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Radcom Ltd (RDCM)
NASDAQ:RDCM
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Radcom
(NASDAQ:RDCM)
76Outperform
Positive Factors
Financial Performance
Radcom reported another strong quarter, beating consensus Revenue/EPS by +6%/$0.03.
Strategic Partnerships
New CEO Benny Eppstein signed a new partnership with ServiceNow, leveraging RDCM's software to improve SP network engineers' efficiency.
Negative Factors
Geographic Expansion Challenges
Radcom secured a multiyear contract with Norlys, the owner of Telia Denmark, marking progress from its investment into geographic market expansion.
Market Competition
Expansion into partnerships will play an increasing role in the GTM strategy, providing opportunities to tap into new customers.
Radcom (RDCM) vs. S&P 500 (SPY)
Market Cap
$191.87M
Dividend YieldN/A
Average Volume (3M)26.82K
Price to Earnings (P/E)27.9
Beta (1Y)0.39
Revenue Growth18.23%
EPS Growth81.31%
CountryUS
Employees307
SectorCommunication Services
Sector Strength83
IndustryTelecommunications Services
Share Statistics
EPS (TTM)0.43
Shares Outstanding16,029,316
10 Day Avg. Volume29,469
30 Day Avg. Volume26,823
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)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap0.59
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit2.52
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$17.00Price Target Upside42.02% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
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 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 | ||||
| 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 | EBIT |
| 3.09M | -662.00K | -4.11M | -5.49M | -4.58M | EBITDA |
| 3.71M | 16.00K | -3.64M | -4.95M | -3.88M | Net Income Common Stockholders |
| 6.97M | 3.71M | -2.26M | -5.26M | -3.99M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 94.67M | 82.17M | 77.66M | 70.57M | 68.96M | Total Assets |
| 130.57M | 107.53M | 101.00M | 91.66M | 93.64M | Total Debt |
| 3.40M | 1.62M | 2.48M | 1.94M | 3.04M | Net Debt |
| -15.84M | -9.27M | -7.05M | -10.01M | -10.51M | 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 | |||
| 0.00 | 4.47M | 5.87M | 1.56M | -477.00K | Operating Cash Flow |
| 0.00 | 4.71M | 6.02M | 2.00M | -50.00K | Investing Cash Flow |
| 0.00 | -3.59M | -8.43M | -3.50M | 7.60M | Financing Cash Flow |
| 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Radcom Technical Analysis
Positive
11.97
Price Trends
11.63
Positive
12.24
Negative
11.27
Positive
Market Momentum
-0.04
Negative
57.80
Neutral
90.18
Negative
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 11.97 is above the 20-day moving average (MA) of 11.00, above the 50-day MA of 11.63, and above the 200-day MA of 11.27, indicating a bullish trend. The MACD of -0.04 indicates Negative momentum. The RSI at 57.80 is Neutral, neither overbought nor oversold. The STOCH value of 90.18 is Negative, 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
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $191.87M | 27.87 | 7.82% | ― | 18.23% | 81.31% | |
65 Neutral | $330.78M | ― | 0.20% | ― | 9.62% | ― | |
63 Neutral | $140.51M | ― | ― | ― | ― | ||
59 Neutral | $13.76B | 7.64 | -1.94% | 3.86% | 2.38% | -36.56% | |
52 Neutral | $244.07M | ― | -5.79% | 6.41% | -5.46% | -68.96% | |
51 Neutral | $572.00M | ― | -12.42% | ― | 1.91% | 15.71% | |
48 Neutral | $42.87M | ― | 174.77% | ― | 7.00% | 31.92% |
* Communication Services Sector Average
Performance Comparison
RDCM
Radcom
11.97
2.28
23.53%
ATNI
ATN International
16.04
-5.10
-24.12%
SIFY
Sify Technologies
4.58
-2.56
-35.85%
RBBN
Ribbon Communications
3.24
0.12
3.85%
KORE
KORE Group Holdings
2.45
-1.51
-38.13%
SNRE
Sunrise Communications AG Unsponsored ADR Class A
54.09
8.09
17.59%
Radcom Earnings Call Summary
Earnings Call Date:Feb 12, 2025
(Q4-2024)
| % Change Since: -18.68%|
Next Earnings Date:May 14, 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.Q4-2024 Updates
Positive Updates
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.
Negative Updates
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.