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Comtech Telecommunications (CMTL)
NASDAQ:CMTL
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Comtech Telecommunications
(NASDAQ:CMTL)
44Neutral
Comtech Telecommunications (CMTL) vs. S&P 500 (SPY)
Market Cap
$39.91M
Dividend YieldN/A
Average Volume (3M)417.14K
Price to Earnings (P/E)―
Beta (1Y)1.08
Revenue Growth-13.06%
EPS Growth-465.17%
CountryUS
Employees1,500
SectorTechnology
Sector Strength40
IndustryCommunication Equipment
Share Statistics
EPS (TTM)-9.59
Shares Outstanding29,346,600
10 Day Avg. Volume235,553
30 Day Avg. Volume417,144
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.11
Price to Cash Flow (P/CF)-60.80
P/FCF Ratio1.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$5.00Price Target Upside293.70% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Comtech Telecommunications Business Overview & Revenue Model
Company DescriptionComtech Telecommunications Corp. is a leading provider of advanced communication solutions. The company operates in the telecommunications sector, offering a wide range of products and services, including satellite communications, networking, and secure wireless systems. Comtech serves various industries, such as government, commercial, and enterprise, delivering technologies that enable reliable and secure communication across diverse environments.
How the Company Makes MoneyComtech Telecommunications generates revenue through the sale of its communication products and services. The company earns money by developing and providing advanced satellite and wireless networking solutions to its clients. Key revenue streams include government contracts, commercial sales, and long-term service agreements. Comtech's earnings are significantly influenced by its partnerships with governmental bodies and large enterprises, which rely on its technology for mission-critical operations. Additionally, the company benefits from ongoing maintenance and support contracts that provide a steady source of income.
Comtech Telecommunications Financial Statement Overview
Summary
Comtech Telecommunications faces significant financial challenges. The income statement reflects pressure on profitability with a negative net profit margin, and the cash flow statement indicates ongoing difficulties with negative operating and free cash flows. The balance sheet is somewhat stable with a manageable debt-to-equity ratio, but declining equity poses risks.Income Statement
The income statement reveals significant challenges for Comtech Telecommunications. The TTM data shows a gross profit margin of 20.89%, reflecting pressure on profitability, as gross profit has decreased over the periods. The net profit margin has significantly declined, with the TTM reporting a -56.16%, indicating considerable net losses. Revenue has also contracted over time, with the latest TTM revenue showing a decline from previous years. The negative EBIT and EBITDA margins further highlight operational struggles.35
Negative
Balance Sheet
The balance sheet shows a mixed financial position. The debt-to-equity ratio improved in the TTM to 0.28, suggesting a better leverage position compared to previous periods. However, the return on equity is negative due to continued net losses, which is a concern. The equity ratio is 16.70% in TTM, showing that equity financing is a significant part of the company's capital structure, but declining equity highlights potential risks.50
Neutral
Cash Flow
The cash flow statement indicates ongoing difficulties. The TTM operating cash flow is negative, reflecting challenges in generating cash from operations. Free cash flow is also negative, indicating that the company is not generating enough cash to cover capital expenditures. However, the free cash flow to net income ratio is 0.19, showing some ability to convert net income to free cash flow despite net losses.40
Negative
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 496.64M | 540.40M | 549.99M | 486.24M | 581.70M | 616.72M | Gross Profit |
