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Spok Holdings Inc (SPOK)
NASDAQ:SPOK

Spok Holdings (SPOK) AI Stock Analysis

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Spok Holdings

(NASDAQ:SPOK)

Rating:76Outperform
Price Target:
Spok Holdings scores well due to strong financial health, robust profitability, and effective cash flow management, underlined by a solid balance sheet and low leverage. The recent earnings call highlighted significant revenue and EBITDA growth, contributing positively to the score. While technical indicators show mixed signals, the company's reasonable valuation and high dividend yield add to its investment appeal. The primary risk remains the lack of revenue growth, necessitating strategic efforts to boost top-line performance.
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. SPDR S&P 500 ETF (SPY)

Spok Holdings Business Overview & Revenue Model

Company DescriptionSpok Holdings, Inc., through its subsidiary, Spok, Inc., provides healthcare communication solutions in the United States, Europe, Canada, Australia, Asia, and the Middle East. It delivers clinical information to care teams when and where it matters to enhance patient outcomes. The company offers subscriptions to one-way or two-way messaging services; and ancillary services, such as voicemail, and equipment loss or maintenance protection services, as well as sells devices to resellers who lease or resell them to their subscribers. Its Spok Care Connect platform enhance workflows for clinicians and support administrative compliance. In addition, the company provides professional, software license updates, and product support services, as well as sells third-party equipment. It serves businesses, professionals, management personnel, medical personnel, field sales personnel and service forces, members of the construction industry and construction trades, real estate brokers and developers, sales and services organizations, specialty trade organizations, manufacturing organizations, and government agencies. The company was formerly known as USA Mobility, Inc. and changed its name to Spok Holdings, Inc. in July 2014. The company was founded in 1986 and is headquartered in Alexandria, Virginia.
How the Company Makes MoneySpok Holdings generates revenue primarily through the sale of its communication services and solutions to healthcare organizations. The company's revenue model includes subscription fees for its secure messaging and alerting services, as well as sales of software licenses and hardware. Maintenance and support services also contribute to its revenue streams. Additionally, Spok partners with healthcare institutions to offer customized communication solutions, which can involve long-term contracts and recurring revenue through service agreements. The company's focus on the healthcare sector allows it to capitalize on the increasing demand for efficient and reliable communication systems in hospitals and other medical facilities.

Spok Holdings Earnings Call Summary

Earnings Call Date:Apr 30, 2025
(Q1-2025)
|
% Change Since: 17.64%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Positive
The earnings call revealed robust financial performance with significant growth in software and professional services revenues, improved EBITDA, and a strong start to the fiscal year. While there were minor declines in maintenance revenue and flat wireless revenue, the overall tone was optimistic, underpinned by strong sales and customer satisfaction achievements.
Q1-2025 Updates
Positive Updates
Strong Revenue Growth
First quarter total revenues grew by 4% year-over-year, driven by a more than 9% increase in software revenues.
Significant Improvement in Net Income and Adjusted EBITDA
Net income increased by 22.7% and adjusted EBITDA by 8.9% year-over-year.
Professional Services Revenue Surge
Professional services revenue increased by 44% year-over-year, driven by a threefold increase in the managed services category.
Software Backlog Growth
Software backlog increased by more than 15% year-over-year.
High Customer Satisfaction
Spok received top honors in Black Book's 2025 Survey of Healthcare Industry Clients for the eighth consecutive year.
Strong Sales Performance
In the first quarter, Spok signed 22 six-figure customer contracts and generated $8.2 million in bookings.
Negative Updates
Decline in Maintenance Revenue
Maintenance revenue was down approximately 2.1% from the prior year quarter.
Flat Wireless Revenue
Wireless revenue remained nearly flat compared to the first quarter of 2024.
Company Guidance
During Spok Holdings' first quarter 2025 earnings call, the company provided comprehensive guidance on its financial outlook and strategic initiatives. Notably, Spok achieved a 4% year-over-year growth in total revenues, with software revenues increasing by over 9%. Their net income and adjusted EBITDA saw substantial year-over-year increases of 22.7% and 8.9%, respectively. The company reported a 6% year-over-year rise in software operations bookings and a 44% increase in professional services revenue, driven by a threefold growth in the managed services category. Spok generated over $8.2 million in adjusted EBITDA, exceeding the $7.9 million returned to shareholders, and maintained research and development investments at 2024 levels. The company reiterated its full-year 2025 guidance, expecting total revenue to range from $134 million to $142 million and adjusted EBITDA from $27.5 million to $32.5 million. Spok emphasized its commitment to returning capital to shareholders and investing in future growth through continued investment in wireless and software solutions.

