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Harmonic Inc. (HLIT)
NASDAQ:HLIT
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Harmonic (HLIT) AI Stock Analysis

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HLIT

Harmonic

(NASDAQ:HLIT)

Rating:78Outperform
Price Target:
$10.50
▲(10.64% Upside)
Harmonic's overall stock score reflects strong financial performance and positive earnings call highlights, including exceeding revenue guidance and strategic advancements. While technical analysis shows mixed signals, and valuation is reasonable, the absence of a dividend yield and challenges like slower broadband upgrades and negative free cash flow slightly temper the outlook.
Positive Factors
Earnings
HLIT beat lowered 2Q revenue/EPS estimates by +8%/+$.07 against consensus.
Negative Factors
Customer Dependency
HLIT's fate lies with its two major customers, Comcast and Charter, who remain largely stalled.
Guidance and Outlook
The company has withdrawn its 2025 guidance due to tariffs, indicating uncertainty in its future outlook.
Revenue Performance
Cable upgrade spending continues to be anemic as HLIT Broadband revenues missed $100MM for the 7th in 10 quarters.

Harmonic (HLIT) vs. SPDR S&P 500 ETF (SPY)

Harmonic Business Overview & Revenue Model

Company DescriptionHarmonic 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 MoneyHarmonic generates revenue through multiple streams, primarily from the sale of its video processing and delivery solutions, which include software, hardware, and cloud services. The company's revenue model is largely based on the licensing of its technology, subscription services, and professional services related to system integration and support. Key revenue streams consist of the sale of its advanced media processing solutions, contributions from its cloud-based services, and ongoing maintenance contracts. Significant partnerships with major telecommunications and media companies further bolster Harmonic's earnings, as these collaborations enable the company to expand its reach and enhance its service offerings.

Harmonic Earnings Call Summary

Earnings Call Date:Jul 28, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 03, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong performance in revenue and strategic advancements across both Broadband and Video segments. Despite uncertainties in global trade and tariffs, the company's innovative solutions and record achievements in fiber and video have set a positive outlook for future growth. However, challenges like slower broadband upgrades and negative free cash flow slightly tempered the optimism.
Q2-2025 Updates
Positive Updates
Strong Revenue and Growth Exceeding Guidance
Revenue for the quarter reached $138 million, driven by record fiber performance and year-over-year growth in Broadband and Video segments. This exceeded the company's guidance.
Successful Share Repurchase Program
The company returned capital to shareholders by repurchasing an additional $14 million of outstanding common shares, bringing total repurchases under the current program to $50.1 million.
Record Fiber Revenue and New Product Launch
The company delivered record fiber revenue and launched the SeaStar optical node for MDUs, enhancing deployment options for operators.
Innovative Advancements in Broadband
Harmonic showcased a 14 gigabit per second throughput on Unified DOCSIS 4.0 and introduced a new PTP-less timing solution, enhancing network efficiency.
Strong Video Segment Performance
The Video segment delivered $51.1 million in revenue, with SaaS streaming business reaching a record $15.4 million, driven by live sports streaming expansion.
Negative Updates
Global Trade and Tariff Uncertainty
The global trade environment remains uncertain, with potential tariff impacts on the Broadband business, although actual impacts were less than initially anticipated.
Slower Broadband Upgrade Activity
The company expects a moderate pace of broadband upgrades in the near term, impacting short-term revenue growth.
Free Cash Flow Challenges
Free cash flow during the quarter was negative $15.5 million, despite the company's strong revenue performance.
Company Guidance
During the Second Quarter 2025 Harmonic Earnings Conference Call, the company reported revenue of $138 million, surpassing their guidance. This was driven by a record quarter in fiber, significant growth in the Broadband rest of world segment, and strong performance in both appliances and SaaS streaming. The Broadband segment reported revenue of $86.9 million with a gross margin of 46.5%, while the Video segment brought in $51.1 million in revenue, achieving a gross margin of 67%. The company closed the quarter with a backlog and deferred revenue of $504.5 million. Despite minimal impact from tariffs this quarter, potential future impacts remain uncertain. Harmonic anticipates revenue growth to resume in 2026, bolstered by Unified DOCSIS 4.0 adoption and recent customer wins. During the quarter, they repurchased $14 million of common shares, bringing total repurchases under the current program to $50.1 million. Looking ahead, they expect Q3 Broadband revenue between $75 million to $85 million and Video revenue between $45 million to $50 million.

