Movers and SHAKERS
Comtech Telecommunications Corporation (CMTL)
Solid End to the Year in an Uncertain Environment
Comtech Telecommunications Corp. engages in the design, development, production, and marketing of products, systems, and services for advanced communications solutions in the United States and internationally. It operates in three segments: Telecommunications Transmission, Mobile Data Communications, and RF Microwave Amplifiers. The Telecommunications Transmission segment provides satellite earth station equipment and systems, over-the-horizon microwave systems, and forward error correction technology, which are used in various commercial and government applications, including backhaul of wireless and cellular traffic, broadcasting (including HDTV), IP-based communications traffic, long distance telephony, and secure defense applications. The Mobile Data Communications segment provides mobile satellite transceivers, and computers and satellite earth station network gateways and associated installation, training, and maintenance services; supplies and operates satellite packet data networks, including arranging and providing satellite capacity; and offers microsatellites and related components. The RF Microwave Amplifiers segment designs, develops, manufactures, and markets satellite earth station traveling wave tube amplifiers (TWTA) and broadband amplifiers. Its amplifiers are used in broadcast and broadband satellite communication; defense applications, such as telecommunications systems and electronic warfare systems; and commercial applications comprising oncology treatment systems, as well as to amplify signals carrying voice, video, or data for air-to-satellite-to-ground communications. The company serves satellite systems integrators, wireless and other communication service providers, broadcasters, defense contractors, military, governments, and oil companies. Comtech markets its products through independent representatives and value-added resellers. The company was founded in 1967 and is headquartered in Melville, New York.
Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Earnings Beat. Comtech posted 4Q20 revenue of $149.7 million, adjusted EBITDA of $23.5 million, GAAP EPS of $0.04, and adjusted EPS of $0.21. We had projected revenue of $145 million, adjusted EBITDA of $14.5 million, and a GAAP loss of $0.08 per share. Consensus was $142 million and an $0.11 loss per share, respectively. The beat is due to strong expense control which more than offset higher-than-expected acquisition costs.
Acquisitions Update. The Gilat acquisition trial is scheduled to begin October 5th with the Court indicating a judgment will be rendered before October 29th, which is when the deal expires. Comtech has filed additional materials with the Russian authorities on the UHP deal and is hopeful to hear before year end. While the outcomes remain uncertain at this time, litigation and deal expenses continue ...
This research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.