Rosenblatt has raised its one-year price target for Harmonic Inc. (NASDAQ:HLIT) to $16 from $14 and continues to rate the stock as a Buy, citing the company's fourth-quarter performance as evidence that earlier headwinds have reversed.
The investment firm pointed to Harmonic's record bookings in the quarter and a book-to-bill ratio of 3.5 times as central indicators of improving business conditions. At the time of the announcement, Harmonic shares were trading at $10.73 with a market capitalization of $1.2 billion, trading near a 52-week high of $11.49. InvestingPro Tips indicate the firm's valuation implies a free cash flow yield of 11%.
Rosenblatt characterized Harmonic as a driver of the shift to next-generation broadband technology and described management's revenue guidance as conservative. The $16 target is derived from applying a low-20s multiple to Rosenblatt's 2027 earnings-per-share estimate of $0.80. The firm said it believes the necessary elements are now in place for the stock to perform.
Harmonic currently trades at a price-to-earnings ratio of 25.15. InvestingPro analysis referenced by Rosenblatt suggests the stock is fairly valued at current levels. For investors seeking more extensive analysis, a Pro Research Report covering HLIT and more than 1,400 other U.S. equities is available.
Rosenblatt said it is placing greater emphasis on Harmonic following the fourth-quarter report, which it believes demonstrates a clear shift in the company's operating environment. The firm highlighted the broadband business specifically, which beat consensus revenue expectations by roughly 8% and recorded its third straight quarter of growth. The strong Q4 book-to-bill ratio, Rosenblatt noted, substantially increased the company's backlog.
Separately, Harmonic disclosed it has received a $145 million cash offer from MediaKind for its Video Business segment. That transaction is expected to close in the first half of 2026, subject to regulatory approvals and a consultation process with a French employee works council.
Additional analyst activity has also reflected confidence in Harmonic's broadband momentum. Needham raised its price target on Harmonic shares to $17 while maintaining a Buy rating and cited the broadband segment's strength. In another note, Needham reiterated a Buy rating and a $15.00 price target, highlighting promising developments in the Broadband unit for 2026.
Harmonic is engaged in customer deployments and partnerships that reinforce its focus on broadband technology. The company is working with Telia to upgrade Norway's broadband network using its cOS virtualized broadband platform, with the initiative intended to increase connectivity speeds and enhance customer experience through adoption of DOCSIS 3.1 technology. Meanwhile, cable operators are also moving forward with related network upgrades: Comcast is deploying D4 in volume and preparing for a transition to its D4U node in early 2025, and Charter is rolling out D3.1 in volume.
Taken together, the analyst commentary, the MediaKind offer, and the broadband unit's outperformance form the basis for recent upward revisions to Harmonic's price targets and continued Buy recommendations. Rosenblatt's valuation approach - a low-20s multiple on a 2027 EPS projection of $0.80 - underpins the $16 target, while market metrics such as the current P/E and InvestingPro's fair-value indication provide context for investors assessing the stock.