Needham & Company Upgrades ADTRAN (ADTN) to Buy

Needham & Company analyst Richard Valera upgraded ADTRAN (NASDAQ: ADTN) from Hold to Buy with a price target of $20.00.

The analyst commented, "ADTN delivered a solid 4Q print and issued 1Q21 guidance ~inline w/consensus, despite ongoing/worsening component supply issues, which are expected to pressure GMs over the next several Qs. That said, demand trends sounded robust, w/excellent strength seen w/US Tier 2/3 customers, progress being made on several Tier 1 wins (expected to contribute materially in C'2H21) and RDOF another potential driver in late C'21. While noting some added GM pressure/risk from supply issues, we remain confident ADTN should be able to drive revenue acceleration in C2H21 and into C'22. That said, we think ADTN's valuation of ~1.2x EV/Sales on our C'21 estimate, the lowest of its peers and half peer group avg of 2.4x, drives a favorable risk/reward. As such we upgrade to Buy with a PT of $20, or EV/Sales of 1.4x our C'22 forecast."

For an analyst ratings summary and ratings history on ADTRAN click here. For more ratings news on ADTRAN click here.

Shares of ADTRAN closed at $16.09 yesterday.

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