Weave Communications (WEAV) AI Stock Analysis

• Market Cap: $507.17M
• Dividend Yield: N/A
• Average Volume (3M): 1.35M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.60
• Revenue Growth: 17.34%
• EPS Growth: -8.35%
• Country: US
• Employees: 854
• Sector: Healthcare
• Sector Strength: 45
• Industry: Software - Application
• EPS (TTM): 0.02
• Shares Outstanding: 78,025,760
• 10 Day Avg. Volume: 1,791,546
• 30 Day Avg. Volume: 1,346,436
• PEG Ratio: 3.09
• Price to Book (P/B): 17.03
• Price to Sales (P/S): 5.58
• P/FCF Ratio: 95.35
• Enterprise Value/Market Cap: 0.98
• Enterprise Value/Revenue: 2.16
• Enterprise Value/Gross Profit: 3.00
• Enterprise Value/Ebitda: -37.38
• 1Y Price Target: $9.67
• Price Target Upside: 48.77% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 56 Neutral
• Price Target: $6.50 ▲(0.00% Upside)

The score is primarily held back by continued losses and weak profitability despite improving cash flow, while technical momentum is constructive and the latest earnings call was notably positive with raised guidance. Valuation is pressured by the negative P/E and no dividend support.

Positive Factors

Recurring subscription model & integrations

A subscription-first, tiered pricing model with add-ons produces durable recurring revenue and predictable cash flows. Strategic integrations with CRM/marketing partners deepen product stickiness, enable cross-sell, and increase switching costs across SMB verticals, supporting sustainable revenue retention and growth.

High gross margins and improving free cash flow

A ~73% gross margin reflects software economics and strong unit economics that scale with revenue. Positive free cash flow, and reported FCF growth, indicate improving cash conversion; together they provide a durable path to operating leverage and the ability to fund growth without immediately relying on external capital.

Healthcare specialty traction and large account wins

Winning a 600+ location specialty medical contract and record specialty vertical performance signal ability to penetrate higher-value, enterprise-like SMB accounts. Vertical specialization raises switching costs, increases ARR visibility, and creates scalable growth channels less reliant on small transaction customers.

Negative Factors

Persistent net losses and negative profitability

Continued net losses and negative operating margins limit return generation for shareholders and constrain reinvestment flexibility. Until non-GAAP profitability and positive operating margins are sustained, capital allocation choices remain constrained and long-term shareholder value creation is uncertain.

Declining net revenue retention and churn in integrations

Weakening NRR and elevated churn tied to newer integrations point to product fit and pricing durability issues. If customers reduce spend or churn as integrations age, lifetime value falls and unit economics (LTV/CAC) deteriorate, undermining scalable, predictable revenue growth.

Free cash flow not yet sufficient; moderate leverage

Although FCF is improving, FCF still doesn't fully cover net losses and the balance sheet shows moderate leverage (debt/equity ~0.67). This limits the company's financial cushion for large investments or downturns and could pressure capital allocation until sustained positive cash generation is achieved.

Weave Communications Business Overview & Revenue Model

Company Description

Weave Communications, Inc. provides a customer communications and engagement software platform in the United States and Canada. Its platform enables small and medium-sized businesses to maximize the value of their customer interactions and minimize the time and effort spent on manual or mundane tasks. The company's products include Customized Phone System, a smarter phone system to identify whether incoming calls are from new or current customers, provide information at every call, and manages heavy call times; Weave Text Messaging to communicate with customers; Weave Missed Call Text to take action in real time upon notification of a missed call; Weave Team, a group messaging solution that helps businesses and their team members communicate with each other from their work stations; and Weave Mobile App to text customers, request payments, and receive and make calls. It also offers Weave Reviews to request, collect, monitor, and respond to reviews; Weave Email Marketing, an email system; Web Assistant Appointment Requests and Text Connect to interact with their existing and potential customers online directly through their websites; Weave Payments, a payment processing solution; Customer Insights to collect payments faster, improve personalized engagement with each customer, and recommend follow-up items; and Analytics to identify unscheduled treatments, canceled appointments, unpaid invoices, and other needs. In addition, the company provides Digital Forms to fill out critical information; and Scheduling to send automatic scheduling reminders through text message or email reminders. It serves customers in dental, optometry, veterinary, physical therapy, home services, audiology, medical specialty services, and podiatry industries. The company was formerly known as Recall Solutions, LLC and changed its name to Weave Communications, Inc. in October 2015. Weave Communications, Inc. was founded in 2008 and is headquartered in Lehi, Utah.

