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Spok Holdings Inc (SPOK)
NASDAQ:SPOK
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Spok Holdings
(NASDAQ:SPOK)
69Neutral
Positive Factors
Dividends
The company generates consistent cash flow to pay its compelling dividend and drive growth in the software business.
Growth Prospects
Analyst recommends upgrading the stock rating from Neutral to Buy, with an increased price target based on the company's valuation and growth prospects.
Market Potential
Spok serves a large addressable market, with only 26% market penetration in the U.S., indicating room for growth domestically and internationally.
Negative Factors
Overall Business Performance
The overall business, which consists of wireless/pagers (down 3%) and software/Spok Care Connect (up 1%) sales, was down 1% Y/Y in 1H24.
Paging Revenue Decline
Paging revenue in the quarter declined with a decrease in wireless units in service.
Spok Holdings (SPOK) vs. S&P 500 (SPY)
Market Cap
$334.46M
Dividend Yield7.63%
Average Volume (3M)140.13K
Price to Earnings (P/E)22.5
Beta (1Y)0.91
Revenue Growth-0.99%
EPS Growth-5.80%
CountryUS
Employees410
SectorHealthcare
Sector Strength78
IndustryMedical - Healthcare Information Services
Share Statistics
EPS (TTM)0.73
Shares Outstanding20,419,025
10 Day Avg. Volume104,100
30 Day Avg. Volume140,128
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.36
Price to Cash Flow (P/CF)9.70
P/FCF Ratio9.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$20.00Price Target Upside22.10% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Spok Holdings Business Overview & Revenue Model
Company DescriptionSpok Holdings, Inc. is a leader in critical communication solutions for healthcare, government, and public safety sectors. The company provides a range of services, including paging, secure messaging, and clinical alerting that help organizations streamline their communication processes and enhance operational efficiency. Spok's solutions are designed to improve communication workflows, ensuring that critical information is delivered securely and promptly.
How the Company Makes MoneySpok Holdings generates revenue primarily through the sale and subscription of its communication solutions and services. The company's revenue model includes recurring monthly fees from its paging services, software licensing fees, and maintenance contracts. Spok's key revenue streams include its wireless services, such as pager messaging, and its software solutions, which encompass secure messaging and clinical alerting platforms. Additionally, the company benefits from partnerships with healthcare institutions and other organizations that rely on its specialized communication systems to enhance their operational efficiency and response times.
Spok Holdings Financial Statement Overview
Summary
Spok Holdings demonstrates solid financial health with strengths in equity and cash flow management. While profitability margins have shown some decline, effective cash generation and a strong capital structure provide stability.Income Statement
Spok Holdings shows a stable but slightly declining revenue trend from 2020 to 2024. The gross profit margin is strong, indicating effective management of production costs. However, the net profit margin has shown volatility, with a decline in recent years. The EBIT and EBITDA margins demonstrate profitability, although they have decreased over time, suggesting challenges in operational efficiency.65
Positive
Balance Sheet
The balance sheet reflects a strong equity position with a declining debt-to-equity ratio, indicating reduced leverage and financial risk. The return on equity (ROE) is positive, although it has been inconsistent, reflecting fluctuations in net income. The equity ratio indicates a solid capital structure, supporting stability.72
Positive
Cash Flow
Cash flow analysis shows positive free cash flow, highlighting the company's ability to generate cash after capital expenditures. The operating cash flow has improved, surpassing net income in recent periods, indicating strong cash management. However, fluctuations in free cash flow growth suggest variable investment and financing activities.68
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 137.65M | 139.03M | 134.53M | 142.15M | 148.18M | Gross Profit |
| 109.22M | 112.21M | 106.27M | 109.58M | 119.64M | EBIT |
| 18.96M | 21.23M | 14.90M | 3.61M | 27.35M | EBITDA |
| 24.22M | 26.62M | 11.14M | -629.00K | -12.71M | Net Income Common Stockholders |
| 14.96M | 15.67M | 21.86M | -22.18M | -44.23M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 29.14M | 31.99M | 35.75M | 59.58M | 78.72M | Total Assets |
| 217.10M | 227.68M | 244.48M | 248.15M | 277.29M | Total Debt |
| 8.77M | 11.09M | 15.70M | 17.29M | 14.72M | Net Debt |
| -20.37M | -20.90M | -20.05M | -27.30M | -34.01M | Total Liabilities |
| 62.36M | 63.91M | 72.40M | 74.46M | 76.68M | Stockholders Equity |
| 154.75M | 163.77M | 172.08M | 173.69M | 200.61M |
| Cash Flow | Free Cash Flow | |||
| 25.71M | 22.77M | 2.68M | -7.27M | 11.46M | Operating Cash Flow |
| 28.92M | 26.18M | 6.46M | 7.97M | 26.16M | Investing Cash Flow |
| -3.21M | -3.42M | 11.26M | -225.00K | -14.57M | Financing Cash Flow |
| -28.54M | -26.68M | -26.22M | -11.75M | -10.37M |
Spok Holdings Technical Analysis
Positive
16.38
Price Trends
16.15
Positive
16.03
Positive
15.21
Positive
Market Momentum
0.08
Negative
62.61
Neutral
85.30
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPOK, the sentiment is Positive. The current price of 16.38 is above the 20-day moving average (MA) of 16.13, above the 50-day MA of 16.15, and above the 200-day MA of 15.21, indicating a bullish trend. The MACD of 0.08 indicates Negative momentum. The RSI at 62.61 is Neutral, neither overbought nor oversold. The STOCH value of 85.30 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SPOK.
