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SuperCom (SPCB)
NASDAQ:SPCB
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SuperCom
(NASDAQ:SPCB)
56Neutral
Positive Factors
Analyst Recommendation
Analyst maintains a Buy rating for SuperCom Ltd. and raises the price target to $18, indicating confidence in the company's future performance.
Business Momentum
Increased estimates for 2025 are based on strong business momentum in the U.S., which suggests growing opportunities for SuperCom Ltd.
Negative Factors
Profitability
Adjusted EBITDA of $1.1M was down from $2.7M year-over-year, reflecting a decrease in profitability.
SuperCom (SPCB) vs. S&P 500 (SPY)
Market Cap
$21.76M
Dividend YieldN/A
Average Volume (3M)134.64K
Price to Earnings (P/E)―
Beta (1Y)0.99
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees121
SectorIndustrials
Sector Strength63
IndustrySecurity & Protection Services
Share Statistics
EPS (TTM)-0.23
Shares Outstanding3,475,530
10 Day Avg. Volume86,665
30 Day Avg. Volume134,640
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.26
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
$18.00Price Target Upside217.46% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
SuperCom Business Overview & Revenue Model
Company DescriptionSuperCom (SPCB) is a technology company specializing in providing advanced digital identity, security, and e-Government solutions to governments and organizations worldwide. The company's core offerings include electronic monitoring, cybersecurity, and mobile payments. SuperCom's products are designed to enhance public safety, secure identity management, and facilitate secure transactions.
How the Company Makes MoneySuperCom generates revenue primarily through the sale and licensing of its digital identity and security solutions. The company's key revenue streams include government contracts for electronic monitoring services, such as offender tracking systems, and the implementation of e-Government platforms that enhance identity verification and public safety. Additionally, SuperCom earns income from its cybersecurity services, providing protection to sensitive data for both public and private sector clients. The company often engages in long-term contracts, which provide a steady stream of recurring revenue. Strategic partnerships with governmental agencies and organizations also contribute to its earnings by expanding its market reach and enhancing its technology offerings.
SuperCom Financial Statement Overview
Summary
SuperCom's financial position shows mixed signals with strong revenue growth but continuous net losses and negative cash flows. The high leverage and low equity ratio suggest financial instability, while operational inefficiencies are apparent in negative EBIT and EBITDA margins. The company needs to address its cash flow challenges and improve profitability to enhance financial health.Income Statement
SuperCom's revenue has shown significant growth, increasing by 50.53% from 2022 to 2023. However, profitability remains a concern with a net loss of $4.02 million in 2023. The gross profit margin is stable at 38.48% for 2023, but negative EBIT and EBITDA margins indicate operational inefficiencies.42
Neutral
Balance Sheet
The company's high debt-to-equity ratio of 7.34 suggests significant leverage, which poses financial risk. However, stockholders' equity has improved to $4.82 million in 2023. The equity ratio is low at 10.76%, highlighting reliance on debt financing.39
Negative
Cash Flow
Operating cash flow improved slightly but remains negative at -$2.37 million in 2023, indicating challenges in generating cash from operations. Free cash flow is still negative, though it has improved from the previous year. The cash flow metrics highlight liquidity concerns.35
Negative
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 26.84M | 26.57M | 17.65M | 12.27M | 11.77M | 16.48M | Gross Profit |
| 13.90M | 10.22M | 6.39M | 6.20M | 5.58M | 6.35M | EBIT |
| 2.15M | -2.31M | -6.00M | -6.05M | -3.81M | -8.38M | EBITDA |
| 2.73M | 1.47M | -3.29M | -4.26M | -1.33M | -6.39M | Net Income Common Stockholders |
| 1.55M | -4.02M | -7.46M | -10.14M | -7.87M | -11.51M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 197.00K | 5.21M | 4.04M | 3.54M | 3.14M | 110.00K | Total Assets |
| 2.01M | 44.75M | 42.04M | 42.12M | 40.34M | 40.00M | Total Debt |
| 5.25M | 35.35M | 34.16M | 31.58M | 22.16M | 14.63M | Net Debt |
| 5.05M | 30.15M | 30.11M | 28.05M | 19.02M | 14.52M | Total Liabilities |
| 9.88M | 39.94M | 38.91M | 37.73M | 35.42M | 31.67M | Stockholders Equity |
| -7.87M | 4.82M | 3.13M | 4.39M | 4.92M | 8.33M |
| Cash Flow | Free Cash Flow | ||||
| 1.64M | -5.73M | -6.79M | -11.10M | -7.92M | -8.83M | Operating Cash Flow |
| 1.64M | -2.37M | -4.65M | -9.41M | -6.51M | -7.66M | Investing Cash Flow |
| 0.00 | -3.37M | -2.19M | -1.64M | -1.57M | -1.18M | Financing Cash Flow |
| 0.00 | 6.80M | 6.74M | 11.70M | 10.83M | 7.24M |
SuperCom Technical Analysis
Negative
5.67
Price Trends
8.91
Negative
7.23
Negative
5.40
Positive
Market Momentum
-0.55
Negative
40.12
Neutral
28.00
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPCB, the sentiment is Negative. The current price of 5.67 is below the 20-day moving average (MA) of 6.96, below the 50-day MA of 8.91, and above the 200-day MA of 5.40, indicating a neutral trend. The MACD of -0.55 indicates Negative momentum. The RSI at 40.12 is Neutral, neither overbought nor oversold. The STOCH value of 28.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SPCB.
