Crexendo (CXDO) AI Stock Analysis

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Crexendo

(NASDAQ:CXDO)

Rating:73Outperform

Price Target:

$7.00

▲(8.86%Upside)

Crexendo's overall stock score is supported by strong financial performance and positive earnings call outcomes, which highlight substantial growth and strategic initiatives. Technical analysis indicates potential overbought conditions, and valuation suggests the stock is currently high-priced. Despite some challenges, the company's strong foundation and optimistic guidance contribute significantly to its score.

Positive Factors

Financial Performance

Crexendo's NetSapiens software solutions business grew 32% in the quarter and 30% for the year, powering the company's beat for both revenue and EPS.

International Growth

International growth is becoming significant, with Crexendo's software solutions segment seeing success in Europe and Australia, growing 39% and now representing 5% of total revenue.

Market Position

Crexendo is well positioned for ongoing market share gains in the wholesale UCaaS market.

Negative Factors

Crexendo (CXDO) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$187.54M

Dividend YieldN/A

Average Volume (3M)263.69K

Price to Earnings (P/E)79.9

Beta (1Y)1.60

Revenue Growth13.85%

EPS Growth38.33%

CountryUS

Employees179

SectorCommunication Services

Sector Strength84

IndustryTelecommunications Services

Share Statistics

EPS (TTM)0.08

Shares Outstanding29,030,542

10 Day Avg. Volume392,716

30 Day Avg. Volume263,688

Financial Highlights & Ratios

PEG Ratio>-0.01

Price to Book (P/B)1.05

Price to Sales (P/S)0.00

P/FCF Ratio-62.26

Enterprise Value/Market Cap0.23

Enterprise Value/Revenue0.18

Enterprise Value/Gross Profit1.10

Enterprise Value/Ebitda2.33

Forecast

1Y Price Target

$7.90

Price Target Upside22.86% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering5

Crexendo Business Overview & Revenue Model

Company DescriptionCrexendo, Inc. (CXDO) is a telecommunications company that specializes in providing cloud-based unified communications services. The company offers a comprehensive suite of solutions including hosted voice, video conferencing, collaboration, and contact center services. Crexendo primarily serves small and medium-sized businesses, enabling them to improve communication efficiency and reduce traditional telecommunication costs.

How the Company Makes MoneyCrexendo generates revenue through its subscription-based model for cloud communication services. The company charges customers recurring fees for access to its hosted VoIP (Voice over Internet Protocol) services, which include a variety of features such as call management, mobility, and conferencing. Crexendo also offers additional services such as equipment sales, installation, and customer support, which contribute to its revenue. Key partnerships with telecommunications providers and technology companies enhance its service offerings and expand its customer base, further driving earnings growth.

Crexendo Earnings Call Summary

Earnings Call Date:May 06, 2025

(Q1-2025)

% Change Since: 20.19%|

Next Earnings Date:Aug 12, 2025

Earnings Call Sentiment Positive

Crexendo demonstrated strong revenue growth, user expansion, and improved profitability, particularly in the software solutions segment. However, the decline in product revenue and challenges in the telecom segment indicate areas that need attention. Despite these issues, the company's overall performance and strategic initiatives provide a positive outlook.

Q1-2025 Updates

Positive Updates

Revenue Growth

Crexendo's total revenue grew by 12% year-over-year to $16.1 million, with a 33% increase in software solutions revenue.

User Milestone

The software solutions platform surpassed 6 million users during the quarter.

Gross Margin Improvement

Software solutions gross margins increased by 500 basis points to 78% compared to Q1 2024 and 1,000 basis points higher than Q4 2024.

Profitability

Reported strong GAAP net income of $1.2 million and non-GAAP net income of $2.6 million, with adjusted EBITDA of $2.6 million.

Industry Recognition

Crexendo received multiple awards including the 2025 Product of the Year and the Hosted VoIP Excellence Award from Internet Telephony Magazine.

Partnership and Ecosystem Growth

Crexendo's ecosystem vendor partner program is gaining traction, setting the stage for significant revenue in the future.

Negative Updates

Decline in Product Revenue

Product revenue declined by 22% to $1.1 million compared to $1.3 million in the first quarter of the prior year.

Challenges in Telecom Segment

Telecom services retail segment grew only by 1% organically due to proactive reduction in selling lower margin opportunities.

Gross Margin Decline in Service Revenue

Service revenue gross margin decreased by 3% quarter over quarter to 57%.

Company Guidance

During Crexendo's Q1 2025 earnings call, the company provided robust guidance, highlighting a year-over-year revenue growth of 12% to $16.1 million, driven by a 33% increase in software solutions revenue to $6.9 million. The software segment saw gross margins rise by 500 basis points to 78% compared to Q1 2024. Crexendo achieved a GAAP net income of $1.2 million and non-GAAP net income of $2.6 million, both significantly higher than the previous year. The company's adjusted EBITDA stood at $2.6 million. The call emphasized the strategic focus on sustainable growth and profitability, particularly in the competitive UCaaS market, and highlighted significant milestones such as surpassing 6 million software platform users. Guidance for future quarters remains optimistic, with a commitment to double-digit revenue growth, bolstered by strategic investments and market opportunities arising from industry disruptions.

