Clearfield, Inc. (NASDAQ: CLFD)

Sector: Technology Industry: Communication Equipment CIK: 0000796505
Market Cap 404.58 Mn
P/B 1.58
P/E -50.26
P/S 2.69
ROIC (Qtr) 0.85
Div Yield % 0.00
Rev 1y % (Qtr) 212.10
Total Debt (Qtr) 8.76 Mn
Debt/Equity (Qtr) 0.03

About

Clearfield, Inc. (CLFD) operates in the rapidly growing fiber optic industry, primarily across North America. The company specializes in designing, manufacturing, and distributing fiber protection, fiber management, and fiber delivery solutions for the broadband service provider space. With a focus on simplifying the process of building and deploying fiber-optic networks, Clearfield provides high-quality, cost-effective products that meet the specific needs of broadband service providers. Clearfield's main business activities involve designing,...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 29.45M provides robust 3.36x coverage of total debt 8.76M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 21.49M provide 7.61x coverage of short-term debt 2.82M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 292.11M provides 33.36x coverage of total debt 8.76M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 25.61M exceeds capital expenditure of 3.84M by 6.67x, indicating strong organic growth funding capability.
  • Long-term investments of 59.82M provide solid 10.08x coverage of long-term debt 5.93M, indicating strategic financial planning.

Bear case

  • Operating cash flow of 29.45M barely covers its investment activities of (8.84M), with a coverage ratio of -3.33, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Short-term investments of 84.48M significantly exceed cash reserves of 21.49M, which is 3.93x, indicating potentially excessive yield-seeking behavior at the expense of liquidity.
  • Operating earnings of (5.69M) show weak coverage of depreciation charges of 6.12M, with a -0.93 ratio indicating high capital intensity and potential reinvestment needs.
  • Long-term investments of 59.82M represent a high 3.30x of fixed assets 18.10M, indicating potential overexposure to financial assets versus operational capabilities.
  • Operating cash flow of 29.45M is outpaced by equity issuance of (16.55M) (-1.78 ratio), indicating concerning reliance on equity markets for funding operations.

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 1.30 2.22
EV to Cash from Ops. EV/CFO 13.56 10.78
EV to Debt EV to Debt 45.60 25.00
EV to EBIT EV/EBIT -70.14 32.18
EV to EBITDA EV/EBITDA 48.47 10.60
EV to Free Cash Flow [EV/FCF] EV/FCF 15.59 -3.32
EV to Market Cap EV to Market Cap 0.99 1.17
EV to Revenue EV/Rev 2.66 27.87
Price to Book Value [P/B] P/B 1.58 5.35
Price to Earnings [P/E] P/E -50.26 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) 0.00 -12.93
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 51.64 -73.93
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 51.92 463.06
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.39
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 35.36 204.95
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 161.90 -1.04
EBIT Growth (1y) % EBIT 1y % (Qtr) 63.74 238.24
EBT Growth (1y) % EBT 1y % (Qtr) 63.74 173.82
EPS Growth (1y) % EPS 1y % (Qtr) 31.76 8.68
FCF Growth (1y) % FCF 1y % (Qtr) 79.30 20.80
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 95.52 41.66
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.49 0.76
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.03
Cash Ratio Cash Ratio (Qtr) 0.59 1.20
Current Ratio Curr Ratio (Qtr) 5.42 2.69
Debt to Equity Ratio Debt/Equity (Qtr) 0.03 0.43
Interest Cover Ratio Int Coverage (Qtr) 0.00 -12.93
Times Interest Earned Times Interest Earned (Qtr) 0.00 -12.93
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 0.30 -40.66
EBIT Margin % EBIT Margin % (Qtr) -3.79 -52.32
EBT Margin % EBT Margin % (Qtr) -3.79 -59.46
Gross Margin % Gross Margin % (Qtr) 33.70 39.35
Net Profit Margin % Net Margin % (Qtr) -5.40 -60.72