ADTRAN (NASDAQ:ADTN) Shares Gap Down - Should You Sell?

Key Points

• ADTRAN's stock price gapped down from $10.44 to $9.40, closing at $9.03 after trading, with a volume of nearly 1 million shares.
• Analysts have downgraded the stock from "buy" to "hold," with an average rating of "Moderate Buy" and an average price target of $12.00.
• Despite a 17.3% revenue increase year-over-year, the company reported a negative EPS of ($0.26), missing expectations significantly by ($0.27).

ADTRAN Holdings, Inc. (NASDAQ:ADTN - Get Free Report)'s stock price gapped down prior to trading on Tuesday . The stock had previously closed at $10.44, but opened at $9.40. ADTRAN shares last traded at $9.03, with a volume of 988,798 shares.

Wall Street Analysts Forecast Growth

A number of equities analysts have recently issued reports on ADTN shares. Wall Street Zen downgraded ADTRAN from a "buy" rating to a "hold" rating in a research report on Saturday, August 30th. Wolfe Research started coverage on ADTRAN in a research report on Monday, July 7th. They set a "peer perform" rating on the stock. Four research analysts have rated the stock with a Buy rating and one has issued a Hold rating to the company's stock. According to data from MarketBeat.com, the company currently has an average rating of "Moderate Buy" and an average price target of $12.00.

ADTRAN Stock Performance

The company has a debt-to-equity ratio of 1.12, a current ratio of 1.96 and a quick ratio of 1.19. The company has a market capitalization of $724.22 million, a PE ratio of -6.92 and a beta of 1.39. The firm's fifty day simple moving average is $9.30 and its 200 day simple moving average is $8.67.

ADTRAN (NASDAQ:ADTN - Get Free Report) last posted its earnings results on Monday, August 4th. The communications equipment provider reported ($0.26) earnings per share (EPS) for the quarter, missing the consensus estimate of $0.01 by ($0.27). ADTRAN had a negative return on equity of 10.09% and a negative net margin of 11.02%.The firm had revenue of $265.07 million for the quarter, compared to analysts' expectations of $255.57 million. During the same period in the previous year, the company earned ($0.24) earnings per share. The company's revenue was up 17.3% compared to the same quarter last year. On average, research analysts predict that ADTRAN Holdings, Inc. will post -0.5 EPS for the current year.

Institutional Investors Weigh In On ADTRAN

Hedge funds have recently modified their holdings of the company. Cape Investment Advisory Inc. purchased a new stake in shares of ADTRAN during the 2nd quarter worth about $27,000. FNY Investment Advisers LLC purchased a new position in ADTRAN in the 1st quarter valued at about $65,000. New York State Teachers Retirement System purchased a new position in ADTRAN in the 2nd quarter valued at about $65,000. Park Avenue Securities LLC purchased a new position in ADTRAN in the 2nd quarter valued at about $91,000. Finally, Ballentine Partners LLC purchased a new position in ADTRAN in the 1st quarter valued at about $94,000. 80.56% of the stock is owned by hedge funds and other institutional investors.

ADTRAN Company Profile

ADTRAN Holdings, Inc, through its subsidiaries, provides networking and communications platforms, software, systems, and services in the United States, Germany, the United Kingdom, and internationally. It operates through two segments, Network Solutions, and Services & Support. It offers residential gateways; ethernet passive optical network ONUs; gigabit passive optical network/XGS-PON ONTs; traditional SSE, routers, and switches; edge cloud; carrier ethernet network interface devices; Optical Line Terminals; Packet Aggregation, Copper Access, and Oscilloquartz; optical transport and engine solutions; infrastructure monitoring solution; and training, professional, software, and managed services.

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