CMTL - Comtech Telecommunications (CMTL) Stumbles After CEO Ouster and Accounting Concerns - Hagens Berman
SAN FRANCISCO, June 05, 2024 (GLOBE NEWSWIRE) -- Hagens Berman urges Comtech Telecommunications Corp. (NASDAQ: CMTL) investors who suffered substantial losses to take action by submitting your losses here .
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Phone: 844-916-0895
Next-generation 911 emergency communication company Comtech Telecommunications Corp. (CMTL) has faced a tumultuous period in recent months, raising questions about the Melville-based company's financial health and future prospects.
Shifting Strategies and Financial Worries
Under CEO Ken Peterman, Comtech implemented the “One Comtech” strategy, aiming to unify previously independent business units. This approach reportedly led to five quarters of revenue growth. However, cracks began to show in Dec. 2023.
Comtech’s earnings report for the quarter ended October 31, 2023, raised a “going concern” flag, indicating doubt about the company’s ability to meet its financial obligations. The report also revealed that Comtech had depleted most of its credit line and was struggling to renew it before its Oct. 2024 expiration.
Furthermore, analysts expressed concern about Comtech’s use of "unbilled receivables," an accounting practice that recognizes revenue before the company has actually collected the funds. Some analysts criticized this practice as “aggressive accounting.” These concerns led to a 29% drop in Comtech's stock price on Dec. 8, 2023.
Leadership Change and Continued Uncertainty
In Mar. 2024, the company’s board of directors fired CEO Ken Peterman. While Comtech maintained the termination was unrelated to business strategy or financial performance, citing a commitment to ethics, investors remained skeptical.
Adding to the turmoil, Comtech announced a delay in filing its quarterly financial statements with the Securities and Exchange Commission (SEC) on Mar. 13, 2024. This news triggered another stock decline, with shares falling 27% that same day.
Disappointing Financials and Investor Concerns
On Mar. 18, 2024, under interim leadership, Comtech released its second-quarter financial results for 2024. The report revealed significant shortfalls compared to analyst expectations, causing another sharp decline in stock price, with a drop of up to 32% on Mar. 19, 2024.
These developments have raised serious concerns about Comtech's financial health and future outlook, and has sparked an investigation by Hagens Berman into potential securities violations.
“We are particularly interested in examining Comtech’s use of unbilled receivables and whether these practices accurately reflect the company’s financial health,” said Reed Kathrein, the Hagens Berman partner leading the investigation.
If you invested in Comtech Telecommunications and have substantial losses, or have knowledge that may assist the firm’s investigation, submit your losses now .
If you’d like more information and answers to frequently asked questions about the Comtech Telecommunications investigation, read more .
About Hagens Berman
Hagens Berman is a global plaintiffs’ rights complex litigation firm focusing on corporate accountability. The firm is home to a robust practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and other wrongdoings. Hagens Berman’s team has secured more than $2.9 billion in this area of law. More about the firm and its successes can be found at hbsslaw.com . Follow the firm for updates and news at @ClassActionLaw .
Contact:
Reed Kathrein, 844-916-0895