Aviat Networks misses EPS consensus as bookings rise 75%

By Sophie Lindqvist

Aviat Networks reported $0.12 in quarterly earnings per share (EPS) on Tuesday, missing the $0.30 analyst consensus by $0.18, according to FiscalAI. FiscalAI reported revenue of $101.97 million against a $103.55 million consensus. The company recorded a 0.58% net margin, or profit as a share of revenue, and a 5.85% return on equity (ROE).

What does the order book show?

• First-quarter bookings exceeded $150 million, up 75% year over year.
• The book-to-bill ratio, comparing order value with revenue, exceeded 1.5.
• Backlog, or unfilled orders, rose $70 million, or 19%, sequentially.
• Aprisa bookings increased 61% year over year.

Management said demand for its major multiple-dwelling unit (MDU) program "exceeds what it can currently serve" because of component constraints. Aviat also launched low-Earth-orbit (LEO) satellite integration and a quad all-outdoor radio.

How much did supply constrain revenue?

Revenue fell to $102.0 million from $107.3 million a year earlier. Non-GAAP gross margin, which adjusts generally accepted accounting principles, declined to 29.6% from 33.8%. Management estimated that component shortages and a Thailand flood reduced revenue by about $10 million.

Competition for components is likely to persist near term, so demand does not yet equal deliveries. The order book offers little comfort to a supply chain already holding revenue back.

What does fiscal 2027 guidance require?

Aviat set fiscal 2027 revenue guidance of $450 million to $475 million and maintained adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) guidance of $50 million to $55 million. The company plans to exit $25 million to $30 million of low-margin Asia-Pacific (APAC) revenue. Management expects no profitability impact from the exit and may improve gross margin by 1% to 2%.

The forecast pairs stronger demand with a deliberate withdrawal of low-margin revenue. Both figures belong in the same assessment. Guidance usually comes with one asterisk. This one has two.

When does BEAD contribute?

Aviat received its first BEAD-related order, though management expects the program to contribute mainly in calendar 2027 and beyond. The order extends product momentum; its financial contribution remains distant.

What did the market price on Tuesday?

AVNW fell 9.3%, or $1.78, to $17.35. Volume reached 96,839 shares against an average of 158,915. The market capitalization was $223.12 million, the price-to-earnings (P/E) ratio 92.71 and the beta, a measure of market sensitivity, 0.77.

The 50-day simple moving average, a rolling mean of share prices, stood at $19.83; the 200-day average was $21.07. The one-year low was $13.92 and the high $27.02. Debt-to-equity, dividing debt by equity, stood at 0.33. The current ratio, comparing current assets with current liabilities, was 1.97; the quick ratio, which excludes inventory, was 1.66.

How divided were analyst ratings?

• On August 28, Roth Capital reaffirmed a "buy" and raised its target to $38.00 from $34.00.
• B. Riley Financial also reaffirmed a "buy" on August 28, setting a $33.00 target, up from $28.00.
• On October 3, Wall Street Zen upgraded the stock from "hold" to "buy."
• On October 30, Weiss Ratings downgraded it from "hold (c-)" to "sell (d+)."
• On November 5, Zacks Research upgraded it from "strong sell" to "hold."

MarketBeat.com data showed eight analysts rating the shares buy, one hold and one sell. Its consensus rating was "Moderate Buy," with a $32.71 price target. The spread suggests no shortage of opinions. Agreement was another matter.

What did insiders sell?

Vice President Erin Boase sold 1,347 shares on Monday, August 31, at an average $19.69, worth $26,522.43. Her remaining direct holding was 28,275 shares, valued at $556,734.75, representing a 4.55% reduction. CEO Pete A. Smith sold 14,264 shares on the same date at $19.69, worth $280,858.16. He retained 367,840 direct shares valued at $7,242,769.60, a 3.73% decrease.

Over the last 90 days, insiders sold 16,240 shares valued at $319,766; insiders own 5.70% of the stock. Both executive sales appear in filings with the US Securities and Exchange Commission.

What does Aviat sell?

Aviat provides wireless networking solutions for communications service providers, government agencies and enterprises. Its portfolio includes microwave and millimeter-wave wireless transmission systems, routers, access and aggregation equipment, network management software and related cybersecurity solutions. Its mission-critical connectivity targets telecommunications, public safety, utilities, transportation and defense.

With bookings above $150 million and a $10 million supply-related revenue drag, delivery capacity, not demand, is the near-term variable. The order book can grow faster than deliveries. At present, that is the more inconvenient forecast.