Comtech (CMTL) – Near-Term Bumps Obscuring Long-term Potential

2 min read

Friday, March 11, 2022

Comtech (CMTL)
Near-Term Bumps Obscuring Long-term Potential

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.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

    2Q22 Results. Revenue of $120.4 million, down 25.4% y-o-y, but was up 3.1% sequentially. We had forecast $125 million, same as consensus. Adjusted EBITDA was $9.8 million, or an 8.1% margin, down from $18.1 million and 11.2% last year. GAAP loss was $23.5 million, or $0.89 per share versus net income of $4.2 million, or $0.17 per share in 2Q21. Non GAAP EPS loss was $0.03 versus Non-GAAP EPS of $0.27 last year. We had forecast a GAAP loss of $3.5 million, or $0.13 per share.

    More Bumps in the Road.  The operating environment continues to be challenging. The latest is Russia’s invasion of the Ukraine. Not only is this pushing out a major troposcatter contract with the Ukraine, but other governments around the world are moving to purchasing war making equipment rather than Comtech’s products …

This Company Sponsored 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. 


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