Ceragon Networks (CRNT) AI Stock Analysis

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Ceragon Networks

(NASDAQ:CRNT)

65Neutral

Ceragon Networks shows strengths in revenue growth and profitability, with a solid financial performance. However, technical indicators suggest bearish trends, and cash flow concerns remain. Valuation is attractive, but low visibility for 2025 poses a risk.

Positive Factors

Market Expansion

There is success in the Indian market for the company.

Mergers and Acquisitions

The recent Siklu acquisition positions Ceragon for rapid growth with a portfolio of multi-gigabit solutions in the V-Band and E-band.

Product Development

CRNT is poised to benefit from new products and channel relationships beginning in 2H.

Negative Factors

Margin Pressure

Near-term gross margins have been adjusted down due to the strength in the lower margin India business.

Visibility Concerns

Management messaged some concern for reduced 1H25 visibility.

Ceragon Networks (CRNT) vs. S&P 500 (SPY)

Market Cap

$183.90M

Dividend YieldN/A

Average Volume (3M)1.06M

Price to Earnings (P/E)7.6

Beta (1Y)0.81

Revenue Growth13.54%

EPS Growth278.70%

CountryUS

Employees1,056

SectorTechnology

Sector Strength46

IndustryCommunication Equipment

Share Statistics

EPS (TTM)0.27

Shares Outstanding88,839,080

10 Day Avg. Volume817,096

30 Day Avg. Volume1,064,810

Financial Highlights & Ratios

PEG Ratio0.03

Price to Book (P/B)N/A

Price to Sales (P/S)0.62

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$5.33

Price Target Upside157.49% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering3

Ceragon Networks Business Overview & Revenue Model

Company DescriptionCeragon Networks Ltd. provides wireless backhaul and fronthaul solutions that enable cellular operators and other wireless service providers. Its solutions use microwave and millimeter wave radio technology to transfer telecommunication traffic between base stations, small/distributed cells, and the core of the service provider's network. The company also uses microwave technology for ultra-high speed, ultra-low latency communication for wireless 5G and 4G, 3G, and other cellular base stations. In addition, it provides IP-20 all-outdoor solutions, such as IP-20C, IP-20C-HP, IP-20S, IP-20E, and IP-20V; IP-20 split-mount/all-indoor solutions comprising IP-20N/IP-20A, IP-20F, and IP-20G; and IP-50 disaggregated solutions, including IP-50E, IP-50C, IP-50S, and IP-50FX for various short-haul, long-haul, fronthaul, and enterprise access applications. Further, the company offers network management system; and network and radio planning, site survey, solutions development, installation, network auditing and optimization, maintenance, training, and other services. It provides its services to oil and gas companies; public safety organizations; business and public institutions; broadcasters; energy utilities; and private communications networks. The company sells its products through direct sales, original equipment manufacturers, distributors, and system integrators. It operates in North America, Europe, Africa, the Asia Pacific, the Middle East, India, and Latin America. The company was formerly known as Giganet Ltd. and changed its name to Ceragon Networks Ltd. in September 2000. Ceragon Networks Ltd. was incorporated in 1996 and is headquartered in Rosh HaAyin, Israel.

How the Company Makes MoneyCeragon Networks generates revenue by selling its wireless backhaul solutions, which include both hardware and software components, to telecommunications service providers and other network operators. The company's key revenue streams include the sale of its high-capacity communication systems, maintenance and support services, and professional services such as network planning and optimization. Ceragon's earnings are influenced by its ability to maintain strong relationships with key telecommunications providers and adapt to the growing demand for high-speed mobile data services. Additionally, strategic partnerships and contracts with major mobile operators contribute significantly to its revenue.

Ceragon Networks Financial Statement Overview

Summary

Ceragon Networks has demonstrated strong revenue growth and improved profitability, with significant increases in revenue and net profit margin. However, the cash flow generation has weakened, indicating a need for strategic focus on boosting operational cash flow.

Income Statement

Positive

Ceragon Networks has demonstrated strong revenue growth, with a significant increase in total revenue from $347.2 million in 2023 to $394.2 million in 2024, marking a growth rate of approximately 13.5%. The gross profit margin improved to 34.7% in 2024, indicating efficient cost management. Net profit margin improved to 6.1%, showing enhanced profitability. However, EBIT and EBITDA margins were 9.8% and 13.7% respectively, indicating room for operational efficiency improvements.

Balance Sheet

Positive

The company's balance sheet shows a solid equity ratio of 48.2% in 2024, reflecting a stable capital structure. The debt-to-equity ratio has improved to 0.25, indicating better leverage management. Return on equity increased to 14.5%, highlighting improved profitability from equity. However, the company needs to maintain cautious debt management due to industry volatility.