SuperCom Risk Analysis
SuperCom disclosed 38 risk factors in its most recent earnings report. SuperCom 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
SuperCom Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $944.50M | 15.59 | 6.35% | ― | -0.13% | 263.78% | |
68 Neutral | $22.72B | 30.02 | -72.04% | ― | 4.31% | 1.07% | |
62 Neutral | $7.26B | 12.38 | 3.01% | 3.40% | 3.58% | -14.13% | |
58 Neutral | $48.35M | ― | -5.24% | ― | 5.78% | 54.19% | |
56 Neutral | $21.76M | ― | 9.92% | ― | ― | ― | |
56 Neutral | $220.30M | 6.51 | 29.19% | 2.43% | ― | ― | |
49 Neutral | $71.74M | ― | -21.97% | ― | -63.51% | -326.18% |
* Industrials Sector Average
Performance Comparison
SPCB
SuperCom
5.67
1.22
27.42%
INVE
Identiv
2.99
-2.18
-42.17%
IMMR
Immersion
6.80
-0.25
-3.55%
IDN
Intellicheck Mobilisia
2.44
-1.04
-29.89%
VRNT
Verint Systems
15.20
-16.51
-52.07%
VRSN
Verisign
240.20
53.03
28.33%
SuperCom Earnings Call Summary
Earnings Call Date: Nov 14, 2024 | % Change Since: 47.66% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue growth, profitability, and significant market expansion, particularly in the U.S. and Israel. Technological advancements and a solid cash position further strengthened the company's outlook. However, challenges such as gross margin fluctuations and EBITDA decline due to project mix and timing were noted. Overall, the positive achievements and strategic wins outweigh the challenges.Highlights
Significant Revenue Growth and Profitability
Year-to-date revenue increased to $21.3 million. Gross profit surged by 35% to $10.7 million, and the gross profit margin improved dramatically to 50.1% from 30.7% in the prior year period. Free cash flow increased to positive $1.2 million from negative numbers in Q3 of last year.
Key Contract Wins and Market Expansion
Secured key contracts, including the National Israeli electronic monitoring project. Expanded into new regions such as New York, West Virginia, and Maryland, strengthening the U.S. market presence.
Technological Advancements
Launched advanced AI-driven analytics integrated into electronic monitoring systems. New products like PureProtect and PureOne are gaining traction in various markets, enhancing competitive edge.
Debt Reduction and Strong Cash Position
Reduced long-term liabilities by $4.5 million year-over-year. Cash balance grew to $6.2 million, marking the highest reported cash position in recent years.
Lowlights
Gross Margin Fluctuations
Gross profit margin decreased to 46% in Q3 from 59% in the previous quarter due to project mix and timing.
EBITDA Decline
EBITDA totaled $1.1 million compared to $2.5 million in Q3 of last year, mainly due to project mix and timing.
Project Stage Impact on Financials
Initial project stages incur higher expenses, causing fluctuations in quarterly financial results. The evolving project portfolio is expected to stabilize margins over time.
Company Guidance
During the SuperCom earnings call for Q3 2024, Ordan Trabelsi, the President and CEO, highlighted several financial metrics and strategic achievements. Revenue for the first nine months surged to $21.3 million, with a 35% increase in gross profit, reaching $10.7 million, and a significant improvement in gross profit margin to 50.1% from 30.7% in the prior year. Additionally, the company reported a net income of $2.52 million, a turnaround from a net loss of $2.48 million in the previous period, and positive free cash flow of $1.2 million. The cash balance stood at $6.2 million, marking a robust financial footing. The company also secured several key contracts, including a prestigious five-year deal with the Israeli Prison Service, with options for extension, and expanded its operations into new U.S. regions such as New York, West Virginia, and Maryland. These developments underscore SuperCom's strategic focus on enhancing its market presence and leveraging its advanced electronic monitoring solutions to drive sustained growth and profitability.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.