, 2025, Aviat Networks announced that Asako Aoyama, a member of their Board of Directors, would resign effective April 22, 2025. This resignation may impact the company’s governance and strategic direction, affecting stakeholders’ interests.

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.