# Harmonic (HLIT.US)

Canonical: https://gigainvestors.com/s/HLIT

Analysis as of: 2026-10-16T07:29:03.918Z. Financial observations: FY1996–FY2025.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: fail; earnings resilience is evidence only). Published buy qualification: no.

Share price: $10.58 per share; close as of 2026-10-15.

Estimated value: low $4.51 per share, central $4.86 per share, high $5.31 per share. Buy at or below the central value $4.86 per share. Valuation as of 2026-10-16T07:29:03.918Z; scenarios are not confidence intervals.

Expected annual return: 5.3% at the stated quote. About 5.3% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: fail

- 5 revenue declines in the last 10 years (informational)

- more than 2 net loss years

- negative average operating margin

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 5

- Years with a net loss: 6

- Operating margin variation: 10.45×

Chart: Operating margin; fiscal year observations.

- FY2016: -0.17×

- FY2017: -0.20×

- FY2018: -0.01×

- FY2019: 0.03×

- FY2020: -0.03×

- FY2021: 0.04×

- FY2022: 0.07×

- FY2023: 0.04×

- FY2024: 0.09×

- FY2025: 0.05×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- Recent gross margin fell 5.9pp below the typical margin (limit 4pp)

- ROIC, median of available years: 4.1%

- ROIC, second-lowest year: -55.6%

- Typical minus recent gross margin: 5.9 pp

- Typical gross margin (annual median): 51.3%

- Recent gross margin (lower of latest and 3-year median): 45.4%

- Years with nonpositive capital: 0

- Capital spending / revenue: 2.6%

- ROIC including acquisitions, ten-year median: -0.6%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: -55.6%

- FY2017: -90.9%

- FY2018: -7.0%

- FY2019: 9.8%

- FY2020: -9.8%

- FY2021: 16.7%

- FY2022: 18.7%

- FY2023: 5.0%

- FY2024: 9.5%

- FY2025: 3.2%

### economics: fail

- working capital as a share of revenue rose more than 10pp and ends positive

- Owner earnings / net income, 5-yr: 1.08×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $131M

- Net income, five-year total: $121M

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: 1.3 pp

- Working capital / revenue, change between three-year averages: 10.3 pp

- Working capital / revenue, final three-year average: 31.3%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.01×

- FY2022: 1.11×

- FY2023: 1.05×

- FY2024: 1.08×

- FY2025: 1.00×

### management: fail

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: -55.6% vs 5.0%

- Per-share earnings: -0.93 to 0.33 (three-year endpoint medians)

- five-year and ten-year diluted share growth both above threshold

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 2.7%

- Ordinary dilution, 5-year annual growth: 3.3%

- Market cap gain: $707M

- Cumulative retained earnings: -$100M

- Diluted shares, 10-year annual growth: 2.7%

- Diluted shares, 5-year annual growth: 3.3%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value change: $1.26

- Per-share value, starting three-year median: -$0.93

- Per-share value, ending three-year median: $0.33

- Buybacks concentrated in cheaper years (correlation): -0.01

- Average buyback yield: 1.2%

- Buyback history: 10 years

- Debt-funded buybacks: Yes

- Acquisition spending: $65M

- Cumulative net income, 10 years: -$90M

- ROIC, first three-year median: -55.6%

- ROIC, last three-year median: 5.0%

Chart: Earnings per share; fiscal year observations.

- FY2016: -$0.93

- FY2017: -$1.02

- FY2018: -$0.25

- FY2019: -$0.07

- FY2020: -$0.30

- FY2021: $0.12

- FY2022: $0.25

- FY2023: $0.72

- FY2024: $0.33

- FY2025: -$0.38

### accounting: pass

- stock compensation exceeds 15% of operating cash flow

- Sloan accruals: -21.1%

- Receivables to sales index (DSRI): 0.91×

- Restructuring years, last five: 1

- Stock compensation / operating cash flow: 29.5%

- Earnings backed by cash: Yes

- Accounting red flags: 1

- Goodwill and intangibles / equity: 0.16×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -13.1%

- FY2017: -16.9%

- FY2018: -6.5%

- FY2019: -6.3%

- FY2020: -11.6%

- FY2021: -4.0%

- FY2022: 3.2%

- FY2023: 10.0%

- FY2024: -2.8%

- FY2025: -21.1%

## Holders

- [Matthew McLennan](https://gigainvestors.com/FE): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 40% since May 2023 · sales -46.9%

Story as of 2026-10-16T09:58:53.189Z; price observation 2026-10-15.

