Harmonic (HLIT) AI Stock Analysis

• Market Cap: $992.18M
• Dividend Yield: N/A
• Average Volume (3M): 1.15M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.35
• Revenue Growth: 1.93%
• EPS Growth: -43.22%
• Country: US
• Employees: 901
• Sector: Technology
• Sector Strength: 88
• Industry: Communication Equipment
• EPS (TTM): 0.14
• Shares Outstanding: 110,242,355
• 10 Day Avg. Volume: 1,007,708
• 30 Day Avg. Volume: 1,151,787
• PEG Ratio: 0.12
• Price to Book (P/B): 2.93
• Price to Sales (P/S): 3.12
• P/FCF Ratio: 11.60
• Enterprise Value/Market Cap: 1.04
• Enterprise Value/Revenue: 2.02
• Enterprise Value/Gross Profit: 3.75
• Enterprise Value/Ebitda: 26.97
• 1Y Price Target: $13.00
• Price Target Upside: 44.44% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 0.72
• Revenue Forecast (FY): $668.57M

• Rating: 62 Neutral
• Price Target: $9.50 ▲(5.56% Upside)
• Action: Downgraded Date: 02/21/26
• Date: Action: Downgraded 02/21/26

The score reflects a sharp TTM profitability and revenue setback that weighs on financial performance, partially offset by strong current cash generation and manageable leverage. Technicals are supportive with the stock trading above major moving averages and positive momentum. The latest earnings call improved the outlook via strong bookings/backlog and upbeat 2026 guidance, though concentration and cost headwinds remain. Valuation is reasonable but not clearly compelling at a ~25 P/E and no dividend yield data.

Positive Factors

Strong cash generation

Harmonic's recent TTM operating cash flow (~$108M) and FCF (~$97M) provide durable liquidity to fund R&D, support product transitions, and service obligations during cyclical revenue swings. Robust cash generation underpins strategic optionality—buybacks, capex, M&A or debt flexibility—even if earnings remain uneven.

Record bookings and backlog

A 3.5x book-to-bill quarter with backlog of $573.8M (up 73% YoY) gives multi-quarter revenue visibility and converts into predictable near-term demand. With $307M expected to convert within 12 months, the backlog materially supports the company's 2026 growth guidance and reduces execution risk on sales cadence.

Strategic focus via Video divestiture

Divesting Video and resegmenting to a single Broadband business is a structural shift concentrating management, R&D, and capital on broadband growth markets (DOCSIS 4.0, fiber, SaaS). This simplifies comparability, accelerates resource allocation to addressable SAM expansion and strengthens capital flexibility via sale proceeds.

Negative Factors

Customer concentration

Reliance on a single customer for >50% of quarter revenue creates substantial revenue volatility and bargaining power risk. Delays, price pressure, or contract changes from that account could cause material swings in top-line, working capital and margin outcomes for multiple quarters.

Sharp revenue and profit decline

A steep TTM revenue decline with a transition to a negative net margin signals weakened demand or contract timing shifts and erodes operating leverage. Sustained top-line weakness would pressure reinvestment capacity and could turn current cash generation into a longer-term constraint if recovery stalls.

Margin & transition cost headwinds

Management built material headwinds into guidance: memory cost inflation, stranded costs from the Video sale, and tariff/supply timing risks. These structural cost pressures compress gross and operating margins and can dampen reinvestment or free cash flow conversion until costs normalize or pricing power improves.

Harmonic Business Overview & Revenue Model

Company Description

Harmonic Inc., together with its subsidiaries, provide video delivery software, products, system solutions, and services worldwide. The company operates in two segments, Video and Cable Access. The Video segment sells video processing, production, and playout solutions and services to cable operators, and satellite and telecommunications Pay-TV service providers, as well as to broadcast and media, including streaming media companies. This segment's video processing appliance solutions include network management and application software, and hardware products, such as encoders, video servers, high-density stream processing systems, and edge processors. This segment also provides software-as-a-service (SaaS) solutions, which enables the packaging and delivery of streaming services, including live streaming, video-on-demand, catch-up TV, start-over TV, network-DVR, and cloud-DVR services through HTTP streaming to various device along with dynamic and personal ad insertion. The Cable Access segment offers CableOS software-based cable access solutions; and CableOS central cloud services primarily to cable operators. Its products enable customers to create, prepare, store, playout, and deliver a range of broadcast and streaming video services to consumer devices, including televisions, personal computers, laptops, tablets, and smart phones. The company also provides technical support and professional services, such as maintenance and support, consulting, implementation, program management, technical design and planning, building and site preparation, integration and equipment installation, end-to-end system testing, and training. It sells its products through its direct sales force, as well as through independent resellers and systems integrators. The company was incorporated in 1988 and is headquartered in San Jose, California.

