Infinera (INFN) AI Stock Analysis

• Market Cap: $1.57B
• Dividend Yield: N/A
• Average Volume (3M): 1.11M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.58
• Revenue Growth: -12.12%
• EPS Growth: -469.62%
• Country: US
• Employees: 3,389
• Sector: Technology
• Sector Strength: 82
• Industry: Hardware & Equipment
• EPS (TTM): -0.64
• Shares Outstanding: 236,802,000
• 10 Day Avg. Volume: 1,693,198
• 30 Day Avg. Volume: 1,112,137
• PEG Ratio: 0.30
• Price to Book (P/B): 13.50
• Price to Sales (P/S): 1.08
• P/FCF Ratio: 277.46
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $6.65
• Price Target Upside: 0.15% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

Infinera's overall stock score reflects significant financial challenges, including declining revenue and liquidity issues. Technical indicators suggest moderate momentum without clear direction. Valuation concerns arise due to negative earnings and lack of dividends. These factors collectively result in a low stock score, indicating potential risks without current catalysts for improvement.

Positive Factors

Design Win Momentum

The company continues to have strong design win momentum across various verticals, including Internet Content Providers.

Gross Margin

Gross Margin increased slightly and is expected to sustain at 40% or higher going forward.

Negative Factors

Revenue Decline

Infinera's 3Q revenue declined 9.7% year over year and fell below consensus expectations.

Infinera Business Overview & Revenue Model

Company Description

Infinera Corporation is a global supplier of telecommunications equipment and services, primarily focusing on the design, development, and delivery of digital optical networking systems. Operating within the telecommunications and networking sector, Infinera provides advanced optical transport networking solutions that enable network operators to scale bandwidth, accelerate service innovation, and automate network operations. The company's product portfolio includes optical transport platforms, converged packet-optical solutions, and software for network management and control, serving a broad range of customers including telecommunications service providers, internet content providers, cable operators, and government entities.

How the Company Makes Money

Infinera generates revenue by selling its optical networking equipment and solutions to a diverse array of customers worldwide. The company's revenue streams are primarily comprised of the sale of networking hardware, which includes optical transport platforms and converged packet-optical solutions, as well as associated software and services for network management and optimization. Infinera also offers maintenance, support, and professional services that provide additional revenue. Moreover, the company engages in strategic partnerships and collaborations with other technology firms and network operators to enhance its product offerings and expand its market reach. Key factors contributing to Infinera's earnings include ongoing demand for high-capacity, scalable network solutions driven by the exponential growth of data traffic and the increasing adoption of cloud-based services.

Infinera Financial Statement Overview

Summary

Infinera's financial performance is challenged by declining revenue and ongoing losses. The income statement reveals a negative net profit margin, and the balance sheet shows a significantly negative return on equity. Cash flow issues are evident with zero free cash flow, indicating liquidity constraints. These financial difficulties suggest a need for strategic improvements.

Income Statement

Infinera's income statement reveals challenges with profitability. The gross profit margin for 2024 is 38.4%, indicating decent efficiency in production. However, the net profit margin is negative at -10.6%, reflecting ongoing losses. Revenue has declined by 12.1% from 2023 to 2024, marking a concerning trend. The EBIT margin is -5.9%, and the EBITDA margin is also negative at -5.9%, highlighting operational inefficiencies.

Balance Sheet

The balance sheet shows a debt-to-equity ratio of 0.36 for 2024, indicating moderate leverage, but the company's stockholders' equity has declined significantly. The return on equity is negative at -129.1%, suggesting poor returns for shareholders. The equity ratio is 7.6%, reflecting a low proportion of assets financed by equity, which could pose a risk to financial stability.

Cash Flow

Infinera's cash flow statement indicates significant issues with liquidity. The free cash flow in 2024 is zero, marking a substantial deterioration. The operating cash flow to net income ratio is not calculable due to zero operating cash flow, pointing to potential liquidity constraints. The trend in cash flow generation is concerning, given the absence of free cash flow growth.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.42B	1.61B	1.57B	1.43B	1.36B
	Gross Profit
544.56M	622.91M	535.78M	497.97M	408.79M
	EBIT
-83.65M	4.09M	-34.90M	-73.62M	-117.27M
	EBITDA
-38.39M	91.98M	63.76M	-11.12M	-35.26M
	Net Income Common Stockholders
-150.34M	-25.21M	-76.04M	-170.78M	-206.72M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
145.81M	172.50M	178.66M	190.61M	298.01M
	Total Assets
1.53B	1.68B	1.67B	1.59B	1.73B
	Total Debt
42.08M	744.64M	714.09M	531.65M	625.49M
	Net Debt
-103.72M	572.13M	535.43M	341.04M	327.47M
	Total Liabilities
1.42B	1.46B	1.49B	1.26B	1.31B
	Stockholders Equity
116.52M	216.59M	179.65M	323.77M	426.28M
Cash Flow		Free Cash Flow
5.67M	-12.80M	-83.61M	-13.25M	-151.31M
	Operating Cash Flow
80.68M	49.51M	-37.56M	28.13M	-112.30M
	Investing Cash Flow
-75.01M	-62.31M	-46.05M	-41.38M	-39.01M
	Financing Cash Flow
-32.22M	13.71M	82.35M	-101.54M	334.16M

Infinera Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6.64
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For INFN, the sentiment is Positive. The current price of 6.64 is below the 20-day moving average (MA) of 6.64, above the 50-day MA of 6.62, and above the 200-day MA of 6.30, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 51.44 is Neutral, neither overbought nor oversold. The STOCH value of >-0.01 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for INFN.

Infinera Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FN	80 Outperform	$8.11B	24.92	18.30%	―	17.14%	18.90%
CIEN	68 Neutral	$11.30B	147.83	2.76%	―	-7.29%	-64.31%
Sector *	60 Neutral	$11.64B	10.63	-6.94%	2.93%	7.63%	-11.15%
LITE	58 Neutral	$5.43B	―	-42.79%	―	3.58%	-22.74%
ADTN	49 Neutral	$651.69M	―	-66.50%	―	-10.18%	75.45%
INFN	45 Neutral	$1.57B	―	-90.26%	―	-12.12%	-469.62%

Infinera Corporate Events

Infinera Completes Merger, Alters Convertible Notes Structure

Infinera has completed a merger that affects its Convertible Senior Notes due 2027 and 2028, changing their conversion rights from company stock to a mix of cash and Nokia ADSs. Additionally, Infinera terminated a $200 million revolving credit facility and initiated a Change of Control Offer to purchase outstanding Convertible Notes, marking a significant shift in its financial structure and stakeholder rights.