Harmonic (HLIT) is a tech stock you might consider buying if you are interested in value buys. Trading at under $12, HLIT is down 9.5% year-to-date. While that doesn’t read optimistic, Tradequotex.com analyst Rahul Nambiampurath believes that it might have the potential to surge 50% in months to come.

“As the demand for high-quality, uninterrupted video streaming continues to surge, Harmonic’s advanced technology positions it to lead the market. The company’s commitment to innovation and its strong partnerships will drive significant growth, making it a key player in shaping the future of digital content delivery,” mentions Rahul.

What Makes Harmonic (HLIT) a Value Buy Right Now?

Rahul has closely analyzed Harmonic’s business model and come up with the following reasons why it is poised for growth:

• Industry leadership: Trusted by over 5,000 companies worldwide, including major names like CNN and Comcast.

• Technological innovation: Cutting-edge technology for gigabit internet services and high-end video streaming

• Strong customer base: Established relationships with significant Tier-1 companies like Charter and Comcast

• Financial goals and projections: Management’s goal to reach $1.0 billion in revenue and $254 million in adjusted EBITDA by 2026

• Revenue and earnings: Q1 2024 revenue of $122.1 million exceeded forecast despite being down year-over-year

• Growth in vCMTS space: Harmonic’s cOS remains the leader in the virtualized Cable Modem Termination System (vCMTS) market

• Expansion plans: Plans for multi-year rollouts with key customers, ensuring steady revenue growth.

Rahul adds that the company’s ambitious financial goals of reaching $1.0 billion in revenue and $254 million in adjusted EBITDA by 2026, combined with its leadership in the virtualized Cable Modem Termination System (vCMTS) market and plans for multi-year rollouts, highlight its potential for steady revenue growth.

Despite a year-over-year revenue dip, Q1 2024 results exceeded forecasts, showcasing Harmonic’s resilience and growth trajectory.

Analyzing HLIT’s Price Action

Besides the fundamentals and financials, Rahul also spent considerable time reading HLIT’s daily price chart. Even though the lack of trading volume is evident, it is picking up with HLIT currency trading inside a pennant. A breach above the upper trendline needs to be monitored, with $13.71 being a key resistance level.

HLIT daily chart: TradingView

Per the Fibonacci levels associated with the previous swing highs and lows, HLIT’s first major hurdle would be $15.84. Once breached, it has the legs to hit $17.93.

Rosenblatt’s Steve Frankel agrees with Rahul’s analysis, rating HLIT a Buy with a target price of $18.