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Harmonic (NAS:HLIT) Graham Number

: $2.47 (As of Mar. 2023)
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Graham Number is a figure that measures a stock's fundamental value by taking into account the company's earnings per share and book value per share. The Graham number is the upper bound of the price range that a defensive investor should pay for the stock. According to the theory, any stock price below the Graham number is considered undervalued, and thus worth investing in.

As of today (2023-06-02), the stock price of Harmonic is $17.75. Harmonic's graham number for the quarter that ended in Mar. 2023 was $2.47. Therefore, Harmonic's Price to Graham Number ratio for today is 7.19.

The historical rank and industry rank for Harmonic's Graham Number or its related term are showing as below:

HLIT' s Price-to-Graham-Number Range Over the Past 10 Years
Min: 0.74   Med: 3.56   Max: 14.22
Current: 7.19

During the past 13 years, the highest Price to Graham Number ratio of Harmonic was 14.22. The lowest was 0.74. And the median was 3.56.

HLIT's Price-to-Graham-Number is ranked worse than
96.09% of 1559 companies
in the Hardware industry
Industry Median: 1.40 vs HLIT: 7.19

Graham Number is a combination of asset valuation and earnings power valuation. It is a very conservative way of valuing a stock.


Harmonic Graham Number Historical Data

The historical data trend for Harmonic's Graham Number can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Harmonic Annual Data
Trend Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22
Graham Number
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only - - - 1.22 2.11

Harmonic Quarterly Data
Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23
Graham Number Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1.24 2.03 2.36 2.15 2.47

Competitive Comparison

For the Communication Equipment subindustry, Harmonic's Graham Number, along with its competitors' market caps and Graham Number data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Harmonic Graham Number Distribution

For the Hardware industry and Technology sector, Harmonic's Graham Number distribution charts can be found below:

* The bar in red indicates where Harmonic's Graham Number falls in comparison to its industry or sector. The grey bar indicates the Graham Number's extreme value range as defined by GuruFocus.



Harmonic Graham Number Calculation

Graham Number is a concept based on Ben Graham's conservative valuation of companies.

Harmonic's Graham Number for the fiscal year that ended in Dec. 2022 is calculated as

Graham Number
=sqrt of (22.5* Tangible Book per Share *EPS without NRI)
=sqrt of (22.5*0.79*0.25)
=2.11

Harmonic's Graham Number for the quarter that ended in Mar. 2023 is calculated as

Graham Number
=sqrt of (22.5*Tangible Book per Share*EPS without NRI (TTM))
=sqrt of (22.5*0.874*0.31)
=2.47

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Harmonic  (NAS:HLIT) Graham Number Explanation

Ben Graham actually did not publish a formula like this. But he wrote in The Intelligent Investor (1948 version) regarding to the criteria for purchases:

Current price should not be more than 15 times average earnings of the past three years.

Current price should not be more than 1.5 times the book value last reported. However, a multiplier of earnings below 15 could justify a correspondingly higher multiplier of assets. As a rule of thumb we suggest that the product of the multiplier times the ratio of price to book value should not exceed 22.5. (This figure corresponds to 15 times earnings and 1.5 times book value. It would admit an issue selling at only 9 times earnings and 2.5 times asset value, etc.)

Unlike valuation methods such as DCF or Discounted Earnings, the Graham number does not take growth into the valuation. Unlike the valuation methods based on book value alone, it takes into account the earnings power. Therefore, the Graham Number is a combination of asset valuation and earnings power valuation.

In general, the Graham number is a very conservative way of valuing a stock. It cannot be applied to companies with negative book values.

Harmonic's Price to Graham number Ratio for today is calculated as

Price to Graham number=Share Price (Today)/Graham number (Q: Mar. 2023 )
=17.75/2.47
=7.19

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Be Aware

Please keep these in mind:

1. Graham Number does not take growth into account. Therefore it underestimates the values of the companies that have good earnings growth. We feel that if the earnings per share grows more than 10% a year, Graham Number underestimates the value.
2. Graham Number punishes the companies that have temporarily low earnings. Therefore, an average of earnings makes more sense in the calculation of Graham Number.
3. Graham Numbers underestimates companies that are light with book.


Harmonic Graham Number Related Terms

Thank you for viewing the detailed overview of Harmonic's Graham Number provided by GuruFocus.com. Please click on the following links to see related term pages.


Harmonic (NAS:HLIT) Business Description

Harmonic logo
Traded in Other Exchanges
Address
2590 Orchard Parkway, San Jose, CA, USA, 95131
Harmonic Inc designs and manufactures video infrastructure products and system solutions to deliver video and broadband services to consumer devices. The firm operates in two segments: Video, which sells video processing, production, and playout solutions to cable operators and satellite and telecommunications providers; and Cable Access, which sells cable edge solutions to cable operators. Roughly half of the firm's revenue is generated in the Americas, with the rest coming from Europe, the Middle East, and Africa, as well as the Asia Pacific region.
Executives
Sophia Kim director 2590 ORCHARD PARKWAY, SAN JOSE CA 95131
Daniel T Whalen director 2055 BENJAMIN CIRCLE, WALL NJ 07719
Ian Graham officer: SVP, Intl Sales & Video Svcs 2590 ORCHARD PARKWAY, SAN JOSE CA 95131
Eric Louvet officer: SVP Sales NA & APAC 4300 NORTH FIRST STREET, SAN JOSE CA 95134
Deborah Clifford director 4300 NORTH FIRST STREET, SAN JOSE CA 95134
Timothy Warren officer: SVP, Video Products 4300 NORTH FIRST STREET, SAN JOSE CA 95134
David Krall director C/O AVID TECHNOLOGY INC, ONE PARK WEST, TEWKSBURY MA 01876
Sanjay Kalra officer: Chief Financial Officer HARMONIC INC., 4300 NORTH FIRST STREET, SAN JOSE CA 95134
Tom Lookabaugh director 6290 SEQUENCE DRIVE, SAN DIEGO CA 92121
Nikos Theodosopoulos director C/O ARISTA NETWORKS, INC., 5453 GREAT AMERICA PARKWAY, SANTA CLARA CA 95054
Bart Spriester officer: SVP, Video Products 4300 NORTH FIRST STREET, SAN JOSE CA 95134
George Stromeyer officer: SVP of Worldwide Sales 4300 NORTH FIRST STREET, SAN JOSE CA 95134
Mitzi Reaugh director 4300 NORTH FIRST STREET, SAN JOSE CA 95134
Susan Swenson director C/O PALM INC, 5470 GREAT AMERICAN PARKWAY MS12116, SANTA CLARA CA 95052
Mark Carrington officer: VP of Worldwide Sales 4300 NORTH FIRST STREET, SAN JOSE CA 95134

Harmonic (NAS:HLIT) Headlines