What Falling Estimates & Price Mean for Harmonic (HLIT)

Zacks

 Similar to wise buying decisions, exiting certain underperformers at the right time helps maximize portfolio returns. Selling off losers can be difficult, but if both the share price and estimates are falling, it could be time to get rid of the security before more losses hit your portfolio.
 
One such stock that you may want to consider dropping is Harmonic Inc. (HLIT), which has witnessed a significant price decline in the past four weeks, and it has seen negative earnings estimate revisions for the current quarter and the current year. A Zacks Rank #4 (Sell) further confirms weakness in HLIT.
 
A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 1 estimate moving down in the past 30 days, with no upward revision. This trend has caused the consensus estimate to trend lower, going from 19 cents a share a month ago to its current level of 13 cents.
 
Also, for the current quarter, Harmonic has seen 1 downward estimate revision versus no revision in the opposite direction, dragging the consensus estimate down to a loss of a penny a share from 3 cents over the past 30 days.  
 
The stock also has seen some pretty dismal trading lately, as the share price has dropped 19.4% in the past month.
 
So it may not be a good decision to keep this stock in your portfolio anymore, at least if you don’t have a long time horizon to wait.
 
If you are still interested in the Communications Components industry, you may instead consider some better-ranked stocks including Corning Inc. (GLW), Vocera Communications, Inc. (VCRA) and Plantronics, Inc. (PLT). While Corning and Vocera Communications hold a Zacks Rank #1 (Strong Buy), and Plantronics carries a Zacks Rank #2 (Buy). With favorable Zacks Ranks, these stocks may be better selections at this time.
 
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HARMONIC INC (HLIT): Free Stock Analysis Report

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