Friday, March 12, 2021
Comtech (CMTL)
2Q21 Results Ahead of Plan, but Full Year 2021 Expectations Unchanged
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.
2Q21 Results. Comtech reported revenue of $161.3 million, flat with the $161.7 million reported last year. Adjusted EBITDA came in at $18.1 million compared to $21.2 million last year. EPS was $0.17 and adjusted EPS was $0.27 compared to $0.14 and $0.32, respectively, last year. Management had guided 2Q21 to $135-$140 million of revenue and adjusted EBITDA of $12.5-$14 million. We had forecast revenue of $138 million, adjusted EBITDA of $12.7 million, and adjusted EPS of $0.08.
UHP Acquisition. Last week, Comtech finally completed the acquisition of UHP Networks, which was first announced in November 2019. Unfortunately, the Russian operations were not included. UHP provides Comtech with a broader product offering especially in the VSAT market. UHP’s addressable market is multiple times larger than Comtech’s existing satellite ground station solutions …
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.
