Public safety tech firm Comtech posts lower than expected Q4 sales

Overview

• U.S. public safety tech provider's Q4 net sales fell 12% yr/yr to $66.2 mln

• Company posted Q4 operating loss from continuing operations of $3.9 mln

• Comtech agreed to sell most of its Satellite and Space business for $157.5 mln cash

Outlook

• Company expects to close sale of most S&S business in calendar 2026

• Comtech anticipates investing $13 mln to $15 mln in transition costs over fiscal 2027-2028

• Company expects annual cost savings of $16 mln to $18 mln after S&S sale and transition

Result Drivers

• GROSS MARGIN EXPANSION - Co attributed higher gross margin to continued adoption of its solutions and migration of PSAPs onto NG9-1-1 core services and call handling platforms

• PRODUCT LAUNCHES - Co launched Allerium Mira and Allerium Coral in June, aimed at expanding capabilities for public safety agencies

• CYBERSECURITY TRAINING - Higher net sales of cyber security training services partly offset declines in location-based and call handling solutions

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "strong buy" and the breakdown of recommendations is 2 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the communications & networking peer group is "buy."

• Wall Street's median 12-month price target for Comtech Telecommunications Corp is $4.25, about 226.9% above its October 13 closing price of $1.30

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)