ADTN Stock Forecast & Price Target

Adtran Holdings Inc. has shown robust performance in its Optical Networking segment, with sales increasing by 4% year-over-year to $78.2 million, driven by rising demand from government and internet content provider customers. The Subscriber Solutions segment also reported a positive year-over-year growth of 15%, indicating strong market momentum bolstered by anticipated improvements in European subscriber additions. Furthermore, Access/Aggregation sales rose by 10% year-over-year and an impressive 23% quarter-over-quarter, fueled by significant stocking orders from Tier 1 European service providers, highlighting strong market demand.

Adtran Holdings Inc. is experiencing a decline in its financial outlook, as reflected in the modest downward revisions of its EPS estimates for F25 and F26. Despite a decrease in Days Sales Outstanding (DSO) to 60 days, indicating improved cash collection, the overall financial metrics, including a lowered price target to $12 from $14, suggest challenges in profitability and valuation. The current EV/EBITDA multiple of 8.9x and an ex-cash P/E of 20.3x for F26 indicate that the stock may be overvalued relative to its earnings potential, contributing to a negative outlook.