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SuperCom (SPCB)
NASDAQ:SPCB
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SuperCom
(NASDAQ:SPCB)
Rating:66Neutral
Price Target:
$10.50
▲(8.70%Upside)
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 (SPCB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$43.73M
Dividend YieldN/A
Average Volume (3M)162.93K
Price to Earnings (P/E)27.6
Beta (1Y)0.81
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees124
SectorIndustrials
Sector Strength93
IndustrySecurity & Protection Services
Share Statistics
EPS (TTM)1.20
Shares Outstanding4,448,300
10 Day Avg. Volume108,855
30 Day Avg. Volume162,933
Financial Highlights & Ratios
PEG Ratio0.37
Price to Book (P/B)41.97
Price to Sales (P/S)0.00
P/FCF Ratio-19.35
Enterprise Value/Market Cap3.69
Enterprise Value/Revenue1.52
Enterprise Value/Gross Profit11.62
Enterprise Value/Ebitda27.04
Forecast
1Y Price Target
$11.50Price Target Upside19.05% Upside
Rating ConsensusHold
Number of Analyst Covering0
SuperCom Business Overview & Revenue Model
Company DescriptionSuperCom 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 MoneySuperCom makes money through the sale and licensing of its proprietary technology products and services. The company's key revenue streams include contracts with government agencies and enterprises for electronic monitoring systems, such as GPS tracking devices and inmate monitoring solutions, as well as digital identity solutions for secure document and credential issuance. Additionally, SuperCom offers cybersecurity services that protect clients against digital threats. The company benefits from long-term contracts and recurring revenue models in its electronic monitoring and identification sectors. Significant partnerships with government entities and large organizations further contribute to its earnings by expanding its market reach and customer base.
SuperCom Earnings Call Summary
Earnings Call Date:May 14, 2025
(Q1-2025)
| % Change Since: 48.62%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong financial performance with significant growth in revenue and gross profit, successful technological advancements, and notable expansion in the U.S. market. However, macroeconomic uncertainties and challenges in navigating the fragmented U.S. market were acknowledged.Q1-2025 Updates
Positive Updates
Strong Financial Performance
Revenue increased to $7.05 million, up from $6.85 million, driven by new contract wins and continued expansion across the U.S. and Europe. Gross profit increased to $4.46 million, a 17.8% increase from $3.79 million last year. Gross margin improved significantly to 63.6% compared to 55.3%.
Technological Advancements and R&D Investments
SuperCom invested over $40 million in technology platforms, achieving a win rate of approximately 65% in competitive tenders in Europe. Integration of AI-driven analytics and improvements in battery life and GPS tracking capabilities were noted.
U.S. Market Expansion
Since mid-2024, SuperCom secured over 20 new electronic monitoring contracts and entered eight new U.S. states.
Debt Reduction and Improved Cash Position
Long-term loans were reduced to $24.2 million from $34.3 million last year. Cash and cash equivalents increased to $17.1 million from $3.2 million at year-end 2024.
Significant Contract Wins
Secured a multi-year national contract with the Israel Prison Service and continued expansion in Romania and other European countries.
Negative Updates
Macro-Economic Uncertainties
Despite positive trends, SuperCom faces macroeconomic uncertainties and global challenges, including those in Israel.
Challenges in the U.S. Market
The U.S. market is fragmented, requiring a strategic approach to plant seeds and gradually expand through various local and federal contracts.
Company Guidance
During the SuperCom First Quarter 2025 Financial Results and Corporate Update Conference Call, the company reported strong financial performance and outlined its strategic focus for future growth. Key metrics highlighted include a revenue increase to $7.05 million, up from $6.85 million in the same period last year, and a gross profit increase to $4.46 million, marking a 17.8% rise. The gross margin improved significantly to 63.6%, and operating income doubled year-over-year to $1.22 million. SuperCom also reported a GAAP net income of $4.23 million and a non-GAAP net income of $5.24 million. The company's EBITDA for the quarter reached $2.5 million, representing a 25% increase, marking the 11th consecutive quarter of positive EBITDA. The company ended the quarter with a stronger balance sheet, reducing long-term loans to $24.2 million and increasing cash and cash equivalents to $17.1 million. SuperCom's strategy focuses on expanding its global presence, particularly in the U.S. market, and leveraging its advanced electronic monitoring technologies, such as the PureProtect and PureOne solutions, to drive growth.SuperCom Financial Statement Overview
Summary
SuperCom is improving its financial metrics with a positive net income and revenue growth. However, significant challenges remain due to high leverage and weak cash flow generation, which could affect financial stability.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.65
Positive
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.55
Neutral
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.45
Neutral
| 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 | -4.38M | -5.73M | -6.79M | -11.10M | -7.92M |
| Operating Cash Flow | 1.64M | -2.78M | -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 | 4.09M | 6.80M | 6.74M | 11.70M | 10.83M |
SuperCom Technical Analysis
Neutral
9.66
Price Trends
9.31
Positive
8.25
Positive
7.07
Positive
Market Momentum
0.11
Positive
45.51
Neutral
43.69
Neutral
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 9.66 is below the 20-day moving average (MA) of 10.32, above the 50-day MA of 9.31, and above the 200-day MA of 7.07, indicating a neutral trend. The MACD of 0.11 indicates Positive momentum. The RSI at 45.51 is Neutral, neither overbought nor oversold. The STOCH value of 43.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (67)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | £2.84B | 10.44 | 4.69% | 3.54% | 2.40% | -24.53% | |
66 Neutral | $43.73M | 27.62 | 9.92% | ― | ― | ― | |
54 Neutral | $25.65M | ― | -20.57% | ― | 0.18% | 91.18% | |
48 Neutral | $55.21M | ― | -243.06% | ― | -5.64% | 35.09% | |
47 Neutral | $9.32M | ― | -28.42% | ― | -9.87% | -49.12% | |
43 Neutral | $5.55M | ― | -116.82% | ― | -7.25% | 80.12% | |
| ― | $6.14M | ― | -112.33% | ― | ― | ― |
* Industrials Sector Average
Performance Comparison
SPCB
SuperCom
9.66
6.07
169.08%
BKYI
BIO-key International
0.81
-0.91
-52.91%
IVDA
Iveda Solutions
2.34
1.85
377.55%
VRME
VerifyMe
0.74
-0.55
-42.64%
GFAI
Guardforce AI Co
1.21
-1.17
-49.16%
KSCP
Knightscope Inc Class A
7.46
-7.04
-48.55%
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.