Stock in Focus: Harmonic Inc. (HLIT)

Company Profile:

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. 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 was incorporated in 1988 and is headquartered in San Jose, California.

Recent News:

On Sept. 9, 2022, the company announced that DIRECTV GO, a Vrio company, is streaming more than 100 linear channels with Harmonic’s VOSĀ®360 cloud SaaS platform. The Harmonic SaaS platform is deployed by leading providers in the media and entertainment industry for efficiently streaming linear channels and live sports events.

On Aug. 30, 2022, the company announced that its VOSĀ®360 SaaS platform is now available on Google Cloud, bringing additional infrastructure options to media and entertainment companies. By running on Google Cloud, the VOS360 SaaS platform reinforces benefits for video service providers, including unparalleled agility, resiliency, security and scalability for a superior viewing experience.

For the second quarter of 2022, the company reported revenue of $157.4 million, up 39% year over year. Net income of GAAP net income $14.8 million and non-GAAP net income of $17.6 million, compared to GAAP net loss $2.0 million and non-GAAP net income $4.8 million in the year ago period.

 

Fundamental Analysis:

Ninestocks analyzes several different financial aspects:

Price to Book Value – P/BV, a ratio used to compare book value to its current market price, to gauge whether a stock is valued properly.

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Price to Earnings – PE, the ratio for valuing a company that measures its current share price relative to its earnings per share (EPS).

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Discounted cash flow – DCF, a valuation method used to estimate the value of an investment based on its expected future cash flows.

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Return on Assets – ROA, indicates how profitable a company is in relation to its total assets, how efficiently uses assets to generate a profit.

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Return on Equity – ROE, a measure of financial performance calculated by dividing net income by equity. a gauge of profitability and efficiency.

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Debt to Equity – evaluate financial leverage, reflects the ability of equity to cover outstanding debts in the event of a business downturn.

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Conclusion:

HLIT receives outperform rating in price to book value, price to earnings, discounted cash flow and debt to equity. Technical indicators signal the bullish signs, as there is a bullish crossover in the MACD and the stochastic oscillator and the RSI(14) stands at 66.9 with positive bias. We rate Harmonic Inc. (HLIT) a BUY.

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