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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Harmonic Inc. (XNAS:HLIT) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
HLIT
Name:
HARMONIC INC. (XNAS:HLIT)
Sector:
- 29920.00K
Industry:
Communication Equipment
CEO:
Dr. Patrick Harshman
Total Employees:
935
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 125.75% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF HARMONIC INC.(HLIT) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND COMMUNICATION EQUIPMENT INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
11
One Month Price Target:
$11.06
Six Month Price Target :
$11.37
Likely Price in One Year's Time:
Ticker:
$11.74
Likely Trading Range Today Under (Normal Volatility)
$10.95
Price Upper limit ($) :
$11.07
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$10.29
This week:
$9.41
This month :
$7.81
Other Primary facts
Market Cap:
1.14B
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
105.06M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
24.91%
-14.31%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$14.31
$12.78
$7.69
$9.22
Medium risk (<10%) entry points
Buy Call
Sell Call
$12.28
Buy Put:
Sell Put:
$11.96
$9.71
$10.04
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
HLIT
Sharpe Ratio:
2.66%
Comparison:
HLIT, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 105.08% higher than the industry
& ratio is 16.64% higher than the market/S&P 500 average
Average Returns/Yield of
HLIT
Daily returns:
0.09%
Weekly returns:
0.47%
Monthly returns:
1.88%
Yearly returns:
12.89%
Comparison of returns:
Average annual returns/yield (last 3 years) is 75.10% above industry average
Classification:
HLIT, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.93
Statistical test of Returns:
HLIT has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.20%
Weekly Volatility:
7.16%
Monthly Volatility:
14.32%
Yearly Volatility:
49.62%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.75%
Volatility in last five trading days has been -14.12% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.48%
Weekly VaR:
-14.50%
Monthly VaR:
-29.00%
How Much Can the price of
HLIT
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-25%
Worst case (decline):
>85%
This translates to price declining to:
$8.30
This translates to price declining to:
$1.65
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
HLIT is a 104.67% riskier investment compared to the market/S&P 500 & is 75.34% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 1.09% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
HLIT
Beta in relation to market/S&P 500--1.00
Expected beta in 1 year's time:
0.774
Expected beta in 3 year's time:
1.095
Unlevered (debt free) Beta:
0.637
Beta in relation to Nasdaq (XNAS):
0.531
Beta in relation to all global stocks::
0.647
Beta Comparison & Analysis
Beta of competitors/peers::
1.062
Beta is -5.75% lower than peers
Average Industry Beta:
1.197
Beta is -16.38% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
4.82%
Sustainable growth rate is -89.44% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.126
Alpha is 718.19% above industry average alpha yield
Alpha is 799% higher than market/& is unsustainably high
Analysis of Cost of Capital of
HLIT
Equity cost of capital:
0.100
Equity cost of capital is -11.83% below industry mean WACC
Unlevered (without debt) cost of capital:
6.37%
Before-tax cost of debt:
5.09%
After-tax cost of debt:
4.02%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
4.02%
WACC is -0.92% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$5.17
Revenue growth rate per share of (3Y):
4.06
Annual revenue growth rate is -61.86% below industry average
EPS:
$0.14
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$0.00
-
-
Debt per share
$1.34
EBITDA per share
$0.36
Valuation Analysis Today of
HLIT
P/E Ratio:
36.76
P/E Ratio of Competitors/Peers:
103.54
P/E ratio is -64.50% lower than main peers & is -0.99% lower than the industry
Stock price/value with industry average P/E ratio: $5.20
HLIT is 111.65% overvalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
2.13