Harmonic Financial Statement Overview

Summary
Harmonic demonstrates a strong financial profile with solid income statement performance, a stable balance sheet, and robust cash flow generation. The company shows consistent revenue and profit growth, efficient operations, and effective cash management. However, modest leverage requires ongoing attention to maintain financial health.
Income Statement
85
Very Positive
Harmonic shows a solid performance in its income statement with a strong gross profit margin of 55.4% and a net profit margin of 9.96% for the TTM period. The revenue growth rate from the previous year is 1.53%, indicating steady growth. EBIT and EBITDA margins are healthy at 14.84% and 14.97%, respectively, reflecting efficient operations. The consistent revenue and profit growth alongside robust margins suggest a strong competitive position.
Balance Sheet
75
Positive
The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.30, indicating modest leverage. The return on equity (ROE) stands at 15.38%, showcasing effective use of equity. However, the equity ratio of 56.98% signifies a strong reliance on equity financing, enhancing financial stability. Despite these strengths, careful monitoring of liabilities and debt is advised to maintain balance.
Cash Flow
80
Positive
Harmonic's cash flow statement reveals a robust operating cash flow to net income ratio of 1.88, indicating strong cash generation relative to profits. The free cash flow growth rate is impressive at 124.04%, reflecting significant improvement in cash generation. The free cash flow to net income ratio of 1.72 further underscores efficient cash management. These metrics suggest a solid cash flow position, supporting future growth initiatives.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue689.08M678.72M607.91M624.96M507.15M378.83M
Gross Profit381.75M365.92M312.55M315.88M259.74M195.00M
EBITDA112.94M77.40M34.09M61.65M32.54M999.00K
Net Income68.65M39.22M83.99M28.18M13.25M-29.27M
Balance Sheet
Total Assets783.35M796.51M768.21M710.02M693.69M591.52M
Cash, Cash Equivalents and Short-Term Investments123.92M101.46M84.27M89.59M133.43M98.64M
Total Debt133.25M148.31M156.05M160.78M190.21M184.79M
Total Liabilities336.94M331.25M331.33M385.51M396.89M333.22M
Stockholders Equity446.40M465.26M436.87M324.51M296.80M258.30M
Cash Flow
Free Cash Flow118.16M52.73M-1.42M-3.77M28.04M6.96M
Operating Cash Flow129.16M61.92M7.06M5.48M41.02M39.16M
Investing Cash Flow-11.00M-9.19M-8.47M-1.29M-12.97M-32.20M
Financing Cash Flow-47.23M-33.27M-4.99M-43.13M7.94M-2.11M

Harmonic Technical Analysis

Technical Analysis Sentiment
Positive
Last Price9.49
Price Trends
50DMA
9.12
Positive
100DMA
9.11
Positive
200DMA
10.37
Negative
Market Momentum
MACD
0.07
Negative
RSI
59.98
Neutral
STOCH
90.39
Negative
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 9.49 is above the 20-day moving average (MA) of 8.93, above the 50-day MA of 9.12, and below the 200-day MA of 10.37, indicating a neutral trend. The MACD of 0.07 indicates Negative momentum. The RSI at 59.98 is Neutral, neither overbought nor oversold. The STOCH value of 90.39 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HLIT.

Harmonic Risk Analysis

Harmonic disclosed 36 risk factors in its most recent earnings report. Harmonic 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

Harmonic Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$1.26B29.867.21%-2.37%147.46%
78
Outperform
$1.07B16.1016.36%24.14%16.17%
70
Outperform
$731.29M13.0429.11%4.90%3.30%9.66%
61
Neutral
$35.62B7.50-10.94%1.87%8.86%-10.27%
59
Neutral
$3.65B17.08%-11.03%91.98%
57
Neutral
$742.88M-53.68%3.52%81.33%
51
Neutral
$454.77M1,830.000.07%5.72%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HLIT
Harmonic
9.49
-5.17
-35.27%
ADTN
Adtran
9.34
3.61
63.00%
CLFD
Clearfield
32.73
-4.13
-11.20%
DGII
Digi International
34.27
5.20
17.89%
ITRN
Ituran Location And Control
36.36
9.50
35.37%
COMM
CommScope Holding
16.13
11.91
282.23%

Harmonic Corporate Events

Executive/Board ChangesShareholder Meetings
Harmonic Approves Key Proposals at Annual Meeting
Neutral
Jun 17, 2025

Harmonic held its 2025 Annual Meeting of Stockholders virtually on June 12, 2025. During the meeting, all proposed matters were approved, including the election of eight directors, the advisory approval of executive compensation, an amendment to the Employee Stock Purchase Plan, the 2025 Equity Incentive Plan, and the ratification of Ernst & Young LLP as the independent auditor for the fiscal year ending December 31, 2025.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Aug 23, 2025