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Harmonic (HLIT)
:HLIT

Harmonic (HLIT) AI Stock Analysis

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Harmonic

(NASDAQ:HLIT)

Rating:75Outperform
Price Target:
$10.50
▲(10.99%Upside)
Harmonic's overall stock score reflects strong financial performance and positive earnings call highlights, but is tempered by mixed technical analysis signals and valuation concerns due to moderate P/E and lack of dividend yield. Earnings call uncertainties, particularly regarding tariffs and guidance, also impact confidence levels.
Positive Factors
Competitive Position
The Comcast transition to D4U is seen as improving HLIT's strong competitive market position.
Financial Performance
HLIT delivered a very strong 4Q24 with revenue increasing by 33%.
Future Potential
Strong upside is anticipated when industry spending returns.
Negative Factors
Customer Demand
A weaker F25 guide is driven by soft demand from its two major customers, Comcast and Charter.
Guidance and Outlook
The company has withdrawn its 2025 guidance due to tariffs, indicating uncertainty in its future outlook.
Order Decline
Total orders declined by 24% year over year.

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 Inc. generates revenue through the sale of its video and cable access products, along with associated software and services. The company's key revenue streams include the sale of video processing and delivery solutions to broadcasters, streaming service providers, and cable operators. Additionally, Harmonic provides subscription-based cloud services for video delivery, which further contributes to its earnings. The company also engages in strategic partnerships and collaborations with technology and media companies to enhance its product offerings and expand its market reach. Maintenance and support services provide an additional revenue source, ensuring ongoing customer engagement and satisfaction.

Harmonic Earnings Call Summary

Earnings Call Date:Apr 28, 2025
(Q1-2025)
|
% Change Since: 1.61%|
Next Earnings Date:Aug 04, 2025
Earnings Call Sentiment Neutral
The earnings call showcased strong revenue and EBITDA growth, significant share repurchases, and achievements in customer diversification and fiber bookings. However, concerns about potential tariff impacts, broadband deployment delays, and uncertainties in full-year guidance were also highlighted.
Q1-2025 Updates
Positive Updates
Strong Revenue and EBITDA Growth
The company reported a revenue increase of 9% year-over-year to $133.1 million, with adjusted EBITDA of $21 million, both exceeding expectations.
Significant Share Repurchases
Harmonic returned $36 million to shareholders through share repurchases, contributing to a cash balance of $149 million at quarter-end.
Broadband Segment Growth
Broadband revenue reached $84.9 million, a 7.6% growth year-over-year, with gross margin expanding to 55.5%.
Video Segment Performance
Video revenue increased by 11.8% year-over-year to $48.3 million, with a gross margin of 66.4%, supported by appliance refresh deals and cost optimization.
Record Fiber Bookings
The company booked a record quarter for fiber, with three new pure fiber wins and eight expansion projects.
Successful Customer Diversification
Seven new logos were added, including a top-five North American MSO and a Tier 1 Latin American operator.
Negative Updates
Tariff Impact Concerns
The potential tariff exposure in the broadband segment could have significant impacts, with an estimated $3 million tariff impact in Q2 margins.
Broadband Deployment Delays
2025 is expected to be a below-trend revenue year for broadband due to Unified 4.0 timing and its effect on customer deployments.
Uncertain Full-Year Guidance
Due to tariff uncertainties, the company did not provide updated annual guidance, highlighting a lack of visibility for the second half of 2025.
Book-to-Bill Ratio Below Historical Average
The book-to-bill ratio was 0.9 times, below the historical benchmark of greater than 1 time, indicating potential challenges in order booking.
Company Guidance
During the first quarter of fiscal year 2025, Harmonic reported a revenue of $133 million, surpassing Video revenue expectations, and achieved an adjusted EBITDA of $21 million, both metrics exceeding previous outlooks. Operating cash flow was strong, increasing the cash balance to $149 million, even after $36 million was returned to shareholders through share repurchases. The company closed the quarter with a backlog and deferred revenue of $485 million. Revenue from the broadband segment was $84.9 million, marking a 7.6% growth year-over-year with a gross margin expansion to 55.5%. The Video segment posted a revenue of $48.3 million, an 11.8% increase year-over-year, with Video SaaS revenue contributing $14.8 million, up 15% year-over-year. Despite current tariff uncertainties, Harmonic remains confident in its long-term growth strategy, anticipating resumed revenue growth in 2026.

