Q4 Earnings Preview for ADTRAN (ADTN)

in EARNINGS/INVESTING IDEAS by

ADTRAN, Inc. (NASDAQGS:ADTN) is expected to report Q4 earnings results in January 2020.

The company is expected to report earnings of -$0.12/share on revenue of $111.3 million. The consensus earnings per share (EPS) of -$0.12/share is based on a poll of 4 analysts. The company reported earnings of -$0.12/share for the same quarter last year as well.

The revenue forecast of $111.3 million based on a poll of 7 analysts implies a year-over-year (YoY) decline of -20.5%. Last year the company reported $140.1 million in revenue for the quarter.

Expected to report EPS of -$0.12/share for Q4, 2019
Metric Expected Prior Year YoY Change
Revenue $111.30 $140.09 -20.5%
EPS -$0.12 -$0.12 NM

Earnings Call Trends

Historically, management has exceeded analyst expectations 5 out of the last 8 tracked quarters, missed 2 quarters, and met expectations 1 quarter.

What are your expectations from ADTRAN for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q3, 2019 -$0.06 -$0.06 NM Meet
Q2, 2019 $0.09 $0.14 55.6% Beat
Q1, 2019 -$0.06 $0.10 NM Beat
Q4, 2018 -$0.05 -$0.12 NM Missed
Q3, 2018 $0.04 $0.21 425.0% Beat
Q2, 2018 -$0.26 -$0.10 NM Beat
Q1, 2018 -$0.14 -$0.29 NM Missed
Q4, 2017 $0 $0.05 NM Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report.

After the last earnings report for the period ending September 30, 2019, the stock price reacted by falling by -8.1%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
2019-10-30 $9.59 $8.81 -8.1% Decline
2019-07-18 $15.82 $11.53 -27.1% Decline
2019-04-17 $14.69 $16.59 12.9% Increase
2019-01-23 $11.78 $13.56 15.1% Increase

Fundamentals And Technical Analysis

ADTRAN is currently trading at $10.28/share, down -0.2% for the day. The company is trading at approximately 57.7% of its 52-week high of $17.81/share. The company’s stock price is up 16.7% since the last earnings report and up 3.4% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 72.61 suggests the company is trading in technically overbought territory. The RSI is considered overbought when above 70 and oversold when below 30.

NASDAQGS:ADTN Stock Price Chart Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of -9.9x and a forward P/E multiple of 149.3x.

ADTRAN’s current share price also implies a price-to-book (P/B) multiple of 1.2x. The following table summarizes some other key fundamental ratios:

Data as of January 21, 2020
Metric Value
Last Fiscal Period FY2019.Q3
Period End Date September 30, 2019
Stock Price (Current) $10.28
P/E Ratio -9.9x
P/E Ratio (Fwd) 149.3x
PEG Ratio -32.8
Total Debt to Capital (%) 8.3%
Levered Free Cash Flow $8.42 million
Enterprise Value / EBITDA -33.6x

Source: Finbox

Company Profile: ADTRAN, Inc.

ADTRAN, Inc. is a small-cap stock with a market capitalization of $492.6 million and a total enterprise value of $411.8 million. The company operates in the Information Technology sector and the Communications Equipment industry.

ADTRAN, Inc. provides networking and communications equipment for service providers, cable/multiple system operators, and distributed enterprises in the United States and internationally. The company operates through Network Solutions, and Services & Support segments.

It offers network management and subscriber services control and orchestration software; SDN-controlled programmable network elements; fiber to the premises and fiber to the node (FTTN) multi-service access nodes (MSAN); fiber aggregation and FTTN MSAN; fiber to the distribution point optical network units; optical line terminals; optical networking edge aggregation; IP digital subscriber line access multiplexers; cabinet and outside-plant enclosures and services; pluggable optical transceivers, cables, and other miscellaneous materials; and other products and services.

The company also provides cloud-based SaaS management platforms; SaaS platforms for subscriber and network analytics collection; SmartOS software licensing for residential and enterprise gateway, and Wi-Fi devices; broadband customer premise solutions and point-to-point Ethernet optical network terminals; radio frequency over glass micro nodes; residential gateway products and accessories; Wi-Fi access points, and associated powering and switching infrastructure; enterprise session border controller device platforms and software; carrier Ethernet services termination devices; voice over Internet protocol media gateways; business routers; technical support; and other products, software, and services.

In addition, it offers planning, engineering, program management, maintenance, installation, and commissioning services. Further, the company offers time division multiplexed and asynchronous transfer mode based aggregation systems and customer devices; and high-bit-rate digital subscriber line, asymmetric digital subscriber line, and other technologies.

ADTRAN, Inc. was founded in 1985 and is headquartered in Huntsville, Alabama.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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