Price needs cash profits to grow 14.9% a year for ten years

- 2026-08-12: Harmonic Posts Q2 Loss, Revenue Rises 54% As Company Raises FY26 Outlook ([nasdaq.com](https://www.nasdaq.com/articles/harmonic-posts-q2-loss-revenue-rises-54-company-raises-fy26-outlook))

### Sales · FY2024–2025

sales -46.9%; source https://www.sec.gov/Archives/edgar/data/851310/000119312526067506/hlit-20251231.htm; observed 2026-02-24.

- FY2016: $406M 

- FY2017: $358M 

- FY2018: $404M 

- FY2019: $403M 

- FY2020: $379M 

- FY2021: $507M 

- FY2022: $625M 

- FY2023: $608M 

- FY2024: $679M 

- FY2025: $361M 

### Gross margin · FY2025

gross margin 45.4%; source https://www.sec.gov/Archives/edgar/data/851310/000119312526067506/hlit-20251231.htm; observed 2026-02-24.

- FY2016: 49.5% 

- FY2017: 47.4% 

- FY2018: 51.8% 

- FY2019: 55.4% 

- FY2020: 51.5% 

- FY2021: 51.2% 

- FY2022: 50.5% 

- FY2023: 51.4% 

- FY2024: 53.9% 

- FY2025: 45.4% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in communication equipment; annual sales are USD 360.5 million.

- Source: https://www.sec.gov/Archives/edgar/data/851310/000119312526067506/hlit-20251231.htm (filed 2026-02-24); FY2025: revenue 360523000; grossProfit 163663000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-15); HLIT.US: Harmonic Inc., together with its subsidiaries, provides broadband access solutions worldwide. The company provides software-based broadband access solution, including cOS software-based broadband access solutions to broadband operators, an end-to-end solution consisting of virtualized cloud-native software; hardware products include Oyster, Ripple and SeaStar DAA nodes; Reef and Wave PHY shelf products; pebble remote PHY Devices; and fin, pearl and pier OLT modules and devices; and cOS software-based broadband access solutions to broadband operators; and cOS central cloud services, a subscription service for cOS customers. It also provides technical support and professional services, such as maintenance and support, consulting, implementation, integration services, program management, technical design and planning, building and site preparation, integration and equipment installation, end-to-end system testing, and training, as well as SaaS-related support and deployment. It sells its products through its direct sales force, as well as through independent resellers and systems integrators. It also serves cable and telco operators. The company was incorporated in 1988 and is headquartered in San Jose, California.

### Why customers stay

Margins ranged from 45.4% to 53.9% during 2023–25; it earns 4.1% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); FY2023: grossProfit / revenue = 51.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); FY2024: grossProfit / revenue = 53.9%.

- Source: https://www.sec.gov/Archives/edgar/data/851310/000119312526067506/hlit-20251231.htm (filed 2026-02-24); FY2025: grossProfit / revenue = 45.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); 10-year return on capital observations [[2016,-0.5559766096605882],[2017,-0.9087237288410666],[2018,-0.07030172260699698],[2019,0.09760390205207144],[2020,-0.09759367681498829],[2021,0.16721935260177273],[2022,0.18730675732138108],[2023,0.049504884175272115],[2024,0.09469318013007323],[2025,0.03198858087296221]]; median 0.04074673252411716. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 51% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/851310/000119312526067506/hlit-20251231.htm (filed 2026-02-24); Gross margin observations: [[2021,0.5121611203019231],[2022,0.5054491749032334],[2023,0.5141329183575777]]; range within 2 percentage points.

### Where the cash goes

Paid dividends in 4 of 10 years; bought back USD 79 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); FY2019: growth capex 0; upkeep 10328000; owner earnings 3354000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); FY2021: growth capex 0; upkeep 12975000; owner earnings 13332000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); FY2022: growth capex 0; upkeep 9250000; owner earnings 31192000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); FY2023: growth capex 0; upkeep 8475000; owner earnings 87774000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); FY2024: growth capex 0; upkeep 9186000; owner earnings 42170000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); Dividend observations: [[2016,0],[2017,0],[2018,0],[2019,1492000],[2020,1662000],[2021,2064000],[2022,0],[2023,3835000],[2024,0],[2025,0]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/851310/000119312526067506/hlit-20251231.htm (filed 2026-02-24); FY2025: cash repurchases 79027000 USD.

### Are managers owners

Insiders own 1.8% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-15); HLIT.US SharesStats.PercentInsiders = 1.8339999999999999 percentage points; cache date 2026-10-15.