Harmonic Financial Statement Overview

Summary
Harmonic exhibits strong financial health with impressive revenue and profit growth, improved margins, and efficient cash flow management. Despite a slight decline in total assets, the financial performance remains robust overall.
Income Statement
85
Very Positive
Harmonic's income statement reflects strong revenue growth with a 13.5% increase in TTM over the previous year. Gross profit margin improved to 54.81% from 54.04%, and net profit margin showed significant improvement to 7.72%, driven by a notable increase in net income. The EBIT and EBITDA margins also improved, indicating enhanced operational efficiency. Despite these strengths, the company must maintain this trajectory to ensure long-term profitability.
Balance Sheet
78
Positive
The balance sheet of Harmonic displays a solid equity position with an equity ratio of 57.67%, indicating financial stability. The debt-to-equity ratio stands at 0.30, reflecting manageable leverage levels. Return on equity improved to 11.93%, highlighting effective use of equity to generate profits. However, total assets declined slightly, which could impact future growth.
Cash Flow
80
Positive
Harmonic's cash flow statement is robust, with free cash flow growing significantly by 107.7% in TTM. The operating cash flow to net income ratio of 2.23 indicates strong cash generation relative to earnings. The free cash flow to net income ratio of 2.06 further underscores the company's solid cash flow management. Continued focus on cash flow sustainability will be crucial moving forward.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue689.80M678.72M607.91M624.96M507.15M378.83M
Gross Profit378.19M365.92M312.55M315.88M259.74M195.00M
EBITDA94.25M77.40M34.09M61.65M32.54M999.00K
Net Income53.25M39.22M83.99M28.18M13.25M-29.27M
Balance Sheet
Total Assets773.75M796.51M768.21M710.02M693.69M591.52M
Cash, Cash Equivalents and Short-Term Investments148.71M101.46M84.27M89.59M133.43M98.64M
Total Debt134.47M148.31M156.05M160.78M190.21M151.36M
Total Liabilities327.62M331.25M331.33M385.51M396.89M333.22M
Stockholders Equity446.13M465.26M436.87M324.51M296.80M258.30M
Cash Flow
Free Cash Flow109.55M52.73M-1.42M-3.77M28.04M6.96M
Operating Cash Flow118.70M61.92M7.06M5.48M41.02M39.16M
Investing Cash Flow-9.15M-9.19M-8.47M-1.29M-12.97M-32.20M
Financing Cash Flow-45.47M-33.27M-4.99M-43.13M7.94M-2.11M

Harmonic Technical Analysis

Technical Analysis Sentiment
Negative
Last Price9.46
Price Trends
50DMA
9.28
Negative
100DMA
9.52
Negative
200DMA
11.19
Negative
Market Momentum
MACD
0.13
Negative
RSI
46.52
Neutral
STOCH
70.94
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 9.46 is above the 20-day moving average (MA) of 9.33, above the 50-day MA of 9.28, and below the 200-day MA of 11.19, indicating a bearish trend. The MACD of 0.13 indicates Negative momentum. The RSI at 46.52 is Neutral, neither overbought nor oversold. The STOCH value of 70.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
$1.04B20.9712.45%20.53%-27.75%
74
Outperform
$1.28B28.175.32%-2.09%76.96%
73
Outperform
$1.44B29.9024.36%1.23%4.90%9.91%
72
Outperform
$1.24B20.058.68%3.30%
63
Neutral
£501.37M10.64-8.56%179.69%4.36%-29.71%
61
Neutral
$1.69B17.08%-19.10%93.30%
57
Neutral
$3.14B-30.47%45.57%-35.70%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HLIT
Harmonic
9.46
-2.58
-21.43%
VECO
Veeco
21.27
-27.20
-56.12%
VRNT
Verint Systems
21.79
-8.81
-28.79%
COMM
CommScope Holding
7.93
6.64
514.73%
ATEN
A10 Networks
19.59
6.33
47.74%
QUBT
Quantum Computing
19.14
18.57
3257.89%

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.

The most recent analyst rating on (HLIT) stock is a Hold with a $12.50 price target. To see the full list of analyst forecasts on Harmonic stock, see the HLIT Stock Forecast page.

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: Jul 09, 2025