Analyst: “Comtech a lost cause for 2022”
June 21, 2022
By Chris Forrester
Comtech Telecommunications designs, develops and produces systems and services for advanced communications solutions. But trading is currently a challenge, says a report from analysts Quilty.
“For the second consecutive quarter, Comtech slashed its forward guidance (EBITDA down 24 per cent), citing a combination of near-term supply-side constraints and timing issues, including the delay of two large contracts that slipped into FY23. Inflationary price increases are also impacting demand, with one lost order (valued at ~$10 million) due to customer pushback on a price increase,” says Quilty Analytics.
Its all-important backlog has declined for the seventh time in the past 9 quarter-year periods. Comtech’s exit from the Russian market is also expected to result in $10-15 million in lost revenues, plus $6 million of incremental costs to shift developmental resources
The report adds that Comtech’s orders have improved in Q3, and Comtech’s pipeline remains strong at $1.2 billion, but management warned that several major projects are being put on pause due to current economic turmoil.
“These delays will have a knock-on effect on Comtech’s FY23 outlook,” states Quilty.
The news has not helped Comtech’s share price which has been under pressure for some weeks.
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