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Ceragon Networks (CRNT)
NASDAQ:CRNT
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Ceragon Networks
(NASDAQ:CRNT)
Rating:68Neutral
Price Target:
$2.50
▲(9.17%Upside)
Positive Factors
Financial Performance
CRNT reported solid F1Q25 results and reiterated its F25 guide, reporting strong bookings ahead of a meaningful 2H revenue ramp.
Market Expansion
An improving pipeline of SP opportunities and an increased TAM, including private networks, should position CRNT for sustained modest revenue growth.
Market Success
1Q strength again came from India (48% of revs), which was up +66% y/y.
Product Development
CRNT is poised to benefit from new products and channel relationships beginning in 2H.
Negative Factors
Management Concerns
Management remains somewhat cautious on 2Q, but key new products expected mid-year, including E-band for India, should drive a 2H loaded year and improved GMs.
Visibility Concerns
Management messaged some concern for reduced 1H25 visibility.
Ceragon Networks (CRNT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$203.44M
Dividend YieldN/A
Average Volume (3M)634.82K
Price to Earnings (P/E)8.9
Beta (1Y)0.99
Revenue Growth11.94%
EPS Growth377.86%
CountryUS
Employees1,056
SectorTechnology
Sector Strength83
IndustryCommunication Equipment
Share Statistics
EPS (TTM)0.03
Shares Outstanding88,839,080
10 Day Avg. Volume711,973
30 Day Avg. Volume634,818
Financial Highlights & Ratios
PEG Ratio0.42
Price to Book (P/B)1.22
Price to Sales (P/S)0.00
P/FCF Ratio-9.28
Enterprise Value/Market Cap0.78
Enterprise Value/Revenue0.10
Enterprise Value/Gross Profit1.19
Enterprise Value/Ebitda0.83
Forecast
1Y Price Target
$4.83Price Target Upside110.92% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
Ceragon Networks Business Overview & Revenue Model
Company DescriptionCeragon Networks Ltd. is a leading provider of high-capacity wireless backhaul solutions that enable cellular operators and other wireless service providers to improve operational efficiency and offer high-quality services. Operating in the telecommunications sector, Ceragon offers innovative solutions that support 4G, LTE, and other evolving network technologies. The company specializes in wireless hauling technologies that enhance network performance and expand mobile coverage, allowing seamless communication across diverse geographies.
How the Company Makes MoneyCeragon Networks generates revenue primarily through the sale of its wireless backhaul solutions, which include hardware, software, and professional services. The company's key revenue streams consist of product sales, where they provide both point-to-point and point-to-multipoint wireless connectivity solutions, and services revenue, which includes installation, support, and maintenance services. Ceragon's earnings are significantly influenced by its partnerships with leading telecommunications providers, enabling them to deploy their technology across various networks worldwide. The company's growth is also driven by the increasing demand for high-speed mobile internet and data services, as well as the global expansion of 4G and the rollout of 5G networks.
Ceragon Networks Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 1.33%|
Next Earnings Date:Aug 04, 2025
Earnings Call Sentiment Neutral
Ceragon Networks had a strong quarter with significant revenue growth and record bookings in key regions like India and North America. The successful acquisition of E2E Technologies and expansion into fast-growing segments were notable achievements. However, challenges included a decline in gross profit, increased operating expenses, and a weakened cash position due to acquisitions. Overall, the company is positioned well for growth, but must manage cost pressures and improve profitability.Q1-2025 Updates
Positive Updates
Record Bookings in India
India's revenue increased by 65% year-over-year to $42.9 million, with bookings reaching the highest levels since Q1 2024.
Strong Performance in North America
North America revenue increased from $13.4 million in Q4 2024 to $17.6 million in Q1 2025, indicating a rebound in the region.
Successful Acquisition of E2E Technologies
The acquisition strengthened expertise in Private Networks, particularly in energy and utilities in North America, with E2E's bookings outperforming expectations.
Improved Competitive Position
Ceragon is improving its competitive position with existing customers and getting more traction from new prospects in North America.
Expansion in Fast-Growing Segments
Enhanced capabilities in wireless connectivity segments, such as millimeter-wave and Private Network markets, through acquisitions.
Negative Updates
Decline in Gross Profit
Non-GAAP gross profit decreased by 8.6% from $32.5 million in Q1 2024 to $29.7 million in Q1 2025, with gross margin dropping from 36.7% to 33.5%.
Increased Operating Expenses
Sales and marketing expenses increased from $10.7 million in Q1 2024 to $11.8 million in Q1 2025, reflecting higher costs as a percentage of revenue.
Net Cash Position Weakened
Net cash position decreased from $10.1 million at the end of 2024 to $2.5 million at the end of Q1 2025, largely due to the acquisition of E2E.
Higher Restructuring Costs
Restructuring and related charges increased to $3.7 million in Q1 2025 from $1.4 million in Q1 2024, indicating higher efforts to achieve cost discipline.
