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Radcom Ltd (RDCM)
NASDAQ:RDCM
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Radcom
(NASDAQ:RDCM)
69Neutral
Positive Factors
Financial Performance
Radcom reported a record fourth quarter, with revenue up 16%, to $16.3 million, above consensus expectations of 10%.
Revenue Growth
Radcom’s full-year revenue guidance for 2025 of $68.3 million-$70.2 million, reflecting over 13% growth, was roughly $2 million ahead of consensus at the midpoint.
Strategic Partnerships
New CEO Benny Eppstein signed a new partnership with ServiceNow, leveraging RDCM's software to improve SP network engineers' efficiency.
Negative Factors
Market Competition
Radcom will broaden its sales strategy and go-to-market to increase its focus on midtier operators, particularly in the European market.
Revenue Guidance
Radcom is guiding to 12%-15% Revenue Growth, above the analyst's 12% estimate.
Radcom (RDCM) vs. S&P 500 (SPY)
Market Cap
$189.15M
Dividend YieldN/A
Average Volume (3M)66.38K
Price to Earnings (P/E)27.5
Beta (1Y)0.28
Revenue Growth18.23%
EPS Growth81.31%
CountryUS
Employees307
SectorCommunication Services
Sector Strength76
IndustryTelecommunications Services
Share Statistics
EPS (TTM)0.43
Shares Outstanding16,029,316
10 Day Avg. Volume30,317
30 Day Avg. Volume66,379
Financial Highlights & Ratios
PEG Ratio0.34
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
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
$17.00Price Target Upside44.07% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Radcom Business Overview & Revenue Model
Company DescriptionRADCOM Ltd. provides 5G ready cloud-native network intelligence and service assurance solutions for telecom operators or communication service providers (CSPs). It offers RADCOM ACE, including RADCOM Service Assurance, a cloud-native, 5G-ready, and virtualized service assurance solutions, which allows telecom operators to gain end-to-end network visibility and customer experience insights across all networks; RADCOM Network Visibility, a cloud-native network packet broker and filtering solution that allows CSPs to manage network traffic at scale across multiple cloud environments, and control the visibility layer to perform analysis of select datasets; and RADCOM Network Insights, a business intelligence solution that offers insights for multiple use cases enabled by data captured and correlated through RADCOM Network Visibility and RADCOM Service Assurance. The company also provides solutions for mobile and fixed networks, such as 5G, long term evolution, voice over LTE, voice over Wifi, IP multimedia subsystem, voice over IP, and universal mobile telecommunication service. It sells its products directly, as well as through a network of distributors and resellers in North America, Asia, Latin America, Europe, the Middle East, and Africa. The company was formerly known as Big Blue Catalogue Ltd. and changed its name to RADCOM Ltd. in 1989. RADCOM Ltd. was incorporated in 1985 and is headquartered in Tel Aviv, Israel.
How the Company Makes MoneyRadcom makes money primarily through the sale of its software solutions and related services to telecommunications operators. The company's revenue model is based on software licensing, where telecom operators pay for the right to use Radcom's network intelligence solutions. Additionally, Radcom offers maintenance and support services, which provide a recurring revenue stream. The company may also engage in strategic partnerships and collaborations with major telecom companies, enhancing its market reach and customer base. These partnerships often contribute significantly to its earnings, especially as global demand for advanced network monitoring solutions continues to grow with the rollout of new technologies like 5G.
Radcom Financial Statement Overview
Summary
Radcom has demonstrated strong revenue growth and improved profitability, with a solid balance sheet characterized by low leverage and strong liquidity. However, challenges remain in sustaining operating profits, as evidenced by negative EBIT margins. Cash flows are stable, though the recent decline in free cash flow growth warrants attention.Income Statement
Radcom has demonstrated consistent revenue growth, increasing from $33.01M in 2019 to $51.6M in 2023, indicating a strong growth trajectory. The gross profit margin improved significantly, reaching 73.3% in 2023 from 69.9% in 2019. However, the company has struggled with profitability at the operating level, with negative EBIT margins throughout the years, although net income turned positive in 2023, reflecting improved cost management.75
Positive
Balance Sheet
The balance sheet is solid, with a strong equity base and low leverage. The debt-to-equity ratio stands at a low 0.02, indicating minimal reliance on debt. The equity ratio is robust at 76.7%, reflecting financial stability. The company's cash position is strong, with cash and equivalents exceeding total debt, providing a comfortable liquidity cushion.80
Positive
Cash Flow
Radcom has shown positive operating cash flow consistently, with $4.71M in 2023. The free cash flow growth rate was negative in 2023 due to a decline in operating cash flow compared to 2022. However, the company maintains a healthy operating cash flow to net income ratio of 1.27, indicating efficient cash conversion.70
Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 56.13M | 51.60M | 46.05M | 40.28M | 37.56M | 33.01M | Gross Profit |
| 41.58M | 37.83M | 33.34M | 28.86M | 26.80M | 23.09M | EBIT |
| 728.00K | -662.00K | -4.11M | -5.49M | -4.58M | -7.83M | EBITDA |
| 1.18M | 16.00K | -3.64M | -4.95M | -3.88M | -7.08M | Net Income Common Stockholders |
| 4.78M | 3.71M | -2.26M | -5.26M | -3.99M | -6.83M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 61.99M | 82.17M | 77.66M | 70.57M | 68.96M | 69.28M | Total Assets |
| 89.53M | 107.53M | 101.00M | 91.66M | 93.64M | 96.40M | Total Debt |
| 0.00 | 1.62M | 2.48M | 1.94M | 3.04M | 6.23M | Net Debt |
| -61.99M | -9.27M | -7.05M | -10.01M | -10.51M | 29.00K | Total Liabilities |
| 11.05M | 25.04M | 28.22M | 21.51M | 21.62M | 22.53M | Stockholders Equity |
| 78.48M | 82.49M | 72.78M | 70.15M | 72.02M | 73.87M |
| Cash Flow | Free Cash Flow | ||||
| 2.54M | 4.47M | 5.87M | 1.56M | -477.00K | 6.14M | Operating Cash Flow |
| 2.54M | 4.71M | 6.02M | 2.00M | -50.00K | 6.84M | Investing Cash Flow |
| 0.00 | -3.59M | -8.43M | -3.50M | 7.60M | -62.62M | Financing Cash Flow |
| 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 16.00K |
Radcom Technical Analysis
Negative
11.80
Price Trends
12.85
Negative
12.31
Negative
11.07
Positive
Market Momentum
-0.12
Negative
43.92
Neutral
33.82
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RDCM, the sentiment is Negative. The current price of 11.8 is below the 20-day moving average (MA) of 11.97, below the 50-day MA of 12.85, and above the 200-day MA of 11.07, indicating a neutral trend. The MACD of -0.12 indicates Negative momentum. The RSI at 43.92 is Neutral, neither overbought nor oversold. The STOCH value of 33.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RDCM.
