Spirent (SPMYY) AI Stock Analysis

• Market Cap: $1.54B
• Dividend Yield: 1.88%
• Average Volume (3M): 75.00
• Price to Earnings (P/E): 210.1
• Beta (1Y): 0.21
• Revenue Growth: 5.48%
• EPS Growth: -45.69%
• Country: US
• Employees: 1,526
• Sector: Technology
• Sector Strength: 83
• Industry: Software - Infrastructure
• EPS (TTM): 0.06
• Shares Outstanding: 145,287,340
• 10 Day Avg. Volume: 105
• 30 Day Avg. Volume: 75
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.85
• Enterprise Value/Revenue: 2.87
• Enterprise Value/Gross Profit: 3.98
• Enterprise Value/Ebitda: 34.44
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 61 Neutral
• Price Target: ―

Spirent's overall stock score reflects a balance of strong gross margins and cash flow against challenges in profitability and revenue decline. Technical indicators suggest a neutral stance with some caution due to possible overvaluation indicated by the high P/E ratio. The lack of noteworthy earnings call data or corporate events suggests a stable but cautious outlook, with a need to improve profitability and valuation metrics to enhance investor confidence.

Spirent Business Overview & Revenue Model

Company Description

Spirent Communications plc provides automated test and assurance solutions for networks, cybersecurity, and positioning in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. The company operates in Lifecycle Service Assurance and Networks & Security segments. The Lifecycle Service Assurance segment provides testing solutions for 5G mobile core networks, and cellular and Wi-Fi devices in the lab, as well as diagnoses, troubleshoots, and resolves issues with production networks and services. The Networks & Security segment develops test methodologies, tools, and services for virtualised networks, cloud, and proactive security validation; and offers Ethernet/IP performance testing solutions, as well as provides navigation satellite system test and simulation solutions while addressing opportunities in the broader positioning, navigation, and timing market. The company was formerly known as Spirent plc and changed its name to Spirent Communications plc in May 2006. Spirent Communications plc was founded in 1936 and is headquartered in Crawley, the United Kingdom.

How the Company Makes Money

Spirent generates revenue through the sale of its hardware and software solutions, alongside recurring revenue from maintenance and support services. The company's key revenue streams include direct sales of testing equipment and software licenses, subscription-based services, and consulting engagements that assist customers in deploying and optimizing their technology environments. Spirent also benefits from strategic partnerships with major telecommunications companies and technology vendors, which enhances its market reach and credibility. Additionally, the increasing demand for network reliability and security solutions due to the rise of 5G, IoT, and cloud computing trends contributes significantly to its earnings.

Spirent Financial Statement Overview

Summary

Spirent demonstrates a mixed financial performance, with strong gross profit margins and improved cash flow generation. The balance sheet is solid with low leverage, but there are concerns with declining revenue and net profit margins. The company needs to address these challenges to enhance overall financial health.

Income Statement

The company shows a declining revenue trend with a revenue decrease from $607.5M in 2022 to $460.2M in 2024, indicating a challenging market environment. However, the gross profit margin remains strong at approximately 72% for 2024, demonstrating effective cost management. Net profit margins have decreased significantly from previous years, falling to 2.8% in 2024, which is a concern. EBIT and EBITDA margins also show a declining trend, reflecting operational challenges.

Balance Sheet

The company maintains a solid balance sheet with a favorable debt-to-equity ratio of approximately 0.05 in 2024, indicating low leverage. The equity ratio stands at about 63.9%, reflecting strong equity backing. However, there is a decreasing trend in total assets and stockholders' equity over the years, which could indicate potential long-term concerns if not addressed.

Cash Flow

The company exhibits strong free cash flow generation, with a significant increase in free cash flow from $25.4M in 2023 to $49.1M in 2024, reflecting improved cash management. The operating cash flow to net income ratio is robust at approximately 4.38 in 2024, indicating efficient cash generation relative to net income. However, the free cash flow to net income ratio is lower, suggesting that net income is not translating as effectively into free cash flow.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	460.20M	474.30M	607.50M	576.00M	522.40M
Gross Profit	331.50M	343.60M	437.10M	424.70M	383.40M
EBITDA	35.20M	46.30M	133.40M	126.40M	112.60M
Net Income	12.90M	25.20M	99.90M	89.20M	84.40M
Balance Sheet
Total Assets	614.20M	583.80M	705.30M	691.30M	649.80M
Cash, Cash Equivalents and Short-Term Investments	141.80M	108.10M	209.60M	174.80M	241.20M
Total Debt	20.30M	21.40M	22.10M	29.80M	28.20M
Total Liabilities	221.70M	208.00M	240.10M	243.80M	207.00M
Stockholders Equity	392.50M	375.80M	465.20M	447.50M	442.80M
Cash Flow
Free Cash Flow	49.10M	25.40M	109.40M	92.70M	111.70M
Operating Cash Flow	56.40M	31.90M	117.80M	102.90M	121.20M
Investing Cash Flow	-11.50M	-7.90M	-6.10M	-60.20M	-7.00M
Financing Cash Flow	-9.20M	-126.90M	-72.40M	-109.20M	-57.10M

Spirent Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 10.19
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPMYY, the sentiment is Positive. The current price of 10.19 is above the 20-day moving average (MA) of 10.06, above the 50-day MA of 10.01, and above the 200-day MA of 9.39, indicating a bullish trend. The MACD of 0.06 indicates Negative momentum. The RSI at 58.48 is Neutral, neither overbought nor oversold. The STOCH value of 37.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SPMYY.

Spirent Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TUYA	76 Outperform	$1.60B	76.65	2.89%	4.06%	22.46%	―
ATEN	74 Outperform	$1.24B	25.18	24.39%	1.38%	11.04%	18.70%
VRNT	71 Outperform	$1.22B	26.19	5.32%	―	-2.09%	76.96%
NTCT	69 Neutral	$1.72B	23.88	4.88%	―	5.29%	―
RDWR	69 Neutral	$1.06B	77.54	4.46%	―	11.51%	―
Sector *	61 Neutral	$35.62B	7.50	-10.94%	1.87%	8.86%	-10.27%
SPMYY	61 Neutral	$1.54B	210.10	1.79%	1.88%	5.48%	-45.69%