Marvelous Microcaps

Aviat Networks, Inc. (AVNW)


At Perritt Capital Management, we take focused positions in companies where we have a high conviction in their success; companies that are out of the mainstream of small cap investing. To highlight our process, we are pleased to present the newest installment in our ongoing series “Marvelous Microcaps – Big Ideas on Small Companies.”  This series profiles companies that we believe have a niche in their existing markets or are launching a product that could disrupt their marketplace.


Aviat Networks, Inc. (AVNW) is the leading expert in wireless transport solutions and works to provide dependable products, service, and support to its customers.  Network operators are facing enormous capacity demands driven by 5G, rural broadband, and private network requirements. Aviat is responding to that challenge with game-changing innovations in wireless transport systems, software, and services.  They provide a carrier-class wireless transport system that simplifies network complexity, lowers costs, and delivers a superior customer experience.  They focus on lowering the total cost of ownership while providing increased capacity, improved network efficiency, and performance all with less equipment, lower power consumption, minimized site costs, and fewer resources.


Aviat has been focused on acquisitions.  They tried to purchase Ceragon last summer, but it fell through.  They have rebounded by making an interesting bolt-on deal for wireless activities from NEC.  They will pay $70 million for NEC’s Wireless Transport Business, adding $150 million in revenue per year.  This purchase provides them with greater diversification, more product offerings, and synergies.  Pro forma EBITDA is anticipated to be around $50 million.

AVNW has been posting double digit increases in sales each quarter.  They reported their fourth quarter earnings recently and revenues increased 8%, core profitability was up 30% and they posted their highest quarter for bookings in seven years.  Despite their strong track record, the shares trade at only 7x earnings and 6x AEBITDA.  The company has many catalysts including government funding, 5G private network cycle, rural broadband cycle, acceleration of international revenue, and ramp of new products.

Data here is obtained from what are considered reliable sources.  We consider the data used to be relevant and reliable.

Fund holdings and sector allocations are subject to change at any time and should not be considered a recommendation to buy or sell any security. Please click PRCGX and PREOX for a list of the top ten holdings.

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization.
AEBITDA means Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization.

Before you invest in the Perritt MicroCap Opportunities Fund or Perritt Ultra MicroCap Fund, please refer to the prospectus for important information about the investment company, including investment objectives, risks, charges, and expenses. You may also obtain a hard copy of the  prospectus by calling 800-331-8936. The prospectus should be read carefully before you invest.

Mutual fund investing involves risk. Principal loss is possible. The Funds invest in smaller companies, which involve additional risks, such as limited liquidity and greater volatility. The Funds invest in microcap companies which tend to perform poorly during times of economic stress. The Ultra MicroCap Fund may invest in early-stage companies which tend to be more volatile and more speculative than investments in more established companies. 

Past Performance does not guarantee future results.

The Perritt Funds are distributed by Quasar Distributors, LLC.

First published August 2023.

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