SuperCom (SPCB) AI Stock Analysis

• Market Cap: $39.55M
• Dividend Yield: N/A
• Average Volume (3M): 156.18K
• Price to Earnings (P/E): 26.1
• Beta (1Y): 0.79
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: US
• Employees: 124
• Sector: Industrials
• Sector Strength: 80
• Industry: Security & Protection Services
• EPS (TTM): 0.49
• Shares Outstanding: 4,448,300
• 10 Day Avg. Volume: 224,903
• 30 Day Avg. Volume: 156,184
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $13.75
• Price Target Upside: 51.10% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 60 Neutral
• Price Target: $9.50 ▲(4.40% Upside)

SuperCom's overall stock score reflects a mixed financial performance with significant improvements in profitability and strategic market expansion, particularly in the U.S. The strong earnings call sentiment and improved cash position are positive indicators. However, the high leverage and challenges in cash flow generation pose risks. Technical indicators suggest bearish momentum, and the valuation is moderate with no dividend yield.

Positive Factors

Analyst Rating

Analyst maintains a Buy rating for SuperCom Ltd. and raises the price target to $18, indicating confidence in the company's future performance.

Business Expansion

SuperCom Ltd. recently signed its 20th electronic monitoring contract in the U.S., which highlights growing business momentum in the region.

Financial Performance

SuperCom Ltd. has maintained a streak of nine consecutive quarters of positive adjusted EBITDA, demonstrating consistent financial performance.

Negative Factors

Stock Valuation

Shares of SuperCom Ltd. are trading at a 15-month high, driven by increased investor confidence and positive business developments.

SuperCom Business Overview & Revenue Model

Company Description

SuperCom Ltd. provides digital identity, Internet of Things and connectivity, and cyber security products and solutions to governments, and private and public organizations worldwide. It offers MAGNA, a common platform for national ID registries, e-passports, biometric visas, automated fingerprint identification systems, digitized driver's licenses, and electronic voter registration and election management. The company's PureRF suite is a solution based on RFID tag technology to identify, locate, track, monitor, count, and protect people and objects. Its PureRF suite comprises PureRF tags, hands-free long-range RFID asset and vehicle tags, PureRF readers, PureRF activators, and PureRF initializers, house arrest monitoring systems, PureTag RF bracelets, PureCom RF base stations, GPS offender tracking systems, PureTrack, PureBeacon, PureMonitor offender electronic monitoring software, inmate monitoring systems, DoorGuard tracking station, and personnel tags. In addition, the company offers domestic violence victim protection systems. Further, it provides connectivity products and solutions comprising AVIDITY WBSac, BOLSTER WBSn, BreezeULTRA P6000, Arena controller, and BreezeNET B. Additionally, the company offers Safend's Encryption Suite that protects the organization's sensitive data; and designs solutions for carrier Wi-Fi, enterprise connectivity, smart city, smart hospitality, connected campuses, and connected events. It sells its systems and products through local representatives, subsidiaries, and distribution channels, as well as independent representatives and resellers. The company was formerly known as Vuance Ltd. and changed its name to SuperCom Ltd. in January 2013. SuperCom Ltd. was incorporated in 1988 and is headquartered in Tel Aviv-Yafo, Israel.

How the Company Makes Money

SuperCom generates revenue through multiple streams, including the sale of hardware and software solutions, subscription services for its electronic monitoring systems, and government contracts for identity management projects. The company also benefits from partnerships with law enforcement agencies and government entities, providing tailored solutions that meet specific security and monitoring needs. Additionally, recurring revenue from maintenance and support services contributes to its overall earnings, ensuring a steady income from existing installations and system upgrades.

SuperCom Financial Statement Overview

Summary

SuperCom is making progress in improving its financial performance, with positive net income and revenue growth. However, challenges remain with cash flow generation and high leverage, impacting financial stability. Continued focus on profitability and debt reduction is critical.

Income Statement

SuperCom has shown a positive turnaround in its income statement. The gross profit margin improved to 48.43% in 2024 from 38.47% in 2023, indicating better cost management. The net profit margin also turned positive to 2.39% from a negative margin in 2023, highlighting improved profitability. Revenue grew by 4.01% year-over-year, showing modest growth. However, EBIT and EBITDA margins remain slim at 0.08% and 19.73% respectively, indicating profitability is still a concern.

Balance Sheet

The balance sheet reflects a high level of leverage, with a debt-to-equity ratio of 2.63 in 2024. Although stockholders' equity has improved, the return on equity is only 5.65%, suggesting room for improvement in generating returns for shareholders. The equity ratio is at 25.46%, indicating that a significant portion of assets is financed by debt, which poses a financial risk.

Cash Flow

Cash flow performance remains a challenge for SuperCom. Despite negative free cash flow, it has improved slightly from -$5.73 million in 2023 to -$4.38 million in 2024. Operating cash flow to net income ratio is negative due to ongoing operating losses, and the free cash flow to net income ratio is also unfavorable. These metrics highlight the company's struggle to generate positive cash flow from its operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	26.84M	27.64M	26.57M	17.65M	12.27M	11.77M
Gross Profit	13.90M	13.38M	10.22M	6.39M	6.20M	5.58M
EBITDA	3.47M	5.46M	1.47M	-3.29M	-4.26M	-1.33M
Net Income	1.55M	661.00K	-4.02M	-7.46M	-10.14M	-7.87M
Balance Sheet
Total Assets	49.57M	45.92M	44.75M	42.04M	42.12M	40.34M
Cash, Cash Equivalents and Short-Term Investments	6.09M	3.54M	5.21M	4.04M	3.54M	3.14M
Total Debt	30.87M	30.73M	35.35M	34.16M	31.58M	22.16M
Total Liabilities	35.77M	34.23M	39.94M	38.91M	37.73M	35.42M
Stockholders Equity	13.81M	11.70M	4.82M	3.13M	4.39M	4.92M
Cash Flow
Free Cash Flow	1.64M	-4.64M	-5.73M	-6.79M	-11.10M	-7.92M
Operating Cash Flow	1.64M	-1.29M	-2.37M	-4.65M	-9.41M	-6.51M
Investing Cash Flow	0.00	-3.35M	-3.37M	-2.19M	-1.64M	-1.57M
Financing Cash Flow	0.00	2.60M	6.80M	6.74M	11.70M	10.83M

SuperCom Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 9.10
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPCB, the sentiment is Neutral. The current price of 9.1 is below the 20-day moving average (MA) of 9.77, below the 50-day MA of 9.88, and above the 200-day MA of 8.06, indicating a neutral trend. The MACD of -0.23 indicates Positive momentum. The RSI at 43.34 is Neutral, neither overbought nor oversold. The STOCH value of 14.43 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SPCB.

SuperCom Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	64 Neutral	$10.96B	16.35	8.89%	1.96%	2.68%	-15.17%
SPCB	60 Neutral	$39.55M	26.07	9.92%	―	―	―
VRME	53 Neutral	$11.63M	―	-28.37%	―	-13.20%	-89.43%
BKYI	47 Neutral	$5.14M	―	-145.28%	―	13.96%	85.22%
IVDA	―	$4.69M	―	-126.65%	―	―	―
GFAI	50 Neutral	$25.44M	―	-20.57%	―	0.18%	91.18%
KSCP	43 Neutral	$60.28M	―	-236.56%	―	-6.61%	40.20%