One-glance verdict
Undervalued
$18.32 our estimate vs market $4.14
Wall Street consensus: $12.38 (-32.4% lower than our fair-value estimate)
77% below our estimate, below the bear case
Fundamentals snapshot
ADTRAN Holdings, Inc.
ADTN · NMS · Technology · Communication Equipment
Current price
$4.14
52-week range
$4.03 - $19.98
Market cap
$337.33M
Balance sheet
Distressed
-0.81x Concerning
Net debt $236.07M. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
3 Risks
2 rewards · 3 risks
- Reward Revenue grew 5.0% last year.
- Reward Free cash flow was positive in 4/10 years.
- Risk Net debt grew 232.3% over 3 years.
- Risk Insider ownership is only 2.3% (peer median: 6.8%).
What this company does
ADTRAN Holdings, Inc.
ADTRAN Holdings, Inc. helps internet providers build and manage their networks, selling them things like routers and other equipment for faster internet. Their money mainly comes from selling these network products and the services that support them to big and small internet companies. This matters because as more people need better internet, ADTRAN’s products are essential for internet companies to deliver it.
How the company got here
ADTRAN Holdings, Inc. was founded in 1985 in Huntsville, Alabama, with a vision to digitalize telecommunications infrastructure. Initially, it supplied digital equipment to major U.S. telecom companies after the breakup of AT&T, building a strong foundation in carrier engineering. Over the years, the company evolved with market shifts, moving from traditional telecom access technologies to focus on broadband, fiber optics, and subscriber connectivity. A significant turning point was the 2022 business combination with ADVA Optical Networking SE, which expanded ADTRAN's capabilities into optical transport and increased its international presence, particularly in Europe. This merger transformed ADTRAN from a primarily U.S.-focused access networking vendor into a broader, global network infrastructure provider.
What it actually does
ADTRAN Holdings, Inc. provides the essential hardware, software, and services that enable telecommunications companies and other organizations to move data. Think of it as the company that builds the digital highways and the on-ramps for internet traffic. Their solutions help connect everything from large data centers and cloud services to homes and businesses, ensuring that voice, data, video, and internet communications flow smoothly across various network infrastructures.
Optical Networking Solutions
This segment is like the superhighway of data transmission, focusing on the technology that moves vast amounts of information over long distances and at very high speeds. It includes products like open line systems and optical transport solutions that are crucial for backbone networks. This part of the business is significant, making up about 39% of ADTRAN's revenue, and it's vital for enabling the high-capacity data flow needed by service providers and large enterprises.
Access & Aggregation Solutions
This business line is responsible for the 'on-ramps' and 'off-ramps' of the digital highway, connecting the main network to individual users or smaller networks. It involves equipment like optical line terminals and aggregation switches that manage and direct traffic efficiently. This segment contributes about 31% of the company's revenue and is key to delivering broadband services to homes and businesses.
Subscriber Solutions
This segment focuses on the equipment and software that customers use directly in their homes or businesses to access the internet and other services. This includes devices like residential gateways (which are like your home's internet router) and Wi-Fi systems that ensure a good connection. This part of the business accounts for roughly 30% of ADTRAN's revenue and is essential for the end-user experience.
Services & Support
Beyond just selling equipment, ADTRAN offers a range of services to help its customers set up, manage, and maintain their networks. This includes network design, implementation, ongoing support, and cloud-hosted software applications. These services are crucial for ensuring that the complex networking solutions function optimally and help ADTRAN build long-term relationships with its clients.
