Harmonic Inc

HLIT

Radio & Tv Broadcasting & Communications Equipment

Mkt Cap

$1.346B

PE

19.00

Debt

$115.1M

Cash

$84.31M

EV

$1.376B

FCF

$19.55M

Market Cap

$1.346B

P/E Ratio

19.00

Debt

$115.1M

Cash

$84.31M

EV

$1.376B

FCF

$19.55M

Charts data: {"Earnings":[{"time":"2014-12-30","value":-46248000},{"time":"2015-12-30","value":-15661000},{"time":"2016-12-30","value":-72314000},{"time":"2017-12-30","value":-82955000},{"time":"2018-12-30","value":-21035000},{"time":"2019-12-30","value":-5924000},{"time":"2020-12-30","value":-29271000},{"time":"2021-12-30","value":13254000},{"time":"2022-12-30","value":28182000},{"time":"2023-12-30","value":83994000}],"Sales":[{"time":"2014-12-30","value":433557000},{"time":"2015-12-30","value":377027000},{"time":"2016-12-30","value":405911000},{"time":"2017-12-30","value":358246000},{"time":"2018-12-30","value":403558000},{"time":"2019-12-30","value":402874000},{"time":"2020-12-30","value":378831000},{"time":"2021-12-30","value":507149000},{"time":"2022-12-30","value":624957000},{"time":"2023-12-30","value":607907000}],"Net Margins":[{"time":"2014-12-30","value":-0.10667109515011867},{"time":"2015-12-30","value":-0.04153813917836123},{"time":"2016-12-30","value":-0.17815235359475354},{"time":"2017-12-30","value":-0.23155876129810243},{"time":"2018-12-30","value":-0.05212385828059411},{"time":"2019-12-30","value":-0.014704349250634192},{"time":"2020-12-30","value":-0.077266643965251},{"time":"2021-12-30","value":0.026134331330634586},{"time":"2022-12-30","value":0.045094302488011176},{"time":"2023-12-30","value":0.13816916074333738}],"Assets":[{"time":"2014-12-30","value":480518000},{"time":"2015-12-30","value":524957000},{"time":"2016-12-30","value":554069000},{"time":"2017-12-30","value":508059000},{"time":"2018-12-30","value":510835000},{"time":"2019-12-30","value":587327000},{"time":"2020-12-30","value":591523000},{"time":"2021-12-30","value":693686000},{"time":"2022-12-30","value":710018000},{"time":"2023-12-30","value":768206000}],"Stockholders Equity":[{"time":"2014-12-30","value":371813000},{"time":"2015-12-30","value":328168000},{"time":"2016-12-30","value":270641000},{"time":"2017-12-30","value":218343000},{"time":"2018-12-30","value":228250000},{"time":"2019-12-30","value":252446000},{"time":"2020-12-30","value":258302000},{"time":"2021-12-30","value":295913000},{"time":"2022-12-30","value":324506000},{"time":"2023-12-30","value":436874000}],"ROE":[{"time":"2014-12-30","value":-0.12438510756751378},{"time":"2015-12-30","value":-0.047722507983715655},{"time":"2016-12-30","value":-0.2671952882231443},{"time":"2017-12-30","value":-0.37992974356860537},{"time":"2018-12-30","value":-0.09215772179627602},{"time":"2019-12-30","value":-0.023466404696449932},{"time":"2020-12-30","value":-0.11332084149561367},{"time":"2021-12-30","value":0.044790191711753115},{"time":"2022-12-30","value":0.0868458518486561},{"time":"2023-12-30","value":0.19226138428929165}],"ROA":[{"time":"2014-12-30","value":-0.04489113831323697},{"time":"2015-12-30","value":-0.024664877313760936},{"time":"2016-12-30","value":-0.12098854113837808},{"time":"2017-12-30","value":-0.13950545113854887},{"time":"2018-12-30","value":-0.00980942965928333},{"time":"2019-12-30","value":0.02227549559274476},{"time":"2020-12-30","value":-0.021045673625539496},{"time":"2021-12-30","value":0.027114573452541927},{"time":"2022-12-30","value":0.06410964229075883},{"time":"2023-12-30","value":0.028862050023040695}]}

Harmonic Inc., together with its subsidiaries, provide video delivery software, products, system solutions, and services worldwide. The company operates in two segments, Video and Broadband. The Video segment sells video processing, production, and playout solutions and services to broadband 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 Broadband segment offers CableOS software-based broadband access solutions; and CableOS central cloud services primarily to broadband 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, as well as SaaS-related support and deployment. It sells its products through its direct sales force, as well as through independent resellers and systems integrators. Harmonic Inc. was incorporated in 1988 and is headquartered in San Jose, California.

Sector

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9/29/23
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10-Q
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10-Q
6/29/18
10-Q
3/30/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Harmonic Inc

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$19.55M	$19.33M	$19.1M	$18.88M	$18.66M	$18.45M	$18.23M	$18.02M	$17.81M	$17.61M	$17.4M	$174M
DCF		$16.81M	$14.45M	$12.42M	$10.67M	$9.172M	$7.883M	$6.775M	$5.823M	$5.005M	$4.302M	$43.02M
Value	$136.3M

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 71%

Earnings Stability -64%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is high enough to offer a good protection on the profits in case of higher costs or higher interests. Furthermore higher margins reduce earnings’ volatility.

Over time the ROA has been increasing indicating a higher marginal ROA with respect to the calculated one, giving a good sign for continued growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	-4.2%	-18%	-23%	-5.2%	-1.5%	-7.7%	2.6%	4.5%	14%	12%
ROA	-2.5%	-12%	-14%	-0.98%	2.2%	-2.1%	2.7%	6.4%	2.9%	0.2%
ROE	-4.8%	-27%	-38%	-9.2%	-2.3%	-11%	4.5%	8.7%	19%	17%

What is the average Net Margin?

The average Net Margin over the past 5 years is +1.09%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +3.53%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +1.86%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +1.05%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +1.58%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is +5.46%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

The company has high debt with respect to the cashflow it generates.

The Graham’s stability indicate reliability of earnings, and consideration about the future are more dependable.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	-12.28	-7.54	-13.96	23.28	6.30	18.61	4.84	-34.42	-92.01	5.89
Debt Equity	0.30	0.41	0.53	0.53	0.52	0.50	0.46	0.40	0.30	0.28
MIN
Graham Stability	-	-	-	-	-	-	-	-	100%	100%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 5.89.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -20.35.

What is the Graham’s Stability?

Graham’s Stability measure stands at 1.00.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has been increasing in past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	5.9%	8.5%	17%	-2.7%	2.7%
Net Income	-	-	-	200%	85%
Stockholders Equity	7.1%	14%	19%	35%	5.5%
FCF	-	-	-	-	1.4%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +8.54%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +2.68%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is -.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is +85.41%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +13.86%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +5.54%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is -.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is +1.44%.