Cash Flow

Positive

The free cash flow decreased from $17.99 million in 2023 to $11.62 million in 2024, indicating a decline in cash generation efficiency. The operating cash flow to net income ratio is 1.09, suggesting that operating cash flow aligns closely with net income. The free cash flow to net income ratio is 0.48, showing a moderate conversion of profit into cash. Focus on enhancing cash flow generation is needed.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
394.19M	347.18M	295.17M	290.77M	262.88M
	Gross Profit
136.85M	119.87M	93.06M	88.38M	75.64M
	EBIT
38.73M	21.21M	1.35M	4.81M	-7.57M
	EBITDA
53.91M	30.25M	-1.19M	13.33M	3.79M
	Net Income Common Stockholders
24.06M	6.22M	-7.40M	-14.83M	-16.11M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
35.31M	28.24M	22.95M	17.08M	27.10M
	Total Assets
345.00M	298.52M	301.61M	292.56M	272.42M
	Total Debt
41.11M	50.20M	54.43M	36.37M	13.00M
	Net Debt
5.80M	21.97M	31.48M	19.29M	-14.10M
	Total Liabilities
178.67M	164.51M	169.53M	155.41M	126.29M
	Stockholders Equity
166.32M	134.02M	132.07M	137.15M	146.13M
Cash Flow		Free Cash Flow
11.62M	17.99M	-17.32M	-24.61M	10.76M
	Operating Cash Flow
26.20M	30.89M	-4.89M	-15.02M	17.67M
	Investing Cash Flow
-16.46M	-20.87M	-12.42M	-9.39M	-6.92M
	Financing Cash Flow
-1.52M	-4.86M	23.11M	14.53M	-7.38M

Ceragon Networks Technical Analysis

Technical Analysis Sentiment

Negative

Last Price2.07

Price Trends

50DMA

2.59

Negative

100DMA

3.63

Negative

200DMA

3.18

Negative

Market Momentum

MACD

-0.18

Negative

RSI

36.12

Neutral

STOCH

27.50

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CRNT, the sentiment is Negative. The current price of 2.07 is below the 20-day moving average (MA) of 2.19, below the 50-day MA of 2.59, and below the 200-day MA of 3.18, indicating a bearish trend. The MACD of -0.18 indicates Negative momentum. The RSI at 36.12 is Neutral, neither overbought nor oversold. The STOCH value of 27.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CRNT.

Ceragon Networks Risk Analysis

Ceragon Networks disclosed 51 risk factors in its most recent earnings report. Ceragon Networks reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Ceragon Networks Peers Comparison

Overall Rating

UnderperformOutperform

Sector (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FEIM	76 Outperform	$172.63M	7.41	52.23%	5.61%	24.10%	603.04%
AUDC	66 Neutral	$273.94M	18.47	8.06%	3.90%	-0.90%	80.24%
CRNT	65 Neutral	$183.90M	7.61	16.02%	―	13.54%	278.70%
AVNW	63 Neutral	$222.22M	―	-1.40%	―	20.95%	-121.24%
Sector *	59 Neutral	$9.97B	10.09	-6.54%	3.08%	7.41%	-11.60%
INSG	48 Neutral	$104.29M	118.80	111.75%	―	5.41%	―

* Technology Sector Average

Performance Comparison

CRNT

Ceragon Networks

2.07

-0.64

-23.62%

AUDC

Audiocodes

9.40

-0.71

-7.02%

AVNW

Aviat Networks

17.02

-15.76

-48.08%

FEIM

Frequency Electronics

18.03

9.13

102.58%

INSG

Inseego

7.91

4.68

144.89%

FKWL

Franklin Wireless

4.82

1.88

63.95%

Ceragon Networks Earnings Call Summary

Earnings Call Date: Feb 11, 2025 | % Change Since: -56.88% | Next Earnings Date: May 5, 2025

Earnings Call Sentiment Positive

The earnings call reflects a strong financial year for Ceragon with record profits, significant growth in India, and successful product launches. However, challenges remain with low visibility for 2025 and fluctuation in gross margins.

Highlights

Record Year for Ceragon

Ceragon achieved record operating profit on the highest revenue levels since 2012, with a 13% annual revenue growth during 2024 despite a market decline of more than 10%.

Strong Performance in India

India's revenue reached $55.6 million, marking an all-time record quarter for Ceragon, driven by deployments in 4G and 5G networks and significant traction with the IP-50EXA product.

Increased Bookings from Private Networks

Ceragon reported over a 50% increase in bookings from private networks, enhancing their revenue diversification strategy.

Successful Product Launches

Introduction of IP-50CX and IP-50EX products, as well as the new Siklu By Ceragon product, strengthened Ceragon's technological lead and market position.

Positive Outlook on Managed Services

Secured additional recurring revenue from managed services worth approximately $7 million ARR, representing more than 30% of current ARR.

Lowlights

Low Visibility in 2025

Ceragon enters 2025 with low visibility, particularly affected by the cyclical nature of the CSP market and shifting dynamics in private networks.

Challenges with Gross Margin Fluctuations

Non-GAAP gross margin slightly decreased to 34.3% in Q4 2024 from 35.1% in Q4 2023, due to changes in regional revenue mix and volumes.

DSO Increase

Days Sales Outstanding increased to 126 days, reflecting business growth in India and impacting cash flow management.

Company Guidance

In the earnings conference call for Ceragon Networks, the company provided detailed guidance and performance metrics for both the past fiscal year and the upcoming period. For fiscal year 2024, Ceragon achieved a 13.5% increase in revenue, reaching $394.2 million, and a record non-GAAP operating profit of $48.8 million, representing 12.4% of revenues. The company noted significant growth in its annual recurring revenue (ARR) by more than 30% and a 50% increase in bookings from private networks. For 2025, Ceragon projects revenue between $390 million to $430 million and expects non-GAAP operating margins of at least 10%, while aiming to increase free cash flow compared to 2024. The company emphasized its strategic growth pillars, including expanding its millimeter-wave products, increasing market share in private networks, and boosting recurring revenue, which positions it to potentially outperform the market in the forthcoming year.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.