This analyst loves Aviat Networks

In an April 2 report, Roth Capital Markets analyst Scott Searle reiterated his “Purchase” ranking and $38.00 goal on Aviat Networks (Aviat Networks Inventory Quote, Chart, Information, Analysts, Financials NASDAQ:AVNW), arguing the inventory’s current weak point ought to be considered as a shopping for alternative quite than an indication of deteriorating fundamentals.

Searle stated the 13% drop within the shares adopted a brief report centered on elevated DSOs, the NEC acquisition and buyer focus issues tied to MTN, however argued the report added nothing new and missed bettering traits in working capital, money stream and execution. He stated DSOs peaked in September and declined in December, stock turns improved to three.9x from 3.1x in March 2025, and web debt fell by greater than $22-million within the December quarter.

He stated these stability sheet issues have been extra reflective of previous points tied to element shortages and the NEC acquisition than present working situations, and added that administration is making progress addressing materials weak point issues beneath new CFO Andy Schmidt. Searle additionally stated MTN represents lower than 5% of gross sales, making the shopper danger argument overstated.

On valuation, he stated Aviat is buying and selling at roughly 6x his calendar 2027 EPS estimate, or nearer to 5x after the current selloff, and at 0.7x EV/gross sales, each close to the low finish of historic ranges. He added that tangible ebook worth stands at about $17.50 per share, versus a current shut of $19.67.

Searle stated the core enterprise stays wholesome outdoors the Center East, which he estimates contributes about $2-million to $5-million of quarterly income. He pointed to continued non-public community demand, together with at 4RF and in utilities, the place capital spending development of about six per cent in 2026 ought to stay supportive.

He additionally highlighted upside potential from Verizon’s multi-dwelling unit alternative, saying Aviat seems well-positioned after assembly the technical necessities for deployment. Primarily based on Park Associates knowledge, he stated roughly one-third of U.S. residents stay in MDUs, with an estimated 4 million to 5 million items lined beneath Verizon’s buy of Starry, representing a possible tens-of-millions-of-dollars annual alternative if commercialization strikes forward.

One other potential catalyst, he stated, is Nokia’s strategic shift towards knowledge centres. Searle argued that as Nokia de-emphasizes legacy wi-fi transmission and backhaul companies, Aviat may benefit close to time period by way of share good points and, over time, probably from an accretive consolidation alternative.

Searle stated Aviat ought to generate Adjusted EBITDA of $47.9-million on income of $450.4-million in fiscal 2026, bettering to Adjusted EBITDA of $62.5-million on income of $488.2-million in fiscal 2027.

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