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1. Company Snapshot

1.a. Company Description

Comtech Telecommunications Corp., together with its subsidiaries, designs, develops, produces, and markets products, systems, and services for communications solutions in the United States and internationally.It operates in two segments, Commercial Solutions and Government Solutions.The Commercial Solutions segment offers satellite ground station technologies, including single channel per carrier and time division multiple access modems, amplifiers, frequency converters, and network software to modulate, demodulate, and amplify signals, as well as to carry voice, video, and/or data over networks; and public safety and location technologies, such as 911 call handling and mapping solutions that allow cellular carriers and voice over the Internet carriers to deliver emergency calls to public safety emergency call centers.


The Government Solutions segment provides tactical satellite-based networks, such as satellite modems, ruggedized routers, and solid-state drives; sustainment services for the secret Internet Protocol router and non-classified Internet Protocol router access point; and small aperture terminals.This segment also offers high-performance transmission technologies that are used in communication systems comprising electronic warfare, radar, and identification friend or foe (IFF); troposcatter technologies for satellite communication; and high-power radio frequency microwave amplifiers and related switching control technologies that are used in electronic warfare, communications, radar, IFF, and medical applications.The company serves satellite systems integrators, wireless and other communication service providers, satellite broadcasters, prime contractors and system suppliers, medical equipment companies, aviation industry system integrators, oil companies, and domestic and international defense and government customers, as well as end-customers.


Comtech Telecommunications Corp.was founded in 1967 and is headquartered in Melville, New York.

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1.b. Last Insights on CMTL

Here is a 90-word analysis of the negative drivers behind Comtech Telecommunications Corp.'s recent stock performance: Comtech's Q1 loss of $1.27 per share, missing revenue estimates, and failure to file its Quarterly Report on Form 10-Q in a timely manner, led to a Nasdaq non-compliance notice. The company's former CEO, Ken Peterman, was also charged with insider trading, adding to the negative sentiment. Despite introducing a new Multipath Radio system and appointing a new independent director, David B. Kagan, to its Board, these positive developments were overshadowed by the company's poor earnings and regulatory issues.

1.c. Company Highlights

2. Comtech Telecommunications Corp. Posts Significant Improvements in Financial Health and Operational Performance

Comtech Telecommunications Corp. reported a quarterly revenue of $130.4 million for the fourth quarter of fiscal 2025, with a gross profit of $40.7 million, up 50.2% from the prior year. The company's earnings per share (EPS) came out at $0.2687, beating estimates of -$0.44. Gross margins improved significantly throughout the year, from 12.5% in Q1 to 31.2% in Q4. The company's adjusted EBITDA loss narrowed to $2 million in fiscal 2025, compared to $45.7 million in fiscal 2024.

Publication Date: Nov -24

📋 Highlights
  • Operating Cash Flow Surge:: Q4 operating cash flow rose to $11.4M, up from $2.3M in Q3, marking the first sequential improvements since fiscal 2023.
  • Liquidity Growth:: Liquidity reached $47M as of March 2025, a record high and 74% increase from $27M in March 2025, driven by debt reduction.
  • EBITDA Turnaround:: Adjusted EBITDA turned positive in Q4 at $13.3M, reversing from a $30.8M loss in Q1 and a $45.7M loss in fiscal 2024.
  • Satellite Segment Recovery:: Satellite & Space generated $20M operating cash flow in Q4, reversing from -$1M in Q1 and -$23M in fiscal 2024.

Operational Highlights

The company's Satellite and Space business, led by Daniel Gizinski, executed a successful turnaround, generating over $20 million of operating cash flow in Q4. Allerium, led by Jeff Robertson, delivered a strong Q4 with adjusted EBITDA growing 37% to $13.7 million. The segment was awarded multiple orders, aggregating about $50 million, and secured a multiyear contract extension from its largest customer, valued at over $130 million.

Financial Flexibility and Liquidity

Comtech's liquidity totaled $47 million, with total outstanding borrowings under its credit facility of $133.9 million. Operating cash flow was $11.4 million in Q4, following $2.3 million in Q3, the first positive quarters since fiscal 2023. The company's credit facility terms were also improved, providing enhanced financial flexibility. As Mike Bondi noted, the EDIM program is nearing the end of its nonrecurring engineering phase and is expected to begin the certification process prior to calendar year-end.

Valuation Metrics

With a P/S Ratio of 0.17 and EV/EBITDA of -0.78, the market appears to be pricing in a significant improvement in the company's financial performance. The current valuation multiples suggest that the market is cautiously optimistic about Comtech's prospects, given its recent operational turnaround and improving financial health. Analysts estimate next year's revenue growth at -5.2%, indicating a challenging near-term outlook.

Outlook and Guidance

Comtech provided preliminary first-quarter fiscal 2026 guidance, estimating net sales of $107-$113 million and cash flow provided by operating activities of $6-$7 million. The company is executing a transformation plan, driving improved operating and financial performance, and strengthening relationships with employees, customers, vendors, and creditors. The recent multiyear contract extension with a major customer in the Allerium business is expected to drive long-term revenue opportunities.