Spok Holdings Risk Analysis
Spok Holdings disclosed 25 risk factors in its most recent earnings report. Spok Holdings reported the most risks in the “Tech & Innovation” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Spok Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (48)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $5.26B | 16.98 | 49.85% | 0.86% | 58.03% | 80.93% | |
69 Neutral | $334.46M | 22.51 | 9.40% | 7.63% | -0.99% | -5.80% | |
60 Neutral | $2.34B | ― | -3.97% | ― | -20.02% | -193.84% | |
60 Neutral | $362.95M | ― | -2.14% | ― | 24.52% | 61.08% | |
51 Neutral | $241.66M | ― | -40.78% | ― | -2.23% | 19.48% | |
48 Neutral | $6.86B | 1.11 | -50.22% | 2.47% | 16.71% | 1.53% |
* Healthcare Sector Average
Performance Comparison
SPOK
Spok Holdings
16.38
1.62
10.98%
EGHT
8X8
1.84
-0.62
-25.20%
CALX
Calix
32.39
1.27
4.08%
IDCC
InterDigital
198.07
103.44
109.31%
BAND
Bandwidth
12.68
-4.79
-27.42%
Spok Holdings Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: 0.99% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong growth in software revenue and bookings, improved profitability, and effective expense management. However, these positives were offset by a decline in wireless revenue and a slight overall revenue reduction.Highlights
Strong Software Revenue Growth
Software revenue increased to $64.1 million in 2024, driven by a nearly 22% increase in professional services revenue and strong managed services offerings.
Record Software Operations Bookings
Spok generated over $34 million of software operations bookings, marking a 13% increase from the prior year.
Improved Profitability and Cash Flow
Generated $15 million in net income, which equates to $0.73 per diluted share, alongside $29 million of adjusted EBITDA.
Consistent Dividend Payouts
Returned $26.4 million of cash to stockholders through dividends in 2024 and expects to pay dividends in excess of $27 million in 2025.
Stability in Operating Expenses
Operating expenses for the year were virtually unchanged from 2023, showcasing effective expense management.
Lowlights
Decline in Wireless Revenue
Wireless revenue decreased to $73.5 million from $76 million in the prior year, reflecting ongoing challenges in this segment.
Slight Reduction in Total GAAP Revenue
Total GAAP revenue dropped to $137.7 million from $139 million in 2023, indicating a small decline in overall revenue.
Company Guidance
During the fourth quarter of 2024 earnings call, Spok Holdings, Inc. provided guidance for 2025, highlighting several key metrics. The company anticipates total revenue to range between $134 million and $142 million, with wireless revenue expected to be between $69 million and $72 million, and software revenue projected to reach between $65 million and $70 million. Spok also foresees adjusted EBITDA to range from $27.5 million to $32.5 million. In 2024, Spok returned $26.4 million in cash to stockholders and generated over $29 million in adjusted EBITDA. The company achieved $34.1 million in software operations bookings, marking a 13% increase from the prior year. Additionally, the net income for 2024 reached $15 million or $0.73 per diluted share. Spok remains committed to maintaining its dividend policy and aims to pay dividends exceeding $27 million in 2025. The strategic focus continues to be on growing software revenue, improving expense management, and enhancing cash flow generation.Spok Holdings Corporate Events
Business Operations and StrategyFinancial Disclosures
Spok Holdings Highlights Strategic Goals and Financial Performance
Positive
Mar 3, 2025
On March 3, 2025, Spok Holdings, Inc. released an investor presentation highlighting its strategic goals and financial performance. The company emphasizes significant free cash flow generation, a strong balance sheet, and a commitment to returning capital to shareholders. Spok’s strategy includes expanding its software pipeline, stabilizing wireless revenue, and maintaining long-standing customer relationships. The company also addresses fiscal challenges in the healthcare sector by offering managed maintenance agreements and product enhancements, ensuring continued customer satisfaction and operational efficiency.
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.