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Radcom Ltd (RDCM)
NASDAQ:RDCM
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Radcom
(NASDAQ:RDCM)
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Rating:76Outperform
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
Revenue Growth
Radcom's significant revenue growth reflects strong market demand for its solutions, indicating robust business expansion and increased market penetration, which is crucial for sustaining long-term growth.
Strategic Partnerships
The partnership with ServiceNow enhances Radcom's product offerings and market reach, fostering innovation and competitive advantage in network intelligence solutions, crucial for long-term success.
Balance Sheet Health
A strong balance sheet with low leverage provides Radcom with financial stability and flexibility to invest in growth opportunities, ensuring resilience against economic fluctuations.
Negative Factors
Cash Flow Challenges
The decline in free cash flow suggests potential challenges in cash generation, which could impact Radcom's ability to fund operations and growth initiatives without external financing.
Higher Operating Expenses
Rising operating expenses may pressure profit margins and require careful management to ensure that increased spending translates into proportional revenue growth.
Steady Net Income
Despite revenue growth, stagnant net income indicates potential inefficiencies or cost pressures that could hinder profitability improvements, requiring strategic adjustments.
Radcom (RDCM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$207.42M
Dividend YieldN/A
Average Volume (3M)47.56K
Price to Earnings (P/E)20.4
Beta (1Y)0.74
Revenue Growth17.27%
EPS Growth39.41%
CountryUS
Employees307
SectorCommunication Services
Sector Strength97
IndustryTelecommunications Services
Share Statistics
EPS (TTM)0.29
Shares Outstanding16,029,316
10 Day Avg. Volume53,982
30 Day Avg. Volume47,559
Financial Highlights & Ratios
PEG Ratio0.40
Price to Book (P/B)2.09
Price to Sales (P/S)3.28
P/FCF Ratio18.27
Enterprise Value/Market Cap0.68
Enterprise Value/Revenue2.06
Enterprise Value/Gross Profit2.73
Enterprise Value/Ebitda16.70
Forecast
1Y Price Target
$18.00Price Target Upside39.10% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)0.96
Revenue Forecast (FY)$70.63M
Radcom Business Overview & Revenue Model
Company DescriptionRadcom Ltd. (RDCM) is a technology company that specializes in providing network intelligence solutions for telecommunications operators. The company develops, manufactures, and markets innovative software solutions that enable telecom operators to monitor and optimize their networks. Radcom's core products include performance management and service assurance solutions designed to ensure high-quality service delivery across complex network environments, including 5G, LTE, and VoLTE.
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 Earnings Call Summary
Earnings Call Date:Nov 12, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 18, 2026
Earnings Call Sentiment Positive
RADCOM reported a strong financial performance with record revenues and growth, a solid cash position, and innovative product launches. Strategic partnerships were deepened, although revenue from these collaborations is expected in 2026. The company is poised to benefit from favorable market trends in AI and 5G, despite rising expenses.Q3-2025 Updates
Positive Updates
Record Revenue and Growth
RADCOM achieved record revenue of $18.4 million in Q3 2025, representing a 16.2% year-over-year growth. The company also reported record non-GAAP operating income of $3.8 million, which is 20.9% of the revenue.
Strong Financial Position
RADCOM generated a positive cash flow of $5.1 million and ended the quarter with a cash balance of $106.7 million and no debt, positioning the company well for continued investment and strategic flexibility.
Innovative Product Launches
RADCOM launched a next-generation high-capacity user analytics solution powered by NVIDIA BlueField-3 DPUs, capable of capturing speeds up to 400 gigabytes per second on a single server. This solution demonstrated a reduction of up to 75% in operational costs in field trials.
Strategic Partnerships and Expansions
The company deepened its strategic partnerships with NVIDIA and ServiceNow and completed the integration of RADCOM AIM with ServiceNow's platform. RADCOM also announced a new partnership with 1Global, enhancing customer experiences across multiple regions.
Industry Recognition
RADCOM's Argentic AI solution, RADCOM Predictive Complaint Resolution, was honored with the Best AI/ML Innovation Award at the Global Connectivity Award in London.
Negative Updates
Rising Expenses
Sales and marketing expenses increased by 15.4% year-over-year, and non-GAAP gross R&D expenses rose by 11.6%, reflecting the company's investment to grow its sales presence and drive innovation.
