Harmonic Inc. (HLIT)
NASDAQ:HLIT
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Harmonic
(NASDAQ:HLIT)
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Rating:62Neutral
Price Target:
$10.00
▲(5.15% Upside)
Action:DowngradedDate: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 and manageable leverage
Robust TTM operating and free cash flow with modest leverage provides durable liquidity and strategic optionality. This funding capacity supports R&D, DOCSIS/fiber deployments, buybacks or acquisitions, and helps absorb cyclical revenue swings while management executes the broadband-focused strategy.
Negative Factors
Sharp revenue decline and earnings setback
A 43% TTM revenue drop and a swing to negative net margin represent a meaningful deterioration in earnings quality. Persistent weakness could erode equity returns, constrain reinvestment and R&D, and force structural cost cuts or strategic changes if backlog conversion and new wins don't restore profitable scale.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation and manageable leverage
Robust TTM operating and free cash flow with modest leverage provides durable liquidity and strategic optionality. This funding capacity supports R&D, DOCSIS/fiber deployments, buybacks or acquisitions, and helps absorb cyclical revenue swings while management executes the broadband-focused strategy.
Read all positive factors
Harmonic (HLIT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.05B
Dividend YieldN/A
Average Volume (3M)1.22M
Price to Earnings (P/E)―
Beta (1Y)1.34
Revenue Growth1.93%
EPS Growth-43.22%
CountryUS
Employees901
SectorTechnology
Sector Strength88
IndustryCommunication Equipment
Share Statistics
EPS (TTM)0.14
Shares Outstanding110,242,355
10 Day Avg. Volume1,096,519
30 Day Avg. Volume1,215,921
Financial Highlights & Ratios
PEG Ratio0.12
Price to Book (P/B)2.93
Price to Sales (P/S)3.12
P/FCF Ratio11.60
Enterprise Value/Market Cap1.04
Enterprise Value/Revenue2.13
Enterprise Value/Gross Profit3.96
Enterprise Value/Ebitda28.46
Forecast
1Y Price Target
$13.00Price Target Upside36.70% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
EPS Forecast (FY)0.72
Revenue Forecast (FY)$668.57M
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,...
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/encodin...
Harmonic Earnings Call Summary
Earnings Call Date:Feb 19, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 04, 2026
Earnings Call Sentiment Positive
The call conveyed a broadly positive outlook driven by record bookings, substantial backlog expansion (up 73% YoY), stronger Rest-of-World diversification (33% YoY growth, 41% of broadband revenue), accelerating DOCSIS 4.0 and fiber traction, solid free cash flow ($97M) and a strengthened balance sheet anticipated from the Video sale. Notable near-term headwinds include memory cost pressure (~$6M net built into guidance), stranded costs (~$10M in 2026), tariff impacts, elevated DSO, and a high single-customer concentration in the quarter (one customer = 53% of Q4 revenue). Management provided constructive 2026 guidance (revenue $440M–$480M, implying 22%–33% growth in continuing ops) while taking prudent assumptions on memory and supply timing. Overall, the positive operational momentum and financial visibility from bookings/backlog outweigh the near-term cost and execution risks.Positive Updates
Strong Q4 Broadband Revenue and Sequential Growth
Broadband revenue of $98.2M in Q4 (continuing operations), up 9% sequentially and above the high end of guidance.
Negative Updates
High Customer Concentration in Quarter
One customer accounted for >10% of revenue and represented 53% of total revenue for Q4 continuing operations, indicating material customer concentration risk despite rest-of-world diversification progress.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Q4 Broadband Revenue and Sequential Growth
Broadband revenue of $98.2M in Q4 (continuing operations), up 9% sequentially and above the high end of guidance.
Read all positive updates
Company Guidance
Harmonic provided Q1 2026 continuing‑operations (Broadband) guidance of $100–105M revenue, 54–55% gross margin, $18–20M operating profit and $0.11–0.12 EPS (including ~ $2M stranded costs and < $1M tariff impact), and full‑year 2026 guidance of $440–480M revenue, 51–53% gross margin, $74–99M operating profit and $0.46–0.63 EPS (including ~ $10M stranded costs and ~ $4M tariff impact) with a non‑GAAP tax rate of 24.5%; management expects 2026 revenue growth of ~22–33% YoY and has baked in a ~$6M net memory‑cost headwind. The guidance is supported by record Q4 bookings of $346.9M (3.5x book‑to‑bill), backlog/deferred revenue of $573.8M (+73% YoY) with $307M (53.5%) expected to convert in 12 months (+110% YoY), year‑end cash of $124.1M plus an $82M undrawn facility and expected net proceeds from the ~$145M Video sale, FY free cash flow of $97M (Q4 FCF $9.6M), DSO ~79, days inventory ~83, and an expanded $200M share‑repurchase program with $101M repurchased to date.Harmonic Financial Statement Overview
Summary
Income Statement
39
Negative
Balance Sheet
63
Positive
Cash Flow
67
Positive
| 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
Neutral
9.51
Price Trends
9.99
Negative
9.97
Negative
9.77
Negative
Market Momentum
-0.24
Positive
46.19
Neutral
60.35
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HLIT, the sentiment is Neutral. The current price of 9.51 is below the 20-day moving average (MA) of 9.68, below the 50-day MA of 9.99, and below the 200-day MA of 9.77, indicating a bearish trend. The MACD of -0.24 indicates Positive momentum. The RSI at 46.19 is Neutral, neither overbought nor oversold. The STOCH value of 60.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HLIT.
Harmonic Risk Analysis
Harmonic disclosed 37 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $1.04B | 14.75 | 28.06% | 4.38% | 5.20% | 9.14% | |
76 Outperform | $1.91B | 34.52 | 6.76% | ― | 1.46% | 78.77% | |
64 Neutral | $399.20M | ― | -2.61% | ― | -9.94% | 30.96% | |
62 Neutral | $1.05B | -25.95 | -10.08% | ― | 1.93% | -43.22% | |
62 Neutral | $1.02B | -15.18 | -30.65% | ― | 14.33% | 83.32% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
HLIT
Harmonic
9.51
-0.43
-4.33%
ADTN
Adtran
12.64
3.40
36.80%
CLFD
Clearfield
29.56
-1.71
-5.47%
DGII
Digi International
50.66
21.11
71.44%
ITRN
Ituran Location And Control
52.19
16.79
47.43%
Harmonic Corporate Events
Business Operations and StrategyM&A Transactions
Harmonic Signs Agreement to Sell Video Business Unit
Neutral
Mar 23, 2026
Harmonic Inc. has moved ahead with the sale of its Video Business to Leone Media Inc., doing business as MediaKind, for $145 million in cash, subject to customary working capital and debt adjustments. After completing the required French employee ...
Business Operations and StrategyFinancial DisclosuresM&A Transactions
Harmonic Advances Broadband Focus After Video Business Divestiture
Neutral
Mar 12, 2026
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 wo...
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.