CLFD - Northland cuts rating on Clearfield to market perform after results

2023-08-04 09:55:35 ET

Northland Capital Markets on Friday downgraded Clearfield ( NASDAQ: CLFD ) to "Market Perform" from a previous investment rating of "Outperform," but maintained its price target, following the company's third quarter results.

The company on Thursday after the bell reported Q3 net sales of $61.3 million, down 14% from last year. Net income more than halved to $5.2 million vs. $12.7 million a year earlier.

"In addition to normal downward seasonality, the company expects some slowness in Tier 3 spend prior to the disbursement of BEAD rural broadband funding in mid CY24. Combined with a recovery in the shares to our $45 PT from lows in the mid $30's, we move to the sidelines pending greater visibility to resumed growth in 2HCY24," Northland analyst Tim Savageaux said in an August 4 note.

The ratings agency said its price target of $45 represents a 2.2X multiple of FY24 revenue.

CLFD is rated "STRONG SELL" by Quant but has a "BUY" rating from Wall Street and SA analysts.

Shares of the company have fallen 50.6% YTD and 56.2% in the last 12 months.

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