Harmonic (HLIT) AI Stock Analysis

• Market Cap: $1.14B
• Dividend Yield: N/A
• Average Volume (3M): 943.69K
• Price to Earnings (P/E): 17.2
• Beta (1Y): 1.25
• Revenue Growth: 24.14%
• EPS Growth: 16.17%
• Country: US
• Employees: 901
• Sector: Technology
• Sector Strength: 88
• Industry: Communication Equipment
• EPS (TTM): 0.09
• Shares Outstanding: 113,759,520
• 10 Day Avg. Volume: 741,400
• 30 Day Avg. Volume: 943,689
• PEG Ratio: -0.71
• Price to Book (P/B): 3.27
• Price to Sales (P/S): 2.24
• P/FCF Ratio: 28.88
• Enterprise Value/Market Cap: 0.96
• Enterprise Value/Revenue: 1.60
• Enterprise Value/Gross Profit: 2.89
• Enterprise Value/Ebitda: 9.77
• 1Y Price Target: $10.75
• Price Target Upside: 6.86% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 73 Outperform
• Price Target: $11.00 ▲(9.34% Upside)

Harmonic's overall stock score reflects its strong financial performance and positive earnings call highlights, which are the most significant factors. The technical analysis suggests short-term bullish momentum, although long-term trends warrant caution. The valuation is reasonable, but the lack of a dividend yield may deter some investors. Despite challenges like slower broadband upgrades and negative free cash flow, the company's strategic advancements and growth prospects provide a solid foundation for future performance.

Positive Factors

Revenue Growth

Harmonic's strong revenue growth, particularly in fiber and video segments, indicates robust demand for its solutions, supporting long-term expansion.

Cash Flow Generation

Strong cash flow growth enhances Harmonic's ability to invest in new opportunities and sustain operations, underpinning future growth.

Product Innovation

Innovative advancements in broadband technology position Harmonic as a leader in the industry, driving competitive advantage and market share.

Negative Factors

Slower Broadband Upgrades

Slower broadband upgrade activity may limit near-term revenue growth, potentially affecting Harmonic's ability to capitalize on market opportunities.

Free Cash Flow Challenges

Negative free cash flow can constrain Harmonic's financial flexibility, impacting its ability to fund operations and strategic initiatives.

Global Trade Uncertainty

Uncertainty in global trade and tariffs could pose risks to Harmonic's cost structure and profitability, affecting long-term financial performance.

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, 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 Money

Harmonic 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 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 careful monitoring to maintain balance.

Income Statement

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

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

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	689.08M	678.72M	607.91M	624.96M	507.15M	378.83M
Gross Profit	381.75M	365.92M	312.55M	315.88M	259.74M	195.00M
EBITDA	112.94M	77.40M	34.09M	61.65M	32.54M	999.00K
Net Income	68.65M	39.22M	83.99M	28.18M	13.25M	-29.27M
Balance Sheet
Total Assets	783.35M	796.51M	768.21M	710.02M	693.69M	591.52M
Cash, Cash Equivalents and Short-Term Investments	123.92M	101.46M	84.27M	89.59M	133.43M	98.64M
Total Debt	133.25M	148.31M	156.05M	160.78M	190.21M	184.79M
Total Liabilities	336.94M	331.25M	331.33M	385.51M	396.89M	333.22M
Stockholders Equity	446.40M	465.26M	436.87M	324.51M	296.80M	258.30M
Cash Flow
Free Cash Flow	118.16M	52.73M	-1.42M	-3.77M	28.04M	6.96M
Operating Cash Flow	129.16M	61.92M	7.06M	5.48M	41.02M	39.16M
Investing Cash Flow	-11.00M	-9.19M	-8.47M	-1.29M	-12.97M	-32.20M
Financing Cash Flow	-47.23M	-33.27M	-4.99M	-43.13M	7.94M	-2.11M

Harmonic Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 10.06
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 10.06 is above the 20-day moving average (MA) of 9.98, above the 50-day MA of 9.39, and below the 200-day MA of 10.11, indicating a neutral trend. The MACD of 0.19 indicates Positive momentum. The RSI at 56.07 is Neutral, neither overbought nor oversold. The STOCH value of 26.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HLIT.

Harmonic Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DGII	78 Outperform	$1.38B	32.61	6.87%	―	-2.37%	147.46%
HLIT	73 Outperform	$1.14B	17.21	16.36%	―	24.14%	16.17%
ITRN	70 Outperform	$697.87M	12.57	26.95%	5.39%	3.30%	9.66%
COMM	58 Neutral	$3.41B	-23.42	-69.12%	―	-11.03%	91.98%
ADTN	55 Neutral	$742.88M	-7.02	-64.24%	―	3.52%	81.33%
CLFD	52 Neutral	$465.54M	1,873.33	-4.52%	―	5.72%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Harmonic Corporate Events

Harmonic Approves Key Proposals at Annual Meeting

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.