- Needham repeated analyst Ryan Koontz Harmonic Inc HLIT with a buy and maintained a price target of $19.
- HLIT reported a strong 4Q22. Revenue and Non-GAAP EPS of $164.3 million and $0.17 respectively beat consensus estimates.
- Comcast Corp CMCSA led the quarter with a 48% customer concentration, which is sure to worry investors that other Tier 1 CableOS software implementations aren’t scaling as quickly.
- Book-to-bill ratio of 0.79 declined from 1.1 last quarter while total backlog and deferred revenue of $457.1 million (+4% y/y -7% q/q) normalization of customer ordering behavior after the pandemic.
- 1Q23 and F23 forecasts have been described as “conservative” and assume a small contribution from new cable wins and reflect video’s transition from royalty to subscription revenue.
- Analyst’s F23 estimates decline -2%/-$0.09 and introduced F24 earnings/EPS numbers at $873 million/$1.00.
- Despite a weaker-than-hoped outlook for C23, management offered a quietly confident tone, which analysts say indicates confidence in rising earnings from existing CableOS earnings, significant upside potential for C23 guidance, and a significant probability of success Charter Communications, Inc CHTR.
- Raymond James Analyst Simon Leopold maintained an outperformance and lowered the price target to $17 from $18.
- The analyst’s thesis regarding Harmonic’s leadership in broadband network development remains intact, but those seeking instant gratification may be disappointed.
- The primary negative element comes from the more noticeable erosion of Harmonic’s video segment, but management maintained and expressed confidence in its 2025 outlook.
- With the securing of Comcast, investors’ focus has shifted to charters.
- Charter’s plan calls for a virtual CCAP and DAA deployment in 2024, which the analyst saw as the real prize Harmonic has yet to secure. From his point of view, however, it remains the clear leader.
- Price promotion: HLIT shares traded 6.90% lower to $13.22 over the last day
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