- Needham Analyst Ryan Koontz reiterated a buy ADTRAN Holdings, Inc ADTN with a Price target $28.
- ADTRAN pre-announced positive third quarter ’22 results with revenue of $340.7 million, ahead of consensus by 3% and non-GAAP operating income of $20.9 million, ahead of consensus of $16.9 million.
- Additionally, non-GAAP gross margin of 38.1% was at the high end of the company’s guidance for the third quarter, while non-GAAP operating expenses of $109 million were just above the high end of guidance.
- also read: ADTRAN publishes optimistic preliminary Q3 figures
- He surmised that ADTN benefited from solid demand in key US and European broadband segments, while the European metro fiber company acquired by Adva performed reasonably well despite a challenging macro.
- He expected strong tailwinds for ADTN’s US fiber access business and minimal setbacks for its European fiber access programs. In contrast, its more corporate-focused subway optics business could face a slight headwind from a challenging European macro 23.
- In his view, the supply chain pressure is easing, so an upward movement in gross margin in FY23 seems likely.
- ADTN didn’t provide guidance for Q4’22 in its announcement, but it did suspect that an in-line guideline at its Nov. 8 earnings call could offer more upside given the stock’s valuation.
- Price promotion: ADTN shares were trading up 12.19% to $21.67 on the latest check Tuesday.
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