Radcom Risk Analysis
Radcom disclosed 45 risk factors in its most recent earnings report. Radcom 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
Radcom Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $189.15M | 27.47 | 7.82% | ― | 18.23% | 81.31% | |
61 Neutral | $2.50B | ― | -5.53% | ― | -0.67% | -856.71% | |
60 Neutral | $2.34B | ― | -3.97% | ― | -20.02% | -193.84% | |
59 Neutral | $27.96B | 0.79 | -25.77% | 4.12% | 2.19% | -45.44% | |
51 Neutral | $1.16B | ― | 17.08% | ― | -28.32% | 73.59% | |
45 Neutral | $710.75M | ― | -123.20% | ― | -19.70% | -70.40% | |
40 Underperform | $13.10M | ― | -69.62% | ― | -45.61% | -5957.43% |
* Communication Services Sector Average
Performance Comparison
RDCM
Radcom
11.80
0.65
5.83%
ADTN
Adtran
8.90
3.40
61.82%
CALX
Calix
35.04
2.61
8.05%
COMM
CommScope Holding
5.37
4.05
306.82%
VIAV
Viavi Solutions
11.26
2.35
26.37%
SONM
Sonim Technologies
2.23
-3.49
-61.01%
Radcom Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: -19.84% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
RADCOM reported a strong year with record-breaking revenue growth and several key contract wins, enhanced by strategic partnerships and industry recognition. Despite increased operating expenses and a steady net income in Q4, the overall financial health and strategic advancements are positive indicators for future growth.Highlights
Record-Breaking Revenue and Growth
2024 was a record-breaking year for RADCOM with full-year revenue of $61 million, marking an 82% increase from 2023. Earnings per share surged by over 75% on a GAAP basis, and the company achieved the highest cash and short-term deposit balances in its history at $94.7 million, while remaining completely debt-free.
Significant Contract Wins
RADCOM secured a new multi-year contract with Norlys, the owner of Telia Denmark, replacing an incumbent assurance vendor. The company's integration with ServiceNow has helped secure a seven-figure, multi-year deal with a leading North American operator for RADCOM’s enhanced mobility experience analytics solution.
High Industry Recognition
RADCOM was named the winner of the Fierce Network Innovation Awards for Best Network Test and Measurement Solution, showcasing the company's innovative approach and contributions to improving customer experience.
Strong Financial Performance
Operating income grew by 65.9% in 2024. The company generated a positive cash flow of $12.5 million, ending the year with its highest cash balance. Gross margin for 2024 was 75%.
Strategic Partnerships and Expansion
RADCOM is collaborating with ServiceNow to integrate AI-driven solutions to enhance customer satisfaction and network efficiencies, and plans to expand its product offerings to mid-tier operators.
Lowlights
Higher Operating Expenses
Sales and marketing expenses increased to $15.7 million in 2024 from $12.7 million in 2023. G&A expenses also rose to $4.8 million, an increase of $929,000 over the previous year.
Decrease in R&D Grants and Higher Tax Expenses
Grants from the Israel Innovation Authority decreased, with no clear visibility for future grants. Higher tax expenses were reported due to the use of accumulated losses.
Steady Net Income Despite Increased Revenue
Despite record revenue and growth, net income for the fourth quarter of 2024 was steady at $3.8 million, unchanged from the same period in 2023 due to low interest rates and higher tax expenses.
Company Guidance
During the RADCOM Limited Fourth Quarter 2024 Results Conference Call held on February 20, 2025, management provided guidance for the upcoming year, emphasizing a strong growth trajectory. The company reported a record-breaking year in 2024, surpassing the midpoint of their revenue guidance and achieving five consecutive years of revenue growth. Earnings per share increased by over 75% on a GAAP basis, with a record cash balance of $94.7 million while remaining debt-free. RADCOM secured a new multi-year contract with Norlys, reinforcing its position as a trusted partner for telecom operators and highlighting the value of its GenAI-enhanced intelligent assurance solutions. For 2025, RADCOM anticipates a revenue growth of 12% to 15%, with a midpoint of $69.2 million, representing a 13.5% increase over 2024. The company plans to continue investing in R&D to enhance its 5G assurance and network intelligence leadership while expanding its collaborations with key strategic operators and partners like ServiceNow.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.