ADTRAN, Inc. (ADTN) Buy or Sell Stock Guide

Last updated: Jun 12, '19

Are you looking for the analysis of ADTRAN, Inc. (ADTN) stock? Are you wondering what the bulls and the bears say about it?

If so, you came to the right place. In this stock guide, we will share with you 5 reasons to buy and 7 reasons to sell ADTN stock. You’ll get a perspective on what the bulls and the bears say about it.

The analysis below may be also helpful to you if you have any of the following questions about ADTN stock:

  • Is ADTN a buy or a sell?
  • Should I sell or hold ADTN stock today?
  • Is ADTN a good buy / investment?
  • What are ADTN analyst opinions, recommendations and ratings?

Let’s start with the bull case. Here are the reasons to buy ADTN stock:

1. A revenue renaissance is expected due to the third wave on DSL installations, especially in Europe.

2. Adtran has been successful in building its relationships with Tier 2 carriers. This improvement will manifest itself in better top-line numbers due to Connected America Fund subsidies from the federal government.

3. The Internetworking Business share of revenue has been slowing climbing. We are particularly pleased with WLAN subsector market share gains.

4. ADTN quarterly revenue growth was 19.00%, higher than the industry and sector average revenue growth (3.73% and 5.21%, respectively). See ADTN revenue growth chart.

5. ADTN forward dividend yield is 2.10%, higher than the industry (0.28%) and sector (0.23%) forward dividend yields. See ADTN forward dividend chart.

Now that you understand the bull case, let’s look at the reasons to sell ADTN stock (i.e., the bear case):

1. The overall industry's long-term trend toward the original design manufactured products and unbranded solutions will increase margin pressure.

2. About 30% of revenue is concentrated with big telecom providers. The recent loss of a $200 million AT&T equipment deal highlights the fragility of the revenue stream.

3. A limited R&D budget handicaps an opportunity to deliver innovations and offer differentiated products and solutions.

4. ADTN profitability is declining. The YoY profit margin change was -7.23percentage points. See ADTN profitability chart.

5. ADTN forward P/E ratio is 30.75, and it’s high compared to its industry peers’ P/E ratios. See ADTN forward P/E ratio chart.

6. ADTN PEG ratio (P/E adjusted for growth) is 18.30, and it’s high compared to its industry peers’ PEG ratios. See ADTN PEG chart.

7. ADTN short share of float is 4.34%. The stock is much more frequently shorted than the average industry, sector or S&P 500 stock. See ADTN short share of float chart.

Now let's look at the key statistics for ADTN:

Metrics ADTN
Price $12.13
Average Price Target / Upside $16.90 / 39.32%
Average Analyst Rating Hold
Industry Communication Equipment
Sector Technology
Number of Employees 1,900
Market Cap $752.99M
Forward P/E Ratio 92.5926
Price/Book Ratio 1.3628
PEG 1.9499
Revenue (TTM) $552.26M
YoY Quarterly Revenue Growth 15.97222222222222%
Profit Margin -1.4051352623764168%

What are your thoughts on ADTN?

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