Comtech Telecommunications (CMTL) AI Stock Analysis

• Market Cap: $41.97M
• Dividend Yield: N/A
• Average Volume (3M): 194.12K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.07
• Revenue Growth: -13.06%
• EPS Growth: -465.17%
• Country: US
• Employees: 1,500
• Sector: Technology
• Sector Strength: 69
• Industry: Communication Equipment
• EPS (TTM): -9.59
• Shares Outstanding: 29,346,600
• 10 Day Avg. Volume: 156,584
• 30 Day Avg. Volume: 194,121
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 10.80
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 2.88
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $3.00
• Price Target Upside: 109.79% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

Comtech Telecommunications faces substantial financial and operational challenges. The most significant concern is the company's negative net profit margin and cash flow issues, reflecting severe financial strain. Technical indicators suggest a bearish outlook, and the negative P/E ratio highlights valuation risks. While restructuring efforts and corporate changes provide some positive momentum, the overall outlook remains cautious.

Comtech Telecommunications Business Overview & Revenue Model

Company Description

Comtech Telecommunications Corp., together with its subsidiaries, designs, develops, produces, and markets products, systems, and services for communications solutions in the United States and internationally. It operates in two segments, Commercial Solutions and Government Solutions. The Commercial Solutions segment offers satellite ground station technologies, including single channel per carrier and time division multiple access modems, amplifiers, frequency converters, and network software to modulate, demodulate, and amplify signals, as well as to carry voice, video, and/or data over networks; and public safety and location technologies, such as 911 call handling and mapping solutions that allow cellular carriers and voice over the Internet carriers to deliver emergency calls to public safety emergency call centers. The Government Solutions segment provides tactical satellite-based networks, such as satellite modems, ruggedized routers, and solid-state drives; sustainment services for the secret Internet Protocol router and non-classified Internet Protocol router access point; and small aperture terminals. This segment also offers high-performance transmission technologies that are used in communication systems comprising electronic warfare, radar, and identification friend or foe (IFF); troposcatter technologies for satellite communication; and high-power radio frequency microwave amplifiers and related switching control technologies that are used in electronic warfare, communications, radar, IFF, and medical applications. The company serves satellite systems integrators, wireless and other communication service providers, satellite broadcasters, prime contractors and system suppliers, medical equipment companies, aviation industry system integrators, oil companies, and domestic and international defense and government customers, as well as end-customers. Comtech Telecommunications Corp. was founded in 1967 and is headquartered in Melville, New York.

How the Company Makes Money

Comtech 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.

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.

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.

Breakdown
Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
540.40M	549.99M	486.24M	581.70M	616.72M
	Gross Profit
157.18M	184.46M	179.84M	213.96M	226.83M
	EBIT
-79.89M	-14.66M	-8.25M	32.13M	36.12M
	EBITDA
-44.81M	18.66M	-345.00K	-37.76M	47.34M
	Net Income Common Stockholders
-99.98M	-26.90M	-33.05M	-73.48M	7.02M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
32.43M	18.96M	21.65M	30.86M	47.88M
	Total Assets
912.43M	996.24M	974.30M	993.11M	929.65M
	Total Debt
212.66M	214.81M	183.11M	249.41M	181.91M
	Net Debt
180.23M	195.85M	161.45M	218.55M	134.03M
	Total Liabilities
426.11M	445.73M	402.51M	492.39M	380.35M
	Stockholders Equity
486.33M	550.51M	571.79M	500.72M	549.30M
Cash Flow		Free Cash Flow
-77.87M	-22.74M	-17.62M	-56.67M	45.54M
	Operating Cash Flow
-64.79M	-4.43M	2.00M	-40.64M	52.76M
	Investing Cash Flow
20.14M	-18.31M	-19.62M	-15.48M	-20.18M
	Financing Cash Flow
58.12M	20.05M	8.41M	39.10M	-30.28M

Comtech Telecommunications Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.43
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 1.43 is above the 20-day moving average (MA) of 1.36, below the 50-day MA of 1.65, and below the 200-day MA of 2.87, indicating a neutral trend. The MACD of -0.08 indicates Negative momentum. The RSI at 46.76 is Neutral, neither overbought nor oversold. The STOCH value of 77.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CMTL.

Comtech Telecommunications Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	60 Neutral	$10.95B	10.52	-7.07%	3.00%	7.30%	-12.04%
OCC	52 Neutral	$25.17M	―	-18.07%	―	-1.72%	-1591.92%
UTSI	49 Neutral	$24.34M	―	-9.04%	―	-30.95%	-8.17%
AMPG	46 Neutral	$35.39M	―	-35.04%	―	-38.99%	-323.86%
AIRG	45 Neutral	$46.58M	―	-27.85%	―	8.14%	33.76%
CMTL	42 Neutral	$41.97M	―	-53.44%	―	-13.06%	-465.17%

Comtech Telecommunications Corporate Events

Comtech Telecommunications Enhances Financial Flexibility with Amendments

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.

Comtech Telecommunications Appoints David Kagan to Board

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.