Is Harmonic, Inc. overvalued or undervalued?

As of 28 July 2025, the valuation grade for Harmonic, Inc. has moved from fair to attractive, indicating a more favorable assessment of its stock. The company appears undervalued, particularly when considering its P/E ratio of 14, which is significantly lower than the peer average of 15.17 for similar companies like InterDigital, Inc. Additionally, Harmonic's EV to EBITDA ratio stands at 8.80, while its peers, such as Digi International, Inc., have a much higher ratio of 16.75, further supporting the undervaluation thesis. The company also boasts a strong ROCE of 25.18% and ROE of 17.37%, suggesting efficient use of capital.
In terms of peer comparison, Harmonic, Inc. is positioned favorably against InterDigital, Inc., which has a P/E of 43.22, and Digi International, Inc., which is considered expensive with a P/E of 34.86. Despite recent struggles, with a year-to-date return of -20.71% compared to the S&P 500's 12.22%, the long-term outlook remains positive, as evidenced by a 5-year return of 83.39%, albeit still trailing the S&P 500's 96.61%. This context reinforces the notion that Harmonic, Inc. is currently undervalued relative to its peers and historical performance.