3. NewsRoom

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Comtech Is Changing But Remains Risky And Very Unprofitable

Nov -29

Source: seekingalpha.com

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Comtech Telecommunications Corp. (CMTL) Q4 2025 Earnings Call Transcript

Nov -10

Source: seekingalpha.com

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Comtech Announces Financial Results for Fourth Quarter and Fiscal Year 2025

Nov -10

Source: businesswire.com

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Allerium Secures Long-Term Agreement With Leading U.S. Wireless Service Provider

Nov -10

Source: businesswire.com

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Comtech To Host Fourth Quarter and Fiscal Year 2025 Earnings Conference Call

Nov -05

Source: businesswire.com

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Comtech's SLM-5650B Becomes First Sovereign-certified Modem to Operate on SES's O3b mPOWER MEO Satellite Constellation

Sep -10

Source: businesswire.com

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Comtech Appoints Lloyd A. Sprung to its Board of Directors

Aug -18

Source: businesswire.com

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Comtech Announces Amendment to Senior Secured Credit Agreement Which Improves Terms and Increases Financial Flexibility

Jul -21

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.62%)

6. Segments

Satellite and Space Communications

Expected Growth: 4.5%

Comtech Telecommunications Corp.'s Satellite and Space Communications segment growth is driven by increasing demand for secure and reliable satellite-based communication solutions, government investments in space-based technologies, and expansion into new markets such as satellite-enabled 5G networks and IoT applications.

Terrestrial and Wireless Networks

Expected Growth: 4.8%

Comtech Telecommunications Corp.'s Terrestrial and Wireless Networks segment growth of 4.8% is driven by increasing demand for satellite-based communication solutions, expansion in government and defense contracts, and growing adoption of 5G and IoT technologies. Additionally, strategic acquisitions and investments in network infrastructure have enhanced the company's capabilities, contributing to its growth momentum.

7. Detailed Products

Satellite Modems

Comtech's satellite modems provide high-speed data transmission and are designed for use in a variety of applications, including government, defense, and commercial satellite networks.

Radar and Troposcatter Systems

Comtech's radar and troposcatter systems provide advanced radar and communication systems for military and government applications.

Public Safety and Location Technologies

Comtech's public safety and location technologies provide emergency response systems, 911 call handling, and location-based services.

Cyber Security Solutions

Comtech's cyber security solutions provide advanced threat detection, incident response, and penetration testing services.

Network and Communication Systems

Comtech's network and communication systems provide advanced communication networks and infrastructure for government and commercial applications.

Troposcatter Systems

Comtech's troposcatter systems provide high-capacity, long-distance communication systems for military and government applications.

Satellite Earth Station Equipment

Comtech's satellite earth station equipment provides advanced satellite communication systems for government and commercial applications.

8. Comtech Telecommunications Corp.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Comtech Telecommunications Corp. faces moderate threat from substitutes due to the availability of alternative communication technologies.

Bargaining Power Of Customers

Comtech Telecommunications Corp. has a diverse customer base, which reduces the bargaining power of individual customers.

Bargaining Power Of Suppliers

Comtech Telecommunications Corp. relies on a few key suppliers for critical components, giving them moderate bargaining power.

Threat Of New Entrants

The telecommunications industry has high barriers to entry, making it difficult for new entrants to compete with Comtech Telecommunications Corp.

Intensity Of Rivalry

The telecommunications industry is highly competitive, with many established players competing for market share, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 28.07%
Debt Cost 8.64%
Equity Weight 71.93%
Equity Cost 11.72%
WACC 10.85%
Leverage 39.02%

11. Quality Control: Comtech Telecommunications Corp. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Sonim Technologies

A-Score: 4.7/10

Value: 10.0

Growth: 4.2

Quality: 4.1

Yield: 0.0

Momentum: 10.0

Volatility: 0.0

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Harmonic

A-Score: 4.3/10

Value: 5.1

Growth: 6.0

Quality: 7.4

Yield: 0.0

Momentum: 2.0

Volatility: 5.3

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A-Score: 4.0/10

Value: 6.0

Growth: 4.8

Quality: 3.1

Yield: 0.0

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Volatility: 0.3

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A-Score: 3.5/10

Value: 10.0

Growth: 4.9

Quality: 5.1

Yield: 0.0

Momentum: 0.5

Volatility: 0.7

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A-Score: 3.5/10

Value: 6.0

Growth: 1.9

Quality: 1.9

Yield: 0.0

Momentum: 10.0

Volatility: 1.0

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Comtech

A-Score: 2.9/10

Value: 9.8

Growth: 1.2

Quality: 3.5

Yield: 1.0

Momentum: 1.0

Volatility: 0.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

3.25$

Current Price

3.25$

Potential

-0.00%

Expected Cash-Flows