| 103.78M | 157.18M | 184.46M | 179.84M | 213.96M | 226.83M | EBIT |
| -218.93M | -79.89M | -14.66M | -8.25M | 32.13M | 36.12M | EBITDA |
| -226.19M | -44.81M | 18.66M | -345.00K | -37.76M | 47.34M | Net Income Common Stockholders |
| -278.95M | -99.98M | -26.90M | -33.05M | -73.48M | 7.02M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 26.67M | 32.43M | 18.96M | 21.65M | 30.86M | 47.88M | Total Assets |
| 770.56M | 960.62M | 996.24M | 974.30M | 993.11M | 929.65M | Total Debt |
| 36.03M | 212.66M | 214.81M | 183.11M | 249.41M | 181.91M | Net Debt |
| 9.36M | 180.23M | 195.85M | 161.45M | 218.55M | 134.03M | Total Liabilities |
| 519.54M | 426.11M | 445.73M | 402.51M | 492.39M | 380.35M | Stockholders Equity |
| 128.71M | 486.33M | 550.51M | 571.79M | 500.72M | 549.30M |
| Cash Flow | Free Cash Flow | ||||
| -53.19M | -77.87M | -22.74M | -17.62M | -56.67M | 45.54M | Operating Cash Flow |
| -43.53M | -64.79M | -4.43M | 2.00M | -40.64M | 52.76M | Investing Cash Flow |
| -8.86M | 20.14M | -18.31M | -19.62M | -15.48M | -20.18M | Financing Cash Flow |
| 39.10M | 58.12M | 20.05M | 8.41M | 39.10M | -30.28M |
Comtech Telecommunications Technical Analysis
Negative
1.27
Price Trends
1.92
Negative
2.61
Negative
3.02
Negative
Market Momentum
-0.12
Positive
36.28
Neutral
6.17
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CMTL, the sentiment is Negative. The current price of 1.27 is below the 20-day moving average (MA) of 1.74, below the 50-day MA of 1.92, and below the 200-day MA of 3.02, indicating a bearish trend. The MACD of -0.12 indicates Positive momentum. The RSI at 36.28 is Neutral, neither overbought nor oversold. The STOCH value of 6.17 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CMTL.
Comtech Telecommunications Risk Analysis
Comtech Telecommunications disclosed 45 risk factors in its most recent earnings report. Comtech Telecommunications reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Comtech Telecommunications Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $37.93B | 25.65 | 7.85% | 2.34% | 9.82% | 22.33% | |
70 Outperform | $2.53B | 24.73 | 15.40% | 2.40% | 5.05% | 632.38% | |
67 Neutral | $326.14M | 12.55 | 8.58% | ― | 14.79% | 5.04% | |
59 Neutral | $4.25B | 264.92 | 1.40% | ― | 9.57% | ― | |
57 Neutral | $18.45B | 9.41 | -13.97% | 2.74% | 5.04% | -23.56% | |
54 Neutral | $1.08B | ― | -8.49% | ― | 19.02% | 76.67% | |
44 Neutral | $39.91M | ― | -53.44% | ― | -13.06% | -465.17% |
* Technology Sector Average
Performance Comparison
CMTL
Comtech Telecommunications
1.27
-1.55
-54.96%
GILT
Gilat
5.47
-0.48
-8.07%
LHX
L3Harris Technologies
200.75
-1.25
-0.62%
IRDM
Iridium Communications
22.65
-2.71
-10.69%
KTOS
Kratos Defense
28.92
10.59
57.77%
VSAT
ViaSat
7.70
-9.98
-56.45%
Comtech Telecommunications Earnings Call Summary
Earnings Call Date: Mar 12, 2025 | % Change Since: -40.38% | Next Earnings Date: Jun 4, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a company in transition, with significant efforts underway to improve operational efficiency and financial stability. While there are clear improvements and strategic initiatives yielding positive results, substantial financial challenges and lower sales compared to the previous year remain pressing issues.Highlights
Transformation Plan Gaining Traction
The transformation plan includes improving operational discipline, reducing the cost structure, and supporting high-margin business initiatives. Early evidence of progress is seen in improved financial flexibility and capital structure.
Improved Satellite and Space Segment Performance
The Satellite and Space segment reported a 25% sequential increase in sales, driven by higher sales of SATCOM solutions to the U.S. Army.
Significant New Contract Awards
Comtech was awarded sole source contracts in excess of $26 million for advanced next-generation Anti-Jam modems by L3Harris, supporting the U.S. Army and the U.S. Air Force.