Price to sales ratio is -7.06% below the industry mean
P/B (Price to book value ratio):
4.06
Price to free cash flow: 12599.11
Price to free cash flow ratio is -8.91% lower than the industry
Net income growth rate (3Y):
-152.84%
Net income growth rate is -133.52% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
49.54%
Net debt to equity ratio:
29.92%
Debt to assets ratio:
20.13%
Net debt to assets ratio:
12.16%
Debt-to-asset ratio is -63.62% below industry average
Ability to repay debt:
Interest coverage ratio:
3.97
Interest coverage ratio is -89.12% less than industry average
Looking forward:
Debt growth rate:
19.84%
Annual debt growth is -296% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.07%
Analysis of Key Statistics
Correlation of price movement with the market:
0.33
Statistical significance of correlation:
HLIT has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.552
Stock price is -40.25% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.552
Correlation of price movement with Nasdaq (^IXIC):
0.018
Covariance of price movement with the market:
0.034
Kurtosis
10.887
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
1.105
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
HLIT
Gross Profit Margin Ratio:
203%
Operating Profit Margin Ratio:
4.64%
Operating profit margin is -27.85% lower than the industry
Net Profit Margin Ratio:
203%
Effective Tax Rate:
-15.42%
Effective tax rate is -155.28% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
6.27%
Return on equity (ROE) is -81.95% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
2.55%
Return on assets (ROA) is -41.65% lower than the industry
Financial Leverage:
1.3x
Current Ratio:
1.41
Current ratio is -36.65% below industry average
Cash Conversion Cycle (days):
-5.4
Cash conversion cycle is -108.69% below industry average
The remaining useful life of property plant & equipment is: 4.7 years
Stock based compensation to net income ratio:
42.50%
In-depth Efficiency Analysis
Revenue generated per employee:
580.8K
Each employee generates 5% more revenue than industry average revenue per employee
EBITDA generated per employee:
40.1K
Each employee generates -47% less EBITDA than industry average revenue per employee
Profit generated per employee:
19.1K
Each employee generates -23% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 32.0K
Each employee generates 1929% more free cash flow than industry average revenue per employee
Assets/Capital per employee
401.1K
Each employee generates 1929% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 23.93%
Growth rate in R&D investment/expenditure is -1133.99% lower than the industry
Competitors/Peer firms of
HLIT
KAROOOOO LTD. (XNAS:KARO)
FARO TECHNOLOGIES, INC. (XNAS:FARO)
CONSENSUS CLOUD SOLUTIONS, INC. (XNAS:CCSI)
AVEPOINT, INC. (XNAS:AVPT)
EVO PAYMENTS, INC. (XNAS:EVOP)
GREENSKY, INC. (XNAS:GSKY)
BTRS HOLDINGS INC. (XNAS:BTRS)
PC CONNECTION, INC. (XNAS:CNXN)
AUDIOCODES LTD (XNAS:AUDC)
Current Analyst Ratings
Strong buy�8%
Buy�4%
Hold�8%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
4/1/22
Revenue:
543.01M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
269.23M
273.78M
107.54M
-
139.82M
-
1.17M
248.52M
-
9.46M
12.60M
37.52M
25.19M
17.85M
15.46M
- 2385.00K
17.85M
Statement of Cash Flow
Date:
Period:
3.11M
Differed Income Tax :
627.00K
Stock Based Compensation :
7.59M
Change in Working Capital :
- 37277.00K
Accounts Receivables:
- 28479.00K
Other Working Capital:
-
Other Non-Cash Items:
-
Net Cash Provided by Operating Activities:
- 27482.00K
Investments in PP&E:
- 2438.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
4/1/22
2022
Q1
100.74M
-
100.74M
115.59M
81.82M
27.25M
325.40M
72.13M
239.63M
-
-
-
63.28M
375.05M
-
700.45M
52.52M
44.88M
-
75.47M
57.98M
230.86M
141.01M
43.92M
184.94M
-
415.79M
105.00K
- 2073288.00K
- 5037.0K
2.36B
April 1, 2022 at 6:00:00 AM
517.76M
284.65M
700.45M
-
185.89M
85.2M
-
-
- 2438.00K
- 99.00K
2.97M
- 2141.00K
-
- 2693.00K
- 1967.00K
- 805.00K
100.61M
100.74M
133.43K
- 27482.00K
- 2438.00K
- 29920.00K
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
HLIT
2023
2024
2025
2026
2027
$12.25
$13.07
$13.95
$14.89
$15.89