Spok Holdings Financial Statement Overview

Summary
Spok Holdings presents a strong financial profile with healthy profitability and cash flow metrics, supported by a solid balance sheet with minimal leverage. While the company's financial stability is commendable, the lack of revenue growth remains a concern, indicating a need for strategic initiatives to enhance top-line expansion.
Income Statement
70
Positive
Spok Holdings shows a stable revenue base with minor fluctuations. The TTM gross profit margin is healthy at 74.30%, and the net profit margin stands at 11.45%, indicating efficient cost management. However, revenue growth has been stagnant, and the EBIT margin of 14.70% reflects moderate operational efficiency. Overall, profitability metrics are strong, but growth remains a concern.
Balance Sheet
75
Positive
The company maintains a strong balance sheet with a low debt-to-equity ratio of 0.05, highlighting minimal leverage and financial stability. The equity ratio of 74.22% underscores a solid capital structure. Return on Equity (ROE) is modest at 10.49%, suggesting that while the company is financially sound, it could improve in generating returns for shareholders.
Cash Flow
78
Positive
Spok Holdings demonstrates robust cash flow management, with a free cash flow to net income ratio of 1.64, indicating strong cash generation relative to profits. The operating cash flow to net income ratio is 1.83, reflecting efficient cash conversion. Free cash flow growth is steady, supporting the company's liquidity and ability to invest in growth opportunities.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
139.04M137.65M139.03M134.53M142.15M148.18M
Gross Profit
103.29M109.22M112.21M106.27M109.58M119.64M
EBIT
20.44M18.96M21.23M14.90M3.61M27.35M
EBITDA
23.69M24.18M26.62M11.14M-629.00K-12.71M
Net Income Common Stockholders
15.93M14.96M15.67M21.86M-22.18M-44.23M
Balance SheetCash, Cash Equivalents and Short-Term Investments
19.87M29.14M31.99M35.75M59.58M78.72M
Total Assets
204.48M217.10M227.68M244.48M248.15M277.29M
Total Debt
8.18M8.77M11.09M15.70M17.29M14.72M
Net Debt
-11.69M-20.37M-20.90M-20.05M-27.30M-34.01M
Total Liabilities
52.74M62.36M63.91M72.40M74.46M76.68M
Stockholders Equity
151.74M154.75M163.77M172.08M173.69M200.61M
Cash FlowFree Cash Flow
26.10M25.71M22.77M2.68M-7.27M11.46M
Operating Cash Flow
29.18M28.92M26.18M6.46M7.97M26.16M
Investing Cash Flow
-3.08M-3.21M-3.42M11.26M-225.00K-14.57M
Financing Cash Flow
-29.51M-28.54M-26.68M-26.22M-11.75M-10.37M

Spok Holdings Technical Analysis

Technical Analysis Sentiment
Positive
Last Price16.54
Price Trends
50DMA
15.70
Positive
100DMA
15.73
Positive
200DMA
15.28
Positive
Market Momentum
MACD
0.17
Negative
RSI
60.56
Neutral
STOCH
92.68
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 16.54 is above the 20-day moving average (MA) of 16.23, above the 50-day MA of 15.70, and above the 200-day MA of 15.28, indicating a bullish trend. The MACD of 0.17 indicates Negative momentum. The RSI at 60.56 is Neutral, neither overbought nor oversold. The STOCH value of 92.68 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 (54)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$339.24M21.3010.21%7.58%-1.22%-6.54%
NRNRC
70
Outperform
$342.24M14.5872.68%3.19%-4.15%-17.17%
65
Neutral
$357.86M-10.98%3.15%61.71%
60
Neutral
$285.37M-19.80%4.88%37.87%
DHDH
57
Neutral
$547.31M-86.36%-3.04%-152.59%
54
Neutral
$5.31B3.26-45.10%2.79%16.76%0.02%
50
Neutral
$650.22M-198.69%-3.33%-86.58%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SPOK
Spok Holdings
16.54
2.99
22.07%
TBRG
TruBridge
24.17
13.52
126.95%
NRC
National Research
15.62
-9.49
-37.79%
HCAT
Health Catalyst
4.16
-2.38
-36.39%
CTEV
Claritev
38.54
20.06
108.55%
DH
Definitive Healthcare Corp
3.66
-2.29
-38.49%

Spok Holdings Corporate Events

Business Operations and StrategyFinancial Disclosures
Spok Holdings Highlights Strategic Goals in Investor Presentation
Positive
May 5, 2025

On May 5, 2025, Spok Holdings, Inc. released an investor presentation highlighting its strategic goals and financial performance. The company emphasized its strong balance sheet, significant free cash flow generation, and commitment to returning capital to shareholders. Spok also outlined its growth strategy, which includes expanding its software operations and stabilizing wireless revenue. The company continues to lead in healthcare communications, earning top client satisfaction scores and a top-rated spot in a new category for critical alert messaging solutions.

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.