Company Guidance
During Ceragon Networks' earnings call for the first fiscal quarter of 2025, the company provided guidance with several key metrics. The firm reported a revenue of $88.7 million for Q1 2025, a slight increase from $88.5 million in Q1 2024. The strongest revenue contribution came from India, at $42.9 million, marking a 65% year-over-year increase, while North America contributed $17.6 million. Non-GAAP gross profit was $29.7 million with a gross margin of 33.5%, down from 36.7% the previous year. Operating income on a non-GAAP basis was $4.5 million, a decrease from $7.6 million in Q1 2024, primarily due to lower gross profit. The company reiterated its full-year 2025 revenue guidance of $390 million to $430 million, with an expected non-GAAP operating margin of at least 10% at the low end of the guidance range. The call highlighted strategic initiatives, including the successful acquisition of E2E Technologies, expected to be accretive to non-GAAP earnings by the second half of 2025. Additionally, Ceragon is focusing on opportunities in the software-driven services and Private Networks segments to expand its addressable market and enhance margins.Ceragon Networks Financial Statement Overview
Summary
Ceragon Networks demonstrates strong financial health with significant improvements in profitability and revenue growth. The income statement reflects efficient operations and cost management with a TTM gross profit margin of 33.95% and net profit margin of 5.75%. The balance sheet suggests a stable financial position with a debt-to-equity ratio of 0.24 and return on equity of 13.58%. Cash flow performance shows some pressure but remains manageable with a free cash flow of $6.16M.Income Statement
Ceragon Networks has demonstrated a strong recovery in its income statement metrics. The TTM gross profit margin stands at 33.95%, reflecting efficient cost management. The net profit margin has improved significantly to 5.75%, indicating profitability growth. Revenue growth is consistent, with a notable increase from $262.88M in 2020 to $394.34M in TTM 2025, evidencing a robust upward trajectory. EBIT and EBITDA margins are also healthy at 8.71% and 13.02% respectively, showcasing operational efficiency.78
Positive
Balance Sheet
The balance sheet of Ceragon Networks shows a stable financial position with a debt-to-equity ratio of 0.24, suggesting conservative leverage. The return on equity is 13.58%, indicating effective use of equity capital. However, the equity ratio is 48.25%, showing a balanced asset financing between debt and equity. The company maintains adequate cash reserves, although total assets have seen moderate growth.72
Positive
Cash Flow
Cash flow analysis reveals moderate performance with a free cash flow of $6.16M in TTM 2025, a decrease from previous years. The operating cash flow to net income ratio is close to 1, suggesting that net income is well-backed by cash flows. However, the free cash flow to net income ratio is lower, indicating some pressure in converting profits into free cash flows. Despite fluctuations in capital expenditures, the company manages its cash flows carefully.65
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 394.34M | 394.19M | 347.18M | 295.17M | 290.77M | 262.88M | Gross Profit |
| 133.88M | 136.85M | 119.87M | 93.06M | 88.38M | 75.64M | EBIT |
| 34.33M | 38.73M | 21.21M | 1.35M | 4.81M | -7.57M | EBITDA |
| 51.33M | 45.34M | 30.25M | -1.19M | 13.33M | 3.79M | Net Income Common Stockholders |
| 22.68M | 24.06M | 6.22M | -7.40M | -14.83M | -16.11M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 27.69M | 35.31M | 28.24M | 22.95M | 17.08M | 27.10M | Total Assets |
| 346.18M | 345.00M | 298.52M | 301.61M | 292.56M | 272.42M | Total Debt |
| 40.77M | 41.11M | 50.20M | 54.43M | 36.37M | 13.00M | Net Debt |
| 13.08M | 5.80M | 21.97M | 31.48M | 19.29M | -14.10M | Total Liabilities |
| 179.17M | 178.67M | 164.51M | 169.53M | 155.41M | 126.29M | Stockholders Equity |
| 167.01M | 166.32M | 134.02M | 132.07M | 137.15M | 146.13M |
| Cash Flow | Free Cash Flow | ||||
| 6.16M | 9.73M | 17.99M | -17.32M | -24.61M | 10.76M | Operating Cash Flow |
| 22.19M | 26.20M | 30.89M | -4.89M | -15.02M | 17.67M | Investing Cash Flow |
| -23.34M | -16.46M | -20.87M | -12.42M | -9.39M | -6.92M | Financing Cash Flow |
| 828.00K | -1.52M | -4.86M | 23.11M | 14.53M | -7.38M |
Ceragon Networks Technical Analysis
Negative
2.29
Price Trends
2.27
Negative
2.70
Negative
3.09
Negative
Market Momentum
-0.01
Positive
43.78
Neutral
13.73
Positive
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 2.29 is below the 20-day moving average (MA) of 2.34, above the 50-day MA of 2.27, and below the 200-day MA of 3.09, indicating a bearish trend. The MACD of -0.01 indicates Positive momentum. The RSI at 43.78 is Neutral, neither overbought nor oversold. The STOCH value of 13.73 is Positive, 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 (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $211.04M | 9.06 | 52.23% | 4.59% | 24.10% | 603.04% | |
68 Neutral | $203.44M | 8.93 | 15.02% | ― | 11.94% | 377.86% | |
67 Neutral | $286.42M | ― | -1.32% | ― | 12.39% | -123.62% | |
62 Neutral | $280.47M | 16.76 | 9.33% | 3.81% | -1.13% | 61.49% | |
62 Neutral | $11.91B | 9.99 | -7.22% | 4.96% | 7.31% | -8.91% | |
49 Neutral | $114.81M | 22.65 | 111.75% | ― | 1.60% | ― |
* Technology Sector Average
Performance Comparison
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Ceragon Networks
2.25
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-9.27%
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21.81
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.