What management is betting on now
ADTRAN's management is focused on leveraging its expanded portfolio, particularly in fiber broadband and optical networking, to drive growth. They are emphasizing open, software-driven solutions that help customers increase their network capacity and operate more efficiently. Key priorities include integrating the ADVA acquisition, managing inventory levels, and continuing to invest in innovation for fiber, optics, and software. Management sees significant opportunities in both U.S. and European markets, especially with cloud providers and enterprises upgrading their networks.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$23.22M
FY2024 Q4
$-11.19M
FY2025 Q1
$35.78M
FY2025 Q2
$27.48M
FY2025 Q3
$4.21M
FY2025 Q4
$30.57M
FY2026 Q1
$5.17M
FY2026 Q2
$16.98M
Revenue
$281.15M
Net income
$-10.90M
Diluted EPS
-0.13
Operating cash flow
$25.91M
Free cash flow
$16.98M
Fetching…
Sources
Revenue
$286.09M
Net income
$-1.32M
Diluted EPS
-0.01
Operating cash flow
$12.67M
Free cash flow
$5.17M
Fetching…
Sources
Revenue
$291.56M
Net income
$-3.60M
Diluted EPS
-0.02
Operating cash flow
$42.24M
Free cash flow
$30.57M
Fetching…
Sources
Revenue
$279.44M
Net income
$-10.26M
Diluted EPS
-0.12
Operating cash flow
$12.19M
Free cash flow
$4.21M
Fetching…
Sources
Revenue
$265.07M
Net income
$-20.53M
Diluted EPS
-0.24
Operating cash flow
$32.16M
Free cash flow
$27.48M
Fetching…
Sources
Revenue
$247.74M
Net income
$-11.27M
Diluted EPS
-0.14
Operating cash flow
$43.18M
Free cash flow
$35.78M
Fetching…
Sources
Revenue
$242.85M
Net income
$-46.11M
Diluted EPS
-0.58
Operating cash flow
$4.54M
Free cash flow
$-11.19M
Fetching…
Sources
Revenue
$227.70M
Net income
$-31.24M
Diluted EPS
-0.36
Operating cash flow
$42.03M
Free cash flow
$23.22M
Fetching…
Sources
Is it cheap or expensive?
Fair value $18.32 vs current price $4.14
Wall Street consensus is the average analyst price target: $12.38 (-32.4% lower than our fair-value estimate).
Our most-likely fair value is $18.32 a share — about 342.4% above today's price of $4.14, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Distressed
Net debt $236.1M. Interest coverage -0.8x.
Net debt
$236.07M
Interest coverage
-0.81x
ADTRAN Holdings, Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here.
Distressed
Worse cushion
Baseline
Better cushion
ADTN
BASELINE
ADTRAN Holdings, Inc.
Total debt $300.70M Interest coverage -0.81x This is the baseline the peer rows are being compared against.
Total debt $17.58M Interest coverage 52.21x This peer still has a real interest-payment cushion, while ADTN does not.
Total debt $54.12M Interest coverage 4.48x This peer still has a real interest-payment cushion, while ADTN does not.
Total debt $9.62M Interest coverage 2.89x This peer still has a real interest-payment cushion, while ADTN does not.
What you should know
The case for and against ADTN
2 Rewards
3 Risks
Rewards
-
Revenue grew 5.0% last year.
-
Free cash flow was positive in 4/10 years.
Risks
-
Net debt grew 232.3% over 3 years.
-
Insider ownership is only 2.3% (peer median: 6.8%).
-
Return on equity was -3.2% last year — the company lost money on shareholders' equity.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
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Forward P/E
7.61x
P/B
2.81x
P/S
0.30x
EV/EBITDA
9.54x
PEG ratio
1.86x
Profitability
How much profit each dollar creates
Gross margin
38.5%
Operating margin
0.6%
Net margin
-2.2%
ROE
-3.2%
ROA
-0.0%
Health
Liquidity and balance-sheet strength
Debt / equity
0.65x
Current ratio
1.89x
Quick ratio
0.90x
Total debt
$300.70M
Total cash
$64.63M
Growth
How the business has been compounding
Revenue TTM
$1.14B
Revenue 5Y CAGR
17.8%
EPS TTM
-0.26
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$93.01M
Free CF TTM
$98.03M
FCF margin
8.6%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
900.0%
Last ex-div date
2023-08-18