ADTN Stock Forecast & Price Target

Adtran Holdings Inc. has demonstrated robust growth in its Optical Networking segment, with sales increasing by 4% year-over-year to $78.2 million, reflecting strengthened demand from both government and internet content provider customers. Furthermore, the Subscriber Solutions segment recorded a notable year-over-year sales increase of 15%, bolstered by an anticipated rise in European subscriber additions, which management believes will fuel further growth. Additionally, the Access/Aggregation segment showcased strong performance with a 10% year-over-year growth and a remarkable 23% sequential increase, driven by stocking orders from Tier 1 European service providers.

Adtran Holdings's financial outlook appears negative due to a modest decrease in estimated earnings per share (EPS) for fiscal years 2025 and 2026, signaling potential challenges in maintaining profitability. Additionally, the valuation metrics have been adjusted downward, with a new price target of $12 which reflects an EV/EBITDA multiple of 8.9x and an ex-cash P/E of 20.3x for fiscal year 2026 estimates, indicating reduced investor confidence. The steady Days Sales Outstanding (DSO) at 60 days, although improved from the previous quarter, suggests ongoing concerns regarding cash flow management and collection efficiency that could impact overall financial stability.