Operational Improvements and Cost Reductions
There was a 10% reduction in segment staff and product rationalization in the Satellite and Space segment, leading to improved margins.
Financial Restructuring Efforts
The company secured a $40 million capital infusion and amended credit facilities to waive all defaults and reduce interest rates, saving approximately $5 million in near-term cash interest expense.
Lowlights
Breach of Financial Covenants
Comtech breached the net leverage ratio and the fixed charge coverage ratio covenants as of January 31st, putting the company in default on several loans.
Decline in Year-Over-Year Net Sales
Consolidated net sales were $126.6 million, down from $134.2 million a year ago. Net sales in both segments were lower relative to the prior year period.
Lower Gross Margins
Consolidated gross margins for the quarter were 26.7%, down from 32.2% in the second quarter of fiscal '24, despite improvements from the previous quarter.
Operating Losses
Consolidated operating loss was $10.3 million in the second quarter, compared to operating income of $3 million in the prior year period.
Book-to-Bill Ratio Below 1
The consolidated book-to-bill ratio was 0.63, indicating that bookings were lower than net sales for the quarter.
Company Guidance
During Comtech Telecom Corp's second quarter fiscal 2025 conference call, the company outlined various financial metrics and strategic initiatives. Consolidated net sales were reported at $126.6 million, a decrease from $134.2 million a year ago but an increase from $115.8 million in Q1 fiscal 2025. The company breached its net leverage and fixed charge coverage ratio covenants as of January 31st but managed to secure a new $40 million capital infusion to address these issues. Gross margins improved to 26.7% from 12.5% in the previous quarter, although they were lower than the 32.2% in the prior year period. Operating loss was reduced to $10.3 million from a $129.2 million loss in Q1, and consolidated adjusted EBITDA was $2.9 million, significantly better than the $19.4 million loss in the prior quarter. The satellite and space segment saw a 25% sequential increase in net sales, while the terrestrial and wireless segment experienced a decrease. The company's book-to-bill ratio was 0.63. Comtech also focused on restructuring efforts, improving operational discipline, and pursuing strategic alternatives to enhance its financial structure and corporate culture.Comtech Telecommunications Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
Comtech Telecommunications Enhances Financial Flexibility with Amendments
Positive
Mar 4, 2025
On March 3, 2025, Comtech Telecommunications Corp. announced amendments to its credit agreements, including a waiver of certain defaults and adjustments to financial covenants, such as reducing interest rate margins and liquidity requirements. Additionally, the company restructured its convertible preferred stock, exchanging Series B-2 for Series B-3 shares, which included board observer rights and information access for investors. These changes aim to strengthen Comtech’s financial flexibility and governance structure.
Executive/Board ChangesBusiness Operations and Strategy
Comtech Telecommunications Appoints David Kagan to Board
Positive
Feb 18, 2025
Comtech Telecommunications Corp. announced the appointment of David B. Kagan as an independent director to its Board, effective February 13, 2025. Kagan, with over 35 years of experience in the satellite communications industry, previously served as CEO of Globalstar where he achieved significant improvements and expanded the company’s service offerings. His expertise in satellite industry, capital markets, and strategic transactions is expected to contribute significantly to Comtech’s ongoing strategic transformation.
Executive/Board ChangesBusiness Operations and Strategy
Comtech Telecommunications Appoints New CEO for Transformation
Positive
Jan 13, 2025
Comtech Telecommunications Corp. announced the appointment of Kenneth Traub as the new President and CEO, replacing John Ratigan. Traub will lead a comprehensive transformation to improve operational discipline, streamline product lines, and optimize staffing, expected to result in cost savings and working capital efficiencies. The company will also explore strategic alternatives to enhance its strategic focus and strengthen its balance sheet. The changes aim to position Comtech for sustainable growth, particularly in its Satellite & Space Communications and Terrestrial & Wireless Networks segments, while supporting profitable growth initiatives in public safety technologies.
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.