Aviat Networks, Inc. (NASDAQ: AVNW)

Sector: Technology Industry: Communication Equipment CIK: 0001377789
Market Cap 272.48 Mn
P/B 1.03
P/E 20.36
P/S 0.60
ROIC (Qtr) 0.56
Div Yield % 0.00
Rev 1y % (Qtr) 21.36
Total Debt (Qtr) 109.41 Mn
Debt/Equity (Qtr) 0.41

About

Aviat Networks, Inc., a reputable global supplier of microwave networking and wireless access networking solutions, has been operational since 2

Price action

Investment thesis

Bull case

  • Healthy cash reserves of 64.83M provide 11.92x coverage of short-term debt 5.44M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 598M provides 5.47x coverage of total debt 109.41M, indicating robust asset backing and low credit risk.
  • Tangible assets of 598M provide exceptional 7.27x coverage of deferred revenue 82.23M, showing strong service capability backing.
  • Cash reserves of 64.83M provide ample 25.04x coverage of acquisition spending 2.59M, enabling strategic growth opportunities.
  • Tangible assets of 598M provide robust 5.42x coverage of other current liabilities 110.34M, indicating strong asset backing.

Bear case

  • Operating cash flow of 21.14M barely covers its investment activities of (9.08M), with a coverage ratio of -2.33, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (9.08M) provide weak support for R&D spending of 32.46M, which is -0.28x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 21.14M provides insufficient coverage of deferred revenue obligations of 82.23M, which is 0.26x, raising concerns about future service delivery capabilities.
  • High receivables of 291.15M relative to inventory of 84.01M (3.47 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • The company's operating cash flow of 21.14M shows concerning coverage of stock compensation expenses of 6.96M, with a 3.04 ratio indicating potential earnings quality issues.

Peer comparison

Companies in the Communication Equipment
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 CSCO Cisco Systems, Inc. 306.02 Bn 29.63 5.30 28.09 Bn
2 MSI Motorola Solutions, Inc. 63.92 Bn 30.21 5.65 9.81 Bn
3 HPE Hewlett Packard Enterprise Co 35.43 Bn -600.50 1.03 22.37 Bn
4 UI Ubiquiti Inc. 33.47 Bn 42.27 12.14 0.17 Bn
5 CIEN Ciena Corp 33.16 Bn 268.82 6.95 1.58 Bn
6 LITE Lumentum Holdings Inc. 25.28 Bn 224.75 13.73 3.28 Bn
7 ASTS AST SpaceMobile, Inc. 19.88 Bn -65.43 1,072.82 0.72 Bn
8 ZBRA Zebra Technologies Corp 12.46 Bn 24.33 2.37 2.32 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.47 2.22
EV to Cash from Ops. EV/CFO 14.36 10.78
EV to Debt EV to Debt 2.78 25.00
EV to EBIT EV/EBIT 10.08 32.18
EV to EBITDA EV/EBITDA 7.54 10.60
EV to Free Cash Flow [EV/FCF] EV/FCF 25.59 -3.32
EV to Market Cap EV to Market Cap 1.11 1.17
EV to Revenue EV/Rev 0.67 27.87
Price to Book Value [P/B] P/B 1.03 5.35
Price to Earnings [P/E] P/E 20.36 2.67
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.91
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -25.01
Dividend per Basic Share Div per Share (Qtr) 0.00 0.22
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 4.46
Interest Coverage Int. cover (Qtr) 4.53 -12.93
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -25.71 -73.93
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 27.03 463.06
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.39
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 1,564.06 204.95
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 630.34 -1.04
EBIT Growth (1y) % EBIT 1y % (Qtr) 2,782.81 238.24
EBT Growth (1y) % EBT 1y % (Qtr) 624.42 173.82
EPS Growth (1y) % EPS 1y % (Qtr) 391.67 8.68
FCF Growth (1y) % FCF 1y % (Qtr) 165.99 20.80
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 16.49 41.66
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.70 0.76
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.03
Cash Ratio Cash Ratio (Qtr) 0.25 1.20
Current Ratio Curr Ratio (Qtr) 1.84 2.69
Debt to Equity Ratio Debt/Equity (Qtr) 0.41 0.43
Interest Cover Ratio Int Coverage (Qtr) 4.53 -12.93
Times Interest Earned Times Interest Earned (Qtr) 4.53 -12.93
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 8.60 -40.66
EBIT Margin % EBIT Margin % (Qtr) 6.64 -52.32
EBT Margin % EBT Margin % (Qtr) 5.18 -59.46
Gross Margin % Gross Margin % (Qtr) 34.20 39.35
Net Profit Margin % Net Margin % (Qtr) 3.00 -60.72