How the Company Makes Money

Weave Communications generates revenue primarily through subscription-based pricing models for its software services. The company offers tiered subscription plans that allow businesses to choose the level of features and services they need, which creates a steady stream of recurring revenue. Additionally, Weave earns money from add-on services, such as enhanced analytics and premium support options. The company has formed strategic partnerships with various industry players, including CRM and marketing software providers, which not only expand its reach but also create integrated solutions that add value for its customers. This integration helps drive customer retention and attracts new users, contributing significantly to its overall earnings.

Weave Communications Financial Statement Overview

Summary

Revenue growth and improving free cash flow are positives, supported by strong gross margins. However, ongoing net losses and negative profitability/ROE keep the score in the lower-middle range despite manageable leverage.

Income Statement

Weave Communications has shown consistent revenue growth, with a 4.06% increase in the TTM period. However, the company continues to operate at a loss, reflected in negative net profit and EBIT margins. The gross profit margin remains strong at over 71%, indicating effective cost management in production. Despite these strengths, the persistent negative profitability metrics highlight ongoing challenges in achieving operational efficiency.

Balance Sheet

The balance sheet shows a moderate debt-to-equity ratio of 0.67 in the TTM period, indicating manageable leverage. However, the company has negative return on equity, reflecting ongoing losses and challenges in generating returns for shareholders. The equity ratio is not explicitly calculated, but the company maintains a reasonable level of equity relative to its assets, suggesting some financial stability.

Cash Flow

Weave Communications has improved its cash flow position, with a 12.84% growth in free cash flow in the TTM period. The operating cash flow to net income ratio is positive, indicating some ability to convert earnings into cash. However, the free cash flow to net income ratio remains below 1, suggesting that while cash flow is improving, it is not yet sufficient to cover net losses fully.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	229.79M	204.31M	170.47M	142.12M	115.87M	79.90M
Gross Profit	165.28M	145.88M	116.09M	88.84M	66.50M	45.45M
EBITDA	-13.26M	-11.17M	-13.02M	-31.55M	-38.31M	-29.90M
Net Income	-32.91M	-28.35M	-31.03M	-49.74M	-51.69M	-40.42M
Balance Sheet
Total Assets	206.46M	188.93M	201.01M	208.35M	187.49M	92.97M
Cash, Cash Equivalents and Short-Term Investments	80.29M	99.13M	108.84M	113.34M	136.00M	55.70M
Total Debt	53.05M	56.06M	59.54M	73.56M	25.04M	18.44M
Total Liabilities	127.85M	121.96M	122.06M	125.13M	75.18M	54.98M
Stockholders Equity	78.62M	66.97M	78.96M	83.22M	112.30M	37.99M
Cash Flow
Free Cash Flow	16.15M	11.96M	6.53M	-15.89M	-30.18M	-19.38M
Operating Cash Flow	17.97M	14.15M	10.22M	-12.77M	-20.37M	-15.52M
Investing Cash Flow	5.10M	8.88M	-7.74M	-54.03M	-9.81M	-3.86M
Financing Cash Flow	-9.78M	-22.19M	-13.72M	-7.21M	110.48M	-5.15M

Weave Communications Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WEAV, the sentiment is Negative. The current price of 6.5 is below the 20-day moving average (MA) of 6.95, below the 50-day MA of 6.76, and below the 200-day MA of 7.79, indicating a bearish trend. The MACD of -0.08 indicates Positive momentum. The RSI at 41.35 is Neutral, neither overbought nor oversold. The STOCH value of 25.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WEAV.

Weave Communications Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RDVT	73 Outperform	$640.73M	59.05	11.58%	―	22.27%	117.93%
DJCO	69 Neutral	$807.85M	7.20	32.20%	―	10.54%	115.36%
MITK	66 Neutral	$453.90M	54.25	3.87%	―	4.42%	165.42%
DSP	65 Neutral	$737.97M	447.73	4.45%	―	22.97%	49.49%
WEAV	56 Neutral	$507.17M	-14.82	-44.64%	―	17.34%	-8.35%
CRNC	55 Neutral	$510.03M	-23.78	-12.83%	―	-24.05%	96.90%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%