Comtech Telecommunications (NASDAQ: CMTL) will report its Q4 2021 earnings on Tuesday, October 5, 2021.
What to look for
In Q3, the company saw demand slowly picking up, with Comtech experiencing higher operational and logistics costs. Supply chain issues are prevalent, with lead times for particular parts increasing significantly. In addition, the company received a statewide contract of $175 million for the design, deployment, and operation of next-generation 911 services in Pennsylvania. Although sales for the satellite ground station are challenging, things seem to be getting better, which will reflect in Q4 earnings.
Earnings: Stockearning’s Estimated EPS will be top Q3's EPS of $0.26. The company topped Q3 EPS estimates of $0.08 and posted EPS of $0.26. Over the past 12 quarters, the company has topped estimates 11 times (91%) and missed once (8%).
Revenue: In Q3, the company reported net sales of $139.4 million, with 79.8% of them being from US-based customers and 20.2% from international customers. Bookings in Q3 2021 were $115.9 million, and the company ended the quarter with a backlog of $636.5 million. The company expects a strong 2021 with consolidated net sales of between $580 and $590 million. The company expects adjusted EBITDA to be between $74 million and $76 million.
Stock movement: Since the last earnings release, the company's stock has gained 1.68% from $25.66 to the previous closing price of $26.09. Following the earnings release, the share price has been DOWN 27 times in the past 45 quarters. So, the historical price reaction suggests a 60% probability for the share price to go UP. According to Stockearning, the predicted first-day move is 8%, and the predicted move on the seventh day is 9%.
What analysts are saying
Northland analyst Michael Latimore maintained a “buy” rating on the company’s shares after the company topped its Q3 EBITDA estimates on in-line revenue and also announced the award of a satellite earth station contract that will contribute to revenue until fiscal 2023. As a result, the analyst lowered the company’s target price from $31 to 28.
Also, Citi analyst Asiya Merchant maintained a “Hold” rating in Comtech and lowered its target price from $29 to $26. The analyst told investors that the company had better than anticipated Q3 results and revised its guidance, reflecting a considerable revenue decline in Q4 because of a shortfall in the government unit. However, Asiya said that the outlook indicates that the shortfall’s impact will be a one-time thing.
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