Harmonic (HMC) AI Stock Analysis

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Harmonic

(Frankfurt:HMC)

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Positive Factors

Market diversificationRapid Rest-of-Market growth is broadening Harmonic’s revenue base beyond its traditional customer mix and reducing reliance on a narrower business area. If this segment becomes the majority of revenue as management expects, it could support more diversified growth and strengthen long-term market positioning.

Negative Factors

Losses and cash-flow volatilityHarmonic has not yet translated improved operating performance into consistent bottom-line profitability or durable cash generation. Continued losses and volatile free cash flow could constrain internally funded investment, reduce capital allocation flexibility, and make execution more sensitive to working-capital movements.

Harmonic (HMC) vs. iShares MSCI Germany ETF (EWG)

Market Cap: EUR 1.11B
Dividend Yield: ―
Average Volume (3M): 372
Price to Earnings (P/E): -33.3
Beta (1Y): 0.78
Revenue Growth: -25.21%
EPS Growth: -164.65%
Country: Germany
Employees: 552
Sector: Technology
Sector Strength: 61
Industry: Communication Equipment

Harmonic Business Overview & Revenue Model

Company Description

Harmonic Inc., along with its affiliated entities, operates globally, delivering advanced software, hardware, system solutions, and related services for video content distribution. The company's business activities are structured into two main divisi...

Harmonic Earnings Call Summary

Earnings Call Date:Nov 02, 2026(Q3-2026)|% Change Since:-0.66%|Next Earnings Date:Feb 01, 2027

Earnings Call SentimentPositive

The call was strongly positive, driven by record Q3 revenue, substantial Rest-of-Market growth, customer additions, progress across connectivity and intelligence products, strong backlog, and a third increase to full-year guidance. The company also reported solid liquidity, debt repayment, and continued share repurchases. Offsetting issues included negative free cash flow, higher inventory and receivables, below-one overall book-to-bill, customer concentration, stranded costs, and elevated memory and component costs. Overall, the highlights significantly outweighed the lowlights.

Positive Updates

Record Q3 Revenue and Earnings

Q3 revenue increased 64% year-over-year to $148.8 million, well above the guidance range of $125 million-$135 million. Operating profit was $33 million versus guidance of $23 million-$28 million, and EPS was $0.23 versus guidance of $0.15-$0.19.

Negative Updates

Negative Free Cash Flow and Working Capital Build

Free cash flow was negative $5.1 million in Q3, due in part to a continued increase in inventory, including memory purchased to secure supply for growth, and an increase in receivables. Inventory increased $28.3 million during the quarter.

Company Guidance

For Q4 2026, Harmonic expects revenue between $141 million and $151 million, gross margins between 51% and 52%, reflecting elevated memory costs, operating profit between $28 million and $34 million, and EPS between $0.19 and $0.23, with strong year-over-year revenue growth continuing at approximately 49% at the midpoint; Q4 includes approximately $3 million in net increased memory costs and approximately $1.5 million in stranded costs. For full-year 2026, revenue is expected between $545 million and $555 million, up $35 million or 6.8% from the midpoint of the prior guidance of $505 million-$525 million, gross margins between 52.1% and 52.4%, operating profit between $118 million and $124 million, EPS between $0.80 and $0.84, up approximately $0.11 or 15.5% from the midpoint of the prior guidance, and a non-GAAP tax rate of 23%; the full-year outlook includes approximately $7.6 million in stranded costs, down from the prior estimate of $10 million, with approximately 30% or more of the original $10 million of stranded costs expected to be temporary and eliminated by the end of Q2 2027.

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

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

DE:HMC against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ERIC	73Outperform	$34.57B	18.22	18.10%	2.93%	3.88%	-16.99%
CIEN	72Outperform	$38.59B	64.08	22.82%	―	32.57%	367.53%
CSCO	69Neutral	$386.41B	29.99	27.39%	1.66%	11.77%	27.65%
CALX	68Neutral	$1.99B	45.91	6.09%	―	22.90%	―
VIAV	63Neutral	$7.63B	118.88	6.02%	―	47.44%	276.75%
Sector *	61Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

* Technology Sector Average

Performance Comparison

DE:HMC and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
DE:HMC	Harmonic	8.98	0.25	2.89%
CALX	Calix Inc	32.60	-27.70	-45.94%
CIEN	Ciena Corporation	296.04	101.83	52.43%
CSCO	Cisco	100.76	24.79	32.63%
ERIC	Telefonaktiebolaget LM Ericsson Class B	10.63	0.98	10.18%
VIAV	Viavi Solutions Inc	33.00	16.07	94.92%

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.

Harmonic AI Stock Analysis