Delayed Revenue from Partnerships
While strategic partnerships with NVIDIA and ServiceNow were strengthened, the company anticipates initial revenue contributions from these partnerships in 2026, indicating a delay in monetizing these collaborations.
Company Guidance
During the third quarter of 2025, RADCOM Limited reported record revenue of $18.4 million, marking a 16.2% year-over-year growth. The company achieved a record non-GAAP operating income of $3.8 million, representing 20.9% of revenue, and generated a positive cash flow of $5.1 million, ending the quarter with a cash balance of $106.7 million and no debt. The gross margin was slightly over 77%, reflecting a favorable revenue mix. RADCOM also continued to expand its strategic partnerships with companies like NVIDIA and ServiceNow and launched a new high-capacity user analytics solution, which demonstrated a 75% reduction in operational costs in field trials. Looking ahead, RADCOM anticipates a full-year revenue growth of 15% to 18% for 2025 and plans to provide 2026 guidance with the release of their fourth-quarter results.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.85
Very Positive
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.78
Positive
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.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 68.90M | 61.01M | 51.60M | 46.05M | 40.28M | 37.56M |
| Gross Profit | 51.94M | 45.26M | 37.83M | 33.34M | 28.86M | 26.80M |
| EBITDA | 8.50M | 3.77M | 16.00K | -3.64M | -4.95M | -3.88M |
| Net Income | 10.60M | 6.97M | 3.71M | -2.26M | -5.26M | -3.99M |
Balance Sheet | ||||||
| Total Assets | 139.15M | 130.57M | 107.53M | 101.00M | 91.66M | 93.64M |
| Cash, Cash Equivalents and Short-Term Investments | 106.69M | 94.67M | 82.17M | 73.66M | 70.57M | 68.96M |
| Total Debt | 3.39M | 3.40M | 1.62M | 2.48M | 1.94M | 3.04M |
| Total Liabilities | 30.21M | 34.90M | 25.04M | 28.22M | 21.51M | 21.62M |
| Stockholders Equity | 108.94M | 95.68M | 82.49M | 72.78M | 70.15M | 72.02M |
Cash Flow | ||||||
| Free Cash Flow | 0.00 | 10.96M | 4.47M | 5.87M | 1.56M | -477.00K |
| Operating Cash Flow | 0.00 | 11.39M | 4.71M | 6.02M | 2.00M | -50.00K |
| Investing Cash Flow | 0.00 | -2.74M | -3.59M | -8.43M | -3.50M | 7.60M |
| Financing Cash Flow | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Radcom Technical Analysis
Positive
12.94
Price Trends
13.56
Negative
13.55
Negative
12.93
Positive
Market Momentum
-0.21
Negative
47.92
Neutral
67.39
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RDCM, the sentiment is Positive. The current price of 12.94 is above the 20-day moving average (MA) of 12.84, below the 50-day MA of 13.56, and above the 200-day MA of 12.93, indicating a neutral trend. The MACD of -0.21 indicates Negative momentum. The RSI at 47.92 is Neutral, neither overbought nor oversold. The STOCH value of 67.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $207.42M | 20.45 | 10.54% | ― | 17.27% | 39.41% | |
75 Outperform | $205.28M | 47.41 | 7.87% | ― | 12.91% | 222.63% | |
63 Neutral | $326.51M | ― | -1.70% | 4.75% | -3.10% | 66.00% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
50 Neutral | $559.82M | -12.94 | -11.40% | ― | 7.38% | 20.81% | |
48 Neutral | $591.25M | ― | -4.41% | 1.02% | 11.59% | -106.83% | |
46 Neutral | $303.05M | ― | -1.78% | ― | 5.42% | 69.88% |
* Communication Services Sector Average
RDCM
Radcom
12.82
0.93
7.82%
ATNI
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21.68
2.97
15.87%
CXDO
Crexendo
6.69
1.21
22.08%
SHEN
Shenandoah Telecommunications Co
10.79
-2.59
-19.36%
RBBN
Ribbon Communications
2.82
-1.10
-28.06%
OOMA
Ooma
11.01
-3.91
-26.21%
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.