Back to top

Image: Bigstock

ADTRAN (ADTN) Down 4% Since Earnings Report: Can It Rebound?

Read MoreHide Full Article

It has been about a month since the last earnings report for ADTRAN, Inc. (ADTN - Free Report) . Shares have lost nearly 4% in that time frame, underperforming the market.

Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Fourth Quarter Earnings

ADTRAN Inc. reported fourth-quarter 2016 results, wherein both the top line and the bottom line surpassed the Zacks Consensus Estimate. The company’s impressive performance can be attributed to robust growth in its international segment and its Services business.

Operating Results

Quarterly earnings per share of $0.16 surpassed the Zacks Consensus Estimate of $0.10. Total revenue of $162.99 million was up 17.25% year over year. The top line also beat the consensus mark of $152 million.

Quarterly gross margin came in at 43.43% compared with 44.92% in the prior-year quarter. Operating income in the reported quarter totaled $4.27 million as against $2.80 million in the last-year quarter.

At the end of 2016, ADTRAN generated $42 million of cash from operations compared with $18.54 million in the year-ago period. As of Dec 31, 2016, the company had used cash of $4.23 million compared with a cash flow of $13.74 million as of Dec 31, 2015. At the end of 2016, ADTRAN had $79.90 million of cash and cash equivalents compared with $84.55 million in 2015.

How Have Estimates Been Moving Since Then?

Following the release, investors have witnessed an upward trend in fresh estimates. There have been two revisions higher for the current quarter in the past month. The consensus estimate has shifted by 15.8% due to these changes.

ADTRAN, Inc. Price and Consensus

 

ADTRAN, Inc. Price and Consensus | ADTRAN, Inc. Quote

VGM Scores

At this time, ADTRAN's stock has a poor Growth Score of 'F', however its Momentum is doing a lot better with a 'C'. Charting a somewhat similar path, the stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregte VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate that the stock is more suitable for value investors than momentum investors.

Outlook

While estimates have been trending upward for the stock, the magnitude of these revisions looks promising. It comes with little surprise the stock has a Zacks Rank #1 (Strong Buy). We are expecting an above average return from the stock in the next few months.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


ADTRAN Holdings, Inc. (ADTN) - free report >>

Published in