This analyst loves Aviat Networks

In an April 2 report, Roth Capital Markets analyst Scott Searle reiterated his “Buy” rating and $38.00 target on Aviat Networks (Aviat Networks Stock Quote, Chart, News, Analysts, Financials NASDAQ:AVNW), arguing the stock’s recent weakness should be viewed as a buying opportunity rather than a sign of deteriorating fundamentals.

Searle said the 13% drop in the shares followed a short report focused on elevated DSOs, the NEC acquisition and customer concentration concerns tied to MTN, but argued the report added nothing new and overlooked improving trends in working capital, cash flow and execution. He said DSOs peaked in September and declined in December, inventory turns improved to 3.9x from 3.1x in March 2025, and net debt fell by more than $22-million in the December quarter.

He said those balance sheet concerns were more reflective of past issues tied to component shortages and the NEC acquisition than current operating conditions, and added that management is making progress addressing material weakness concerns under new CFO Andy Schmidt. Searle also said MTN represents less than 5% of sales, making the customer risk argument overstated.

On valuation, he said Aviat is trading at roughly 6x his calendar 2027 EPS estimate, or closer to 5x after the recent selloff, and at 0.7x EV/sales, both near the low end of historical ranges. He added that tangible book value stands at about $17.50 per share, versus a recent close of $19.67.

Searle said the core business remains healthy outside the Middle East, which he estimates contributes about $2-million to $5-million of quarterly revenue. He pointed to continued private network demand, including at 4RF and in utilities, where capital spending growth of about six per cent in 2026 should remain supportive.

He also highlighted upside potential from Verizon’s multi-dwelling unit opportunity, saying Aviat appears well-positioned after meeting the technical requirements for deployment. Based on Park Associates data, he said roughly one-third of U.S. residents live in MDUs, with an estimated four million to five million units covered under Verizon’s purchase of Starry, representing a potential tens-of-millions-of-dollars annual opportunity if commercialization moves ahead.

Another possible catalyst, he said, is Nokia’s strategic shift toward data centres. Searle argued that as Nokia de-emphasizes legacy wireless transmission and backhaul businesses, Aviat could benefit near term through share gains and, over time, potentially from an accretive consolidation opportunity.

Searle said Aviat should generate Adjusted EBITDA of $47.9-million on revenue of $450.4-million in fiscal 2026, improving to Adjusted EBITDA of $62.5-million on revenue of $488.2-million in fiscal 2027.

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