One-glance verdict
Undervalued
$12.71 our estimate vs market $1.49
Wall Street consensus: $4.25 (-66.6% lower than our fair-value estimate)
88% below our estimate, below the bear case
Fundamentals snapshot
Comtech Telecommunications Corp.
CMTL · NMS · Technology · Communication Equipment
Current price
$1.49
52-week range
$1.42 - $6.21
Market cap
$44.64M
Balance sheet
Distressed
-1.20x Concerning
Net debt $222.98M. Interest coverage shows how many times profit covers the interest bill.
What stands out
1 Reward
2 Risks
1 rewards · 2 risks
- Reward Free cash flow was positive in 5/10 years.
- Risk Net debt grew 30.5% over 3 years.
- Risk Return on equity was -9.1% last year — the company lost money on shareholders' equity.
What this company does
Comtech Telecommunications Corp.
Comtech Telecommunications sells critical communication technology, primarily to governments, defense contractors, and telecommunications companies. They make money in two main ways: by providing ground equipment that helps satellites communicate with Earth and by building 911 systems that route emergency calls. This matters because their products are essential for national defense and public safety, which can create a stable demand for their services.
How the company got here
Comtech started in 1967 as a small company focused on satellite communication technology. [1, 4] For decades, it built specialized equipment for transmitting voice, video, and data. A major turning point was its 2015 acquisition of a company called TeleCommunication Systems, which added emergency 911 services to its business. [7] This purchase expanded Comtech from a satellite-focused hardware company into a broader communications technology provider with two distinct business lines. The company has since grown by providing critical communication systems to governments, defense contractors, and telecommunications companies around the world.
What it actually does
Comtech provides technology and services that make critical communications possible, especially in situations where normal networks might fail. Think of them as a specialist in connecting people and systems when it matters most. Their products are not sold in retail stores but are essential infrastructure for things like emergency 911 calls, military operations, and satellite internet. For example, they build the equipment that sends signals to and from satellites and also create the systems that route your 911 call to the right emergency response center.
Satellite and Space Communications
This is Comtech's largest business, making up more than half of its sales. [3] It provides the ground equipment that communicates with satellites, enabling services like satellite internet, in-flight Wi-Fi, and secure military communications. The customers for this segment are typically government agencies, defense contractors, and satellite operators. They pay Comtech for hardware like power amplifiers (devices that boost the signal being sent to a satellite) and modems (devices that translate data for satellite transmission), as well as for integrated systems and services. [1, 9]
Allerium
This part of the company focuses on emergency services communication, representing a smaller but significant portion of the business. [3] Its main product is the technology behind the 911 system, ensuring that when someone calls for help, the call is routed to the correct local emergency call center. This segment's customers are mainly state and local governments and major telecom carriers like AT&T and Verizon. [3] They pay Comtech to build, maintain, and upgrade these highly reliable networks that can pinpoint a caller's location and handle emergency texts and data.
What management is betting on now
The company's leadership is currently executing a major strategic shift to focus exclusively on its satellite and space business. [6, 8] They are exploring the sale of the Allerium (911 services) segment to become what's known as a 'pure-play' company (a company focused on just one type of business). [3, 6] The goal is to use the proceeds from a potential sale to strengthen its balance sheet (a snapshot of the company's financial health). Management believes this will allow them to better capture growth opportunities in the expanding space and satellite communications market, particularly with government and military customers. [6, 8]
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 Q4
$-57.42M
FY2025 Q1
$-24.22M
FY2025 Q2
$-1.89M
FY2025 Q3
$-160.00K
FY2025 Q4
$9.41M
FY2026 Q1
$4.82M
FY2026 Q2
$442.00K
FY2026 Q3
$673.00K
Revenue
$106.00M
Net income
$-3.45M
Diluted EPS
-0.47
Operating cash flow
$6.11M
Free cash flow
$673.00K
Fetching…
Sources
Revenue
$106.76M
Net income
$-13.63M
Diluted EPS
-0.68
Operating cash flow
$4.87M
Free cash flow
$442.00K
Fetching…
Sources
Revenue
$111.03M
Net income
$-15.88M
Diluted EPS
-0.67
Operating cash flow
$8.08M
Free cash flow
$4.82M
Fetching…
Sources
Revenue
$130.37M
Net income
$7.91M
Diluted EPS
-0.41
Operating cash flow
$11.45M
Free cash flow
$9.41M
Fetching…
Sources
Revenue
$126.79M
Net income
$33.93M
Diluted EPS
-0.49
Operating cash flow
$2.30M
Free cash flow
$-160.00K
Fetching…
Sources
Revenue
$126.57M
Net income
$-48.74M
Diluted EPS
-0.76
Operating cash flow
$-234.00K
Free cash flow
$-1.89M
Fetching…
Sources
Revenue
$115.80M
Net income
$-148.41M
Diluted EPS
-5.29
Operating cash flow
$-21.81M
Free cash flow
$-24.22M
Fetching…
Sources
Revenue
$126.19M
Net income
$-90.78M
Diluted EPS
-3.48
Operating cash flow
$-54.49M
Free cash flow
$-57.42M
Fetching…
Sources
Is it cheap or expensive?
Fair value $12.71 vs current price $1.49
Wall Street consensus is the average analyst price target: $4.25 (-66.6% lower than our fair-value estimate).
Our most-likely fair value is $12.71 a share — about 752.9% above today's price of $1.49, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Distressed
Net debt $223.0M. Interest coverage -1.2x.
Net debt
$222.98M
Interest coverage
-1.20x
Comtech Telecommunications Corp.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Distressed
Worse cushion
Baseline
Better cushion
CMTL
BASELINE
Comtech Telecommunications Corp.
Total debt $251.48M Interest coverage -1.20x This is the baseline the peer rows are being compared against.
Total debt $9.62M Interest coverage 2.89x This peer still has a real interest-payment cushion, while CMTL does not.
Total debt $1.30M Interest coverage 60.10x This peer still has a real interest-payment cushion, while CMTL does not.
Total debt $21.69M Interest coverage -10.67x Neither company has much profit cushion over interest right now.
What you should know
The case for and against CMTL
1 Reward
2 Risks
Rewards
-
Free cash flow was positive in 5/10 years.
Risks
-
Net debt grew 30.5% over 3 years.
-
Return on equity was -9.1% 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
-2.01x
P/B
0.85x
P/S
0.10x
EV/EBITDA
12.89x
PEG ratio
1.79x
Profitability
How much profit each dollar creates
Gross margin
33.0%
Operating margin
-0.6%
Net margin
-5.5%
ROE
-9.1%
ROA
0.4%
Health
Liquidity and balance-sheet strength
Debt / equity
0.96x
Current ratio
1.61x
Quick ratio
1.06x
Total debt
$251.48M
Total cash
$28.50M
Growth
How the business has been compounding
Revenue TTM
$454.16M
Revenue 5Y CAGR
-3.7%
EPS TTM
-2.21
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$30.50M
Free CF TTM
$-16.86M
FCF margin
-3.7%
Dividend
Shareholder payout
Yield
—
Payout ratio
—
Last ex-div date
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