Radcom (RDCM) AI Stock Analysis

• Market Cap: $205.18M
• Dividend Yield: N/A
• Average Volume (3M): 66.09K
• Price to Earnings (P/E): 22.6
• Beta (1Y): 0.60
• Revenue Growth: 18.18%
• EPS Growth: 89.73%
• Country: US
• Employees: 307
• Sector: Communication Services
• Sector Strength: 92
• Industry: Telecommunications Services
• EPS (TTM): 0.25
• Shares Outstanding: 16,029,316
• 10 Day Avg. Volume: 60,168
• 30 Day Avg. Volume: 66,090
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.63
• Enterprise Value/Revenue: 2.03
• Enterprise Value/Gross Profit: 2.72
• Enterprise Value/Ebitda: 25.73
• 1Y Price Target: $18.00
• Price Target Upside: 38.36% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 76 Outperform
• Price Target: ―

Radcom's overall stock score reflects its strong financial performance, with robust revenue growth and improved profitability. The technical analysis indicates potential short-term challenges, but the company's strategic initiatives and partnerships offer promising growth opportunities. Valuation appears reasonable given the earnings growth potential, though the lack of dividends may deter some investors. Overall, Radcom is well-positioned for continued success, provided it can address cash flow management.

Positive Factors

Financial Performance

RDCM reported another strong quarter, beating consensus Revenue/EPS by +3.6%/$0.02.

Strategic Partnerships

New RDCM integration with ServiceNow is opening access to a large telecom customer base.

Technological Advancements

Radcom's leading cloud-native assurance solution is well positioned as telecom operators upgrade their networks to 5G and look to replace legacy, on-premises assurance systems in favor of cloud.

Negative Factors

Competitive Environment

Competitors pulling away from telco gives Radcom an edge, but also highlights the challenges in the competitive landscape.

Market Volatility

The lumpiness of deals could create some level of volatility on a quarterly basis.

Radcom Business Overview & Revenue Model

Company Description

RADCOM 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 Money

Radcom 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 demonstrates solid financial health with strong revenue growth and improving profitability margins. The balance sheet is sturdy with low leverage and increasing equity, although recent cash flow performance indicates a need for improved cash management strategies. Overall, the company is well-positioned but must address cash flow challenges to sustain growth.

Income Statement

Radcom has shown strong revenue growth over the years, with a significant increase from $33.01M in 2019 to $61.01M in 2024. The gross profit margin improved to 74.2% in 2024 from 69.9% in 2019, indicating effective cost management. Net profit margin also turned positive, reaching 11.42% in 2024, showcasing improved profitability. EBIT and EBITDA margins have turned positive, further signifying enhanced operational efficiency.

Balance Sheet

The company's balance sheet is robust with a low debt-to-equity ratio of 0.04 in 2024, indicating low financial leverage. The equity ratio stands at 73.3%, reflecting a strong capital structure. Return on equity improved significantly to 7.28% in 2024, showing better utilization of equity to generate profits. The steady increase in stockholders' equity over the years adds to financial stability.

Cash Flow

Radcom's cash flow statement shows some volatility with free cash flow falling to zero in 2024 after positive figures in previous years. Operating cash flow was also zero in 2024, a decline from $4.71M in 2023. Despite past positive free cash flow growth, the recent decline suggests challenges in cash generation that need attention.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	61.01M	51.60M	46.05M	40.28M	37.56M
Gross Profit	45.26M	37.83M	33.34M	28.86M	26.80M
EBITDA	3.71M	16.00K	-3.64M	-4.95M	-3.88M
Net Income	6.97M	3.71M	-2.26M	-5.26M	-3.99M
Balance Sheet
Total Assets	130.57M	107.53M	101.00M	91.66M	93.64M
Cash, Cash Equivalents and Short-Term Investments	94.67M	82.17M	77.66M	70.57M	68.96M
Total Debt	3.40M	1.62M	2.48M	1.94M	3.04M
Total Liabilities	34.90M	25.04M	28.22M	21.51M	21.62M
Stockholders Equity	95.68M	82.49M	72.78M	70.15M	72.02M
Cash Flow
Free Cash Flow	10.96M	4.47M	5.87M	1.56M	-477.00K
Operating Cash Flow	11.39M	4.71M	6.02M	2.00M	-50.00K
Investing Cash Flow	-2.74M	-3.59M	-8.43M	-3.50M	7.60M
Financing Cash Flow	0.00	0.00	0.00	0.00	0.00

Radcom Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 13.01
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 13.01 is below the 20-day moving average (MA) of 13.50, below the 50-day MA of 13.24, and above the 200-day MA of 12.42, indicating a neutral trend. The MACD of -0.11 indicates Positive momentum. The RSI at 46.63 is Neutral, neither overbought nor oversold. The STOCH value of 34.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RDCM.

Radcom Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RDCM	76 Outperform	$205.18M	22.57	9.74%	―	18.18%	89.73%
SNRE	68 Neutral	$144.75M	―		6.99%	―	―
SIFY	63 Neutral	$612.08M	―	-5.17%	―	10.20%	―
Sector *	60 Neutral	$44.04B	1.92	-11.93%	4.00%	2.47%	-38.33%
RBBN	59 Neutral	$699.47M	―	-11.45%	―	7.68%	18.65%
ATNI	48 Neutral	$231.61M	―	-9.15%	6.55%	-5.33%	-334.05%
KORE	43 Neutral	$41.70M	―	174.77%	―	0.24%	68.22%