MeritValue

HARMONIC INC.

HLITdata completeness 100%18 fiscal years on file
The thesis, from the filings

HARMONIC INC. earns about 8% on invested capital, below its ~9% cost of capital, but has diluted owners by 8% over 5 years — no moat visible in the numbers. The estimate methods put fair value between $2.56 and $26.67 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$507.1M1$625M2$388.5M3$488.2M3$360.5M3
Net income$13.3M4$28.2M5$84M6$39.2M6−$43.3M6
Operating cash flow$41M7$5.48M8$7.06M9$61.9M9$108M9
Capital expenditure$13M10$9.25M11$8.48M12$9.19M12$11.1M12
Free cash flow (derived)$28M7−$3.77M8−$1.42M9$52.7M9$96.9M9
Total debt$18M13$15.9M14$015$228.6M16$224.2M16
Cash & equivalents$133.4M17$89.6M18$84.3M19$101.5M19$124.1M19
Diluted shares106.2M112.4M117.4M117.5M114.2M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$33.56
your share of equity
Profit it earned you last year
−$3.79
Free cash flow it threw off
$8.49
Debt you’d be carrying
$19.63

10 shares is a claim on $33.56 of net worth that earned you −$3.79 and generated $8.49 of cash last year, against $19.63 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
8% avg · 5y
FY21 11%FY22 13%FY23 9%FY24 9%FY25 1%

It earned about 8% on invested capital against a ~9% cost of capital — below the cost of funding. The numbers show no moat.

seeing a moat in the numbers →
Management signal · capital allocation
+8% shares · 5y

Share count is up 8% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has risen 1147% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $2.56 and $26.67 a share. They rest on different assumptions, so where they diverge is the story.

DCF · Growth Exit 10Y
$26.67
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth20.0%
  • fcfBase$52.7M
DCF · Growth Exit 5Y
$14.18
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth20.0%
  • fcfBase$52.7M
Earnings Power Value
$2.56
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$28.2M
  • growthAssumed0.0%
Graham Number
not applicable
diluted EPS missing or non-positive — Graham Number undefined

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years20.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $14.18
The three cases
Bear0.0%$5.72
Base20.0%$14.18
Bull20.0%$14.18

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 20.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0000851310-24-000024 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0000851310-25-000021 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001193125-26-067506 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0000851310-24-000024 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0000851310-25-000021 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001193125-26-067506 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0000851310-24-000024 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0000851310-25-000021 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001193125-26-067506 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0000851310-24-000024 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0000851310-25-000021 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001193125-26-067506 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0000851310-22-000012 (LongTermDebt)
  14. 10-K/A · period ending 2022-12-31 · accession 0000851310-23-000083 (LongTermDebt)
  15. 10-K · period ending 2023-12-31 · accession 0000851310-25-000021 (LongTermDebtNoncurrent)
  16. 10-K · period ending 2024-12-31 · accession 0001193125-26-067506 (LongTermDebtNoncurrent)
  17. 10-K/A · period ending 2021-12-31 · accession 0000851310-23-000083 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-12-31 · accession 0000851310-25-000021 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-12-31 · accession 0001193125-26-067506 (CashAndCashEquivalentsAtCarryingValue)