Crexendo Financial Statement Overview

Summary

Crexendo exhibits strong financial health with impressive revenue growth and profitability improvements. A strong balance sheet and robust cash flow generation highlight its financial stability, though there is room for enhancing operational efficiency.

Income Statement

Very Positive

Crexendo has demonstrated strong revenue growth, with a 14.37% increase from 2023 to 2024. The gross profit margin improved to 78.49% in 2024, indicating efficient cost management. The net profit margin improved significantly from negative in 2023 to 2.76% in 2024. However, the EBIT margin, while positive at 3.00%, remains modest, suggesting room for operational efficiency improvements.

Balance Sheet

Positive

The company's balance sheet is strong with a low debt-to-equity ratio of 0.04, reflecting minimal leverage. The return on equity improved to 3.26% in 2024, showing better profitability. The equity ratio is robust at 79.17%, indicating a strong capital structure. However, the lower total assets compared to 2021 indicate a potential area of concern for asset growth.

Cash Flow

Very Positive

Crexendo's cash flow is robust, with a significant increase in free cash flow from 2023 to 2024, growing by 83.66%. The operating cash flow to net income ratio is healthy at 3.75, highlighting strong cash generation relative to income. The free cash flow to net income ratio is high at 3.73, indicating efficient cash utilization. These metrics suggest strong liquidity and cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	62.61M	60.84M	53.20M	37.55M	28.09M	16.39M
Gross Profit	38.54M	47.75M	31.64M	23.87M	17.43M	11.44M
EBITDA	5.94M	1.82M	3.42M	-33.37M	-1.20M	1.25M
Net Income	2.41M	1.68M	-362.00K	-35.41M	-2.44M	7.94M
Balance Sheet
Total Assets	67.45M	64.94M	56.16M	55.63M	77.15M	30.70M
Cash, Cash Equivalents and Short-Term Investments	21.21M	18.19M	10.35M	5.47M	7.47M	17.58M
Total Debt	1.85M	2.12M	2.19M	4.42M	2.79M	2.03M
Total Liabilities	12.23M	13.53M	11.55M	14.18M	11.22M	4.94M
Stockholders Equity	55.22M	51.41M	44.61M	41.46M	65.93M	25.76M
Cash Flow
Free Cash Flow	7.66M	6.26M	3.41M	-700.00K	-10.87M	-274.00K
Operating Cash Flow	7.69M	6.28M	3.50M	-411.00K	-1.01M	647.00K
Investing Cash Flow	-27.00K	-27.00K	3.70M	-1.70M	-9.87M	-921.00K
Financing Cash Flow	2.50M	1.59M	-2.31M	-54.00K	650.00K	13.67M

Crexendo Technical Analysis

Technical Analysis Sentiment

Positive

Last Price6.43

Price Trends

50DMA

5.51

Positive

100DMA

5.54

Positive

200DMA

5.42

Positive

Market Momentum

MACD

0.23

Negative

RSI

70.77

Negative

STOCH

92.88

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CXDO, the sentiment is Positive. The current price of 6.43 is above the 20-day moving average (MA) of 5.70, above the 50-day MA of 5.51, and above the 200-day MA of 5.42, indicating a bullish trend. The MACD of 0.23 indicates Negative momentum. The RSI at 70.77 is Negative, neither overbought nor oversold. The STOCH value of 92.88 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CXDO.

Crexendo Risk Analysis

Crexendo disclosed 50 risk factors in its most recent earnings report. Crexendo 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

Crexendo Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RDCM	76 Outperform	$220.56M	26.07	9.35%	―	18.23%	81.31%
CXDO	73 Outperform	$187.54M	79.85	4.73%	―	13.85%	38.33%
SNRE	69 Neutral	$145.94M	―		7.01%	―	―
Sector *	61 Neutral	$41.24B	-0.79	-14.21%	3.80%	2.39%	-73.52%
SIFY	56 Neutral	$344.75M	―	-5.17%	―	9.62%	―
FNGR	47 Neutral	$119.77M	―	-39.70%	―	-0.51%	-34.03%
KORE	47 Neutral	$39.47M	―	174.77%	―	-1.52%	22.36%

* Communication Services Sector Average

Performance Comparison

CXDO

Crexendo

6.43

3.38

110.82%

RDCM

Radcom

13.76

4.54

49.24%

SIFY

Sify Technologies

4.76

2.17

83.78%

FNGR

FingerMotion

2.08

0.10

5.05%

KORE

KORE Group Holdings

2.30

0.93

67.88%

SNRE

Sunrise Communications AG Unsponsored ADR Class A

56.18

13.36

31.20%

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.Date of analysis: Jul 02, 2025