Harmonic (HLIT) AI Stock Analysis

• Market Cap: $1.21B
• Dividend Yield: N/A
• Average Volume (3M): 1.01M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.31
• 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: 1,371,175
• 30 Day Avg. Volume: 1,009,394
• 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: 0.96
• Enterprise Value/Revenue: 2.27
• Enterprise Value/Gross Profit: 4.21
• Enterprise Value/Ebitda: 30.29
• 1Y Price Target: $13.00
• Price Target Upside: 18.83% 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: $11.50 ▲(5.12% 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 Free Cash Flow

Sustained operating and free cash flow (TTM OCF ~$108M; FCF ~$97M) provides Harmonic with durable liquidity to fund R&D, DOCSIS 4.0 ramps, and strategic priorities. This cash generation supports buybacks, reduces refinancing risk, and cushions earnings volatility over coming quarters.

Record Bookings & Backlog

A 3.5x book-to-bill quarter and a $573.8M backlog (+73% YoY) create multi-quarter revenue visibility, with management expecting ~$307M to convert within 12 months. That backlog materially reduces near-term demand uncertainty and supports sustainable revenue growth trajectories.

Product Traction & Market Position

Live cOS deployments and DOCSIS 4.0 field validation (Vodafone) indicate product-market fit and execution at scale. Combined with reported Rest-of-World growth and a high NPS, these factors strengthen Harmonic’s competitive position in broadband infrastructure and support durable customer wins.

Negative Factors

Customer Concentration

A single customer accounting for more than half of a quarter's revenue creates a persistent concentration risk that can produce large revenue volatility and weaken pricing leverage. Contract timing or a loss would materially affect short- and medium-term revenue and margins.

Steep Recent Revenue Decline

A ~43% TTM revenue decline and a switch to a net loss compress operating leverage and drive negative ROE. If revenue recovery falters, prolonged earnings weakness could erode equity cushions and constrain investment in product and go-to-market initiatives needed for sustainable growth.

Memory & Transition Cost Headwinds

Anticipated memory cost pressures (~$6M) plus ~$10M of stranded/transition costs from the Video sale are structural margin drags in 2026. These items reduce gross and operating margins and can delay normalization of profitability even as revenue ramps from backlog conversion.

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 generates revenue through multiple channels, primarily by selling hardware and software solutions for video processing and delivery. Key revenue streams include licensing fees from its software solutions, sales of proprietary hardware for video encoding and streaming, and ongoing service and support contracts. Additionally, Harmonic benefits from strategic partnerships with major telecommunications and media companies, which provide a steady customer base for its products. The company also engages in subscription-based models for its cloud services, allowing for consistent revenue generation as clients pay for ongoing access to its technology. Overall, Harmonic's earnings are bolstered by its focus on innovation, enabling it to capture emerging market opportunities in the evolving landscape of media consumption.

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: Positive
• Last Price: 10.94
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HLIT, the sentiment is Positive. The current price of 10.94 is above the 20-day moving average (MA) of 10.34, above the 50-day MA of 10.16, and above the 200-day MA of 9.76, indicating a bullish trend. The MACD of 0.17 indicates Negative momentum. The RSI at 60.69 is Neutral, neither overbought nor oversold. The STOCH value of 30.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HLIT.

Harmonic Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ITRN	79 Outperform	$944.15M	16.89	28.62%	4.38%	5.20%	9.14%
DGII	76 Outperform	$1.90B	45.16	6.84%	―	1.46%	78.77%
ADTN	64 Neutral	$803.37M	-19.10	-30.48%	―	14.33%	83.32%
CLFD	64 Neutral	$432.60M	-67.88	3.07%	―	-9.94%	30.96%
HLIT	62 Neutral	$1.21B	-28.11	2.76%	―	1.93%	-43.22%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Harmonic Corporate Events

Harmonic Announces Sale of Video Business to MediaKind

On December 8, 2025, Harmonic Inc. announced a binding offer from MediaKind to acquire its Video Business for approximately $145 million in cash. This strategic transaction aims to sharpen Harmonic’s focus on its core Broadband business, providing financial flexibility and advancing growth initiatives. The acquisition is expected to close in the first half of 2026, subject to regulatory approvals and a French employee works council consultation process. The deal is anticipated to enhance MediaKind’s product solutions and innovation capabilities, positioning it as a leading independent streaming infrastructure company.

The most recent analyst rating on (HLIT) stock is a Hold with a $11.00 price target. To see the full list of analyst forecasts on Harmonic stock, see the HLIT Stock Forecast page.