Array Digital Infrastructure, Inc. (AD) stock analysis

P/E below its 5-year median

Array Digital Infrastructure's P/E of 3.7 is below its own 5-year median of 24.6.

P/E below the industry

Array Digital Infrastructure's P/E of 3.7 is below the Telephone Communications median of 13.3.

EV/EBITDA below its 5-year median

Array Digital Infrastructure's EV/EBITDA of 4.7 is below its 5-year median of 6.4.

P/B above the industry

Array Digital Infrastructure's price-to-book of 1.80 is above the Telephone Communications median of 1.76.

Trading below fair value

The share price of $27.75 is below our fair value estimate of $95.85.

Margin of safety over 20%

The price is 71.0% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -66.1% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 17.0% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 3961% over the last twelve months, against a 5-year average of -26.6% a year.

Growing faster than the industry

Revenue grew 71.1% over the last twelve months; the Telephone Communications median is 5.5%.

Guidance issued

The latest outlook (2026 Estimated Results Total operating revenues, Aug 7, 2026) was issued for the first time, so it neither adds nor takes away points.

Gross margin improving

Gross margin was 58.6% over the last twelve months, against 40.3% a year earlier.

Return on equity under 15%

Return on equity was 33.3% over the last twelve months and averaged 1.2% over five years; we look for 15% on both.

Return on capital over 10%

Return on invested capital was 19.4%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Array Digital Infrastructure's return on equity of 33.3% is above the Telephone Communications median of 8.4%.

Earnings shrank over 5 years

Net income shrank 26.6% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 292% over the last twelve months, against a 5-year average of 10.1%.

Net margin above the industry

Array Digital Infrastructure's net margin of 292% is above the Telephone Communications median of 6.5%.

High debt

Debt is 50.4% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 56.5% five years ago to 50.4%.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals -58.9% of total debt; we look for at least 20%.

Interest well covered

Operating income covers interest expense 13.8 times.

Short-term assets cover short-term debts

Current assets are 1.11 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 1.23; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Array Digital Infrastructure paid dividends worth 76.6% of the share price over the last twelve months.

Yield above Treasuries

The 76.6% yield is above the 4.4% on a 1-year Treasury.

Yield in the top quarter

The top quarter of US dividend payers yield 3.8% or more; Array Digital Infrastructure yields 76.6%.

Dividend stability

Fewer than five years of dividend history.

Earnings cover

Needs dividends paid and net income.

Cash-flow cover

Needs dividends paid and free cash flow.