### What the price says

The price assumes cash profits grow 14.9% yearly over ten years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); Ten-year compound average after fade. Initial solved rate 0.20277342860064207. Price 10.58; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share -0.1173983591196837 → FY2025 -0.3792892049534953. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $5.10 per share

- 2016-11: $4.65 per share

- 2016-12: $5.00 per share

- 2017-01: $5.30 per share

- 2017-02: $5.40 per share

- 2017-03: $5.95 per share

- 2017-04: $5.80 per share

- 2017-05: $5.05 per share

- 2017-06: $5.25 per share

- 2017-07: $4.10 per share

- 2017-08: $3.25 per share

- 2017-09: $3.05 per share

- 2017-10: $3.70 per share

- 2017-11: $4.20 per share

- 2017-12: $4.20 per share

- 2018-01: $3.65 per share

- 2018-02: $3.03 per share

- 2018-03: $3.80 per share

- 2018-04: $3.65 per share

- 2018-05: $3.85 per share

- 2018-06: $4.25 per share

- 2018-07: $4.60 per share

- 2018-08: $5.45 per share

- 2018-09: $5.50 per share

- 2018-10: $5.51 per share

- 2018-11: $5.62 per share

- 2018-12: $4.72 per share

- 2019-01: $5.29 per share

- 2019-02: $5.52 per share

- 2019-03: $5.42 per share

- 2019-04: $5.66 per share

- 2019-05: $5.22 per share

- 2019-06: $5.55 per share

- 2019-07: $7.47 per share

- 2019-08: $6.59 per share

- 2019-09: $6.58 per share

- 2019-10: $7.78 per share

- 2019-11: $8.26 per share

- 2019-12: $7.80 per share

- 2020-01: $7.04 per share

- 2020-02: $6.14 per share

- 2020-03: $5.76 per share

- 2020-04: $5.80 per share

- 2020-05: $5.39 per share

- 2020-06: $4.75 per share

- 2020-07: $5.58 per share

- 2020-08: $5.90 per share

- 2020-09: $5.58 per share

- 2020-10: $5.94 per share

- 2020-11: $6.53 per share

- 2020-12: $7.39 per share

- 2021-01: $7.76 per share

- 2021-02: $7.75 per share

- 2021-03: $7.84 per share

- 2021-04: $7.82 per share

- 2021-05: $6.97 per share

- 2021-06: $8.52 per share

- 2021-07: $8.85 per share

- 2021-08: $9.24 per share

- 2021-09: $8.75 per share

- 2021-10: $9.07 per share

- 2021-11: $10.75 per share

- 2021-12: $11.76 per share

- 2022-01: $10.76 per share

- 2022-02: $9.31 per share

- 2022-03: $9.29 per share

- 2022-04: $8.30 per share

- 2022-05: $9.63 per share

- 2022-06: $8.67 per share

- 2022-07: $10.92 per share

- 2022-08: $11.26 per share

- 2022-09: $13.07 per share

- 2022-10: $15.45 per share

- 2022-11: $15.34 per share

- 2022-12: $13.10 per share

- 2023-01: $13.17 per share

- 2023-02: $13.19 per share

- 2023-03: $14.59 per share

- 2023-04: $14.09 per share

- 2023-05: $17.61 per share

- 2023-06: $16.17 per share

- 2023-07: $14.92 per share

- 2023-08: $10.68 per share

- 2023-09: $9.63 per share

- 2023-10: $10.79 per share

- 2023-11: $11.06 per share

- 2023-12: $13.04 per share

- 2024-01: $11.70 per share

- 2024-02: $13.13 per share

- 2024-03: $13.44 per share

- 2024-04: $10.74 per share

- 2024-05: $12.23 per share

- 2024-06: $11.77 per share

- 2024-07: $14.66 per share

- 2024-08: $14.45 per share

- 2024-09: $14.57 per share

- 2024-10: $11.09 per share

- 2024-11: $12.82 per share

- 2024-12: $13.23 per share

- 2025-01: $11.28 per share

- 2025-02: $10.31 per share

- 2025-03: $9.59 per share

- 2025-04: $8.98 per share

- 2025-05: $9.02 per share

- 2025-06: $9.47 per share

- 2025-07: $8.51 per share

- 2025-08: $9.62 per share

- 2025-09: $10.18 per share

- 2025-10: $10.70 per share

- 2025-11: $9.56 per share

- 2025-12: $9.89 per share

- 2026-01: $9.72 per share

- 2026-02: $10.63 per share

- 2026-03: $8.98 per share

- 2026-04: $11.43 per share

- 2026-05: $15.11 per share

- 2026-06: $16.33 per share

- 2026-07: $11.55 per share

- 2026-08: $11.98 per share

- 2026-09: $10.56 per share

- 2026-10: $10.58 per share

## Annual estimated value (USD per share)

- FY2022: low $1.21 per share, central $1.31 per share, high $1.42 per share

- FY2023: low $2.17 per share, central $2.46 per share, high $2.76 per share

- FY2024: low $4.05 per share, central $4.70 per share, high $5.35 per share

- FY2025: low $2.75 per share, central $2.98 per share, high $3.30 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/851310/000119312526067506/hlit-20251231.htm); period 2025-12-31, filed 2026-02-24.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.