Investors never know what to expect for Harmonic (Nasdaq: HLIT), as it has wavered between topping and missing analysts estimates during the past fiscal year. The company will unveil its latest earnings on Wednesday, July 20. Harmonic designs, manufactures, and sells versatile and high-performance video products and system solutions that enable service providers to efficiently deliver the next generation of broadcast and on-demand services.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Harmonic, with five of nine analysts rating it hold. Analysts like Harmonic better than competitor Arris Group overall. Two out of 13 analysts rate Arris Group a buy, compared with four of nine for Harmonic. Analysts still rate the stock a hold, but they are a bit more wary about it compared with three months ago.
  • Revenue forecasts: On average, analysts predict $139.4 million in revenue this quarter. That would represent a rise of 45.9% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.07 per share. Estimates range from $0.06 to $0.08.

What our community says:
CAPS All-Stars are solidly behind the stock, with 98.7% giving it an "outperform" rating. The community at large concurs with the All-Stars, with 94.4% awarding it a rating of "outperform." Fools are gung-ho about Harmonic, though the message boards have been quiet lately, with only 91 posts in the past 30 days. Harmonic has a bullish CAPS rating of five out of five stars that is about on par with the Fool community's assessment.

Let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters. 

Quarter Q1 Q4 Q3 Q2
Gross Margin 46.6% 44.4% 45.4% 47.8%
Operating Margin (0.1%) (2.2%) 1.5% 4.3%
Net Margin 0.4% (9.9%) (0.3%) 4.7%
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