How the Company Makes Money

Harmonic makes money primarily by selling (1) product revenue and (2) services and support tied to its installed base and ongoing customer operations. Product revenue includes sales of video infrastructure solutions (e.g., video processing/encoding, playout, streaming/OTT and cloud video platform components) and broadband access/network products used by operators to deploy and upgrade their networks. Services revenue includes professional services (implementation, integration, and deployment assistance), maintenance and technical support contracts, and, where applicable, software subscriptions, licenses, and cloud/SaaS usage associated with its software and cloud video offerings. Revenue is driven by deployments and upgrades at large service providers and media customers, recurring support/service agreements on previously sold systems, and expanded adoption of software/cloud solutions that can create ongoing subscription or usage-based fees. Specific partnership terms or customer-by-customer arrangements are not publicly detailed in a single standardized format; null.

Harmonic Financial Statement Overview

Summary

Mixed fundamentals: the income statement weakened sharply in TTM with a steep revenue decline (-43.3%) and a swing to a net loss (-8.5% margin), but cash generation is strong (TTM operating cash flow ~$108M; free cash flow ~$97M) and leverage appears manageable (TTM debt-to-equity ~0.35).

Income Statement

Results deteriorated meaningfully in TTM (Trailing-Twelve-Months): revenue fell sharply (-43.3%) and the company swung to a net loss (-8.5% net margin) despite holding gross margin roughly steady (~53.9%). Operating profitability also compressed versus 2024 (EBIT margin ~4.7% vs ~9.6% in 2024; EBITDA margin ~7.1% vs ~11.4%), indicating weaker operating leverage. The longer history shows the business can be profitable (notably 2023–2024), but the latest period reflects a clear setback in both growth and earnings quality.

Balance Sheet

Leverage looks manageable with debt-to-equity around ~0.35 in TTM (Trailing-Twelve-Months), improved from higher levels earlier in the cycle (e.g., ~0.72 in 2020). Equity remains sizable relative to debt, supporting balance-sheet flexibility. The key weakness is profitability-driven: return on equity is negative in TTM (Trailing-Twelve-Months) due to losses, which can pressure capital strength if it persists.

Cash Flow

Cash generation is a relative bright spot: TTM (Trailing-Twelve-Months) operating cash flow (~$108M) and free cash flow (~$97M) are strong and materially better than most prior years, providing liquidity and optionality. However, free cash flow declined versus 2024 (-27.4%), and cash flow trends have been volatile historically (including negative free cash flow in 2022–2023). Overall, cash flow is currently healthy but not yet consistently durable.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	360.52M	678.72M	607.91M	624.96M	507.15M
Gross Profit	174.75M	365.92M	312.55M	315.88M	259.74M
EBITDA	23.74M	77.40M	34.09M	61.65M	32.55M
Net Income	-43.31M	39.22M	83.99M	28.18M	13.25M
Balance Sheet
Total Assets	718.48M	796.51M	768.21M	710.02M	693.69M
Cash, Cash Equivalents and Short-Term Investments	124.11M	101.46M	84.27M	89.59M	133.43M
Total Debt	147.84M	148.31M	156.05M	160.78M	190.21M
Total Liabilities	335.24M	331.25M	331.33M	385.51M	396.89M
Stockholders Equity	383.25M	465.26M	436.87M	324.51M	296.80M
Cash Flow
Free Cash Flow	96.89M	52.73M	-1.42M	-3.77M	28.04M
Operating Cash Flow	107.97M	61.92M	7.06M	5.48M	41.02M
Investing Cash Flow	-11.08M	-9.19M	-8.47M	-1.29M	-12.97M
Financing Cash Flow	-81.39M	-33.27M	-4.99M	-43.13M	7.94M

Harmonic Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 9.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HLIT, the sentiment is Negative. The current price of 9 is below the 20-day moving average (MA) of 9.83, below the 50-day MA of 10.02, and below the 200-day MA of 9.77, indicating a bearish trend. The MACD of -0.28 indicates Positive momentum. The RSI at 34.13 is Neutral, neither overbought nor oversold. The STOCH value of 35.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HLIT.

Harmonic Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ITRN	82 Outperform	$966.63M	14.75	28.06%	4.38%	5.20%	9.14%
DGII	76 Outperform	$1.80B	34.52	6.76%	―	1.46%	78.77%
CLFD	64 Neutral	$380.04M	―	-2.61%	―	-9.94%	30.96%
HLIT	62 Neutral	$992.18M	-25.95	-10.08%	―	1.93%	-43.22%
ADTN	62 Neutral	$924.36M	-15.18	-30.65%	―	14.33%	83.32%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Harmonic Corporate Events

Harmonic Advances Broadband Focus After Video Business Divestiture

On December 8, 2025, Harmonic Inc. entered into a Put Option Agreement to sell its Video business to LeoneMedia Inc. (MediaKind), with the transaction expected to close in the first half of 2026, subject to customary conditions including French works council consultation. The company has classified the Video unit as discontinued operations and resegmented its reporting so that continuing operations now comprise a single Broadband segment.

To support investors’ and analysts’ financial modeling, Harmonic has released unaudited supplemental quarterly financial data for 2025 that excludes the Video business and reflects only continuing operations. The company stressed that this historical information is a reclassification for presentation purposes and does not revise or restate previously filed consolidated financial statements or non-GAAP measures for any prior period.

The most recent analyst rating on (HLIT) stock is a Hold with a $10.50 price target. To see the full list of analyst forecasts on Harmonic stock, see the HLIT Stock Forecast page.