Weave Communications (WEAV) AI Stock Analysis

• Market Cap: $593.18M
• Dividend Yield: N/A
• Average Volume (3M): 1.04M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.87
• Revenue Growth: 18.10%
• EPS Growth: 4.60%
• Country: US
• Employees: 854
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.02
• Shares Outstanding: 77,036,190
• 10 Day Avg. Volume: 736,017
• 30 Day Avg. Volume: 1,038,241
• 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: 1.02
• Enterprise Value/Revenue: 2.75
• Enterprise Value/Gross Profit: 3.83
• Enterprise Value/Ebitda: -56.97
• 1Y Price Target: $12.00
• Price Target Upside: 55.84% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 62 Neutral
• Price Target: $8.00 ▲(3.90% Upside)

Weave Communications' overall stock score reflects strong earnings call performance and revenue growth, offset by ongoing profitability challenges and a negative P/E ratio. Technical indicators suggest potential short-term weakness, while the absence of a dividend yield limits valuation appeal. The company's strategic initiatives and operational improvements are promising, but financial sustainability remains a key concern.

Positive Factors

Revenue Growth

Consistent revenue growth over multiple quarters indicates strong market demand and effective sales strategies, supporting long-term business expansion.

Gross Margin Improvement

Improved gross margins reflect operational efficiency and pricing power, enhancing profitability potential and competitive positioning in the market.

Strategic Acquisition

The acquisition expands Weave's capabilities in AI and automation, potentially driving innovation and offering competitive advantages in customer engagement solutions.

Negative Factors

Profitability Challenges

Ongoing losses and negative profitability metrics suggest operational inefficiencies, which could hinder financial sustainability and limit growth investments.

High Sales and Marketing Expenses

High sales and marketing costs may pressure margins and profitability, requiring careful management to ensure these investments translate into sustainable growth.

Integration Challenges

Integration challenges could delay the realization of synergies and benefits from the acquisition, potentially impacting operational efficiency and strategic goals.

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 through a subscription-based model, offering tiered pricing plans for its communication platform. Key revenue streams include monthly subscription fees from businesses utilizing its services, as well as additional charges for premium features such as advanced analytics, additional call minutes, and marketing tools. Partnerships with telecommunications providers and integrations with industry-specific software also contribute to its earnings, enhancing the value of its platform and expanding its customer base. The company's focus on customer retention and upselling additional services further bolsters its revenue growth.

Weave Communications Financial Statement Overview

Summary

Weave Communications shows strong revenue growth and gross profit margins, but profitability is a concern due to negative net income and EBIT. The balance sheet is stable with moderate leverage, but the declining equity ratio suggests increased liability dependency. Cash flow improvements are positive, though financial sustainability requires operational and profitability enhancements.

Income Statement

Weave Communications has shown consistent revenue growth, with the most recent TTM (Trailing-Twelve-Months) revenue increasing by 8.1% compared to the previous year. However, profitability remains a challenge, as indicated by negative EBIT and Net Income across periods. The company exhibits strong gross profit margins (71.8% TTM), but the negative net profit margin (-13.6% TTM) highlights ongoing operational inefficiencies.

Balance Sheet

The balance sheet reveals a moderate debt-to-equity ratio of 0.69, indicating manageable leverage. Stockholders' equity has been improving, reflecting growing total assets. However, the equity ratio has declined over the years, now at 38.6%, suggesting a higher reliance on liabilities. The positive return on equity (ROE) remains elusive due to persistent net losses.

Cash Flow

Cash flows are improving, with a notable increase in free cash flow by 19.7% in the latest period. The operating cash flow to net income ratio is positive, indicating cash generation capability despite losses. However, the reliance on financing activities in past years and recent negative investing cash flows may pose future challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	220.83M	204.31M	170.47M	142.12M	115.87M	79.90M
Gross Profit	158.67M	145.88M	116.09M	88.84M	66.50M	45.45M
EBITDA	-10.67M	-11.17M	-13.02M	-31.55M	-38.31M	-29.90M
Net Income	-30.13M	-28.35M	-31.03M	-49.74M	-51.69M	-40.42M
Balance Sheet
Total Assets	204.34M	188.93M	201.01M	208.35M	187.49M	92.97M
Cash, Cash Equivalents and Short-Term Investments	77.84M	99.13M	108.84M	113.34M	136.00M	55.70M
Total Debt	54.77M	56.06M	59.54M	73.56M	25.04M	18.44M
Total Liabilities	125.47M	121.96M	122.06M	125.13M	75.18M	54.98M
Stockholders Equity	78.88M	66.97M	78.96M	83.22M	112.30M	37.99M
Cash Flow
Free Cash Flow	14.31M	11.96M	6.53M	-15.89M	-30.18M	-19.38M
Operating Cash Flow	16.40M	14.15M	10.22M	-12.77M	-20.37M	-15.52M
Investing Cash Flow	-10.76M	8.88M	-7.74M	-54.03M	-9.81M	-3.86M
Financing Cash Flow	-12.63M	-22.19M	-13.72M	-7.21M	110.48M	-5.15M

Weave Communications Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 7.70
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• 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 7.7 is below the 20-day moving average (MA) of 7.71, above the 50-day MA of 7.67, and below the 200-day MA of 11.16, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 49.01 is Neutral, neither overbought nor oversold. The STOCH value of 33.82 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
VMEO	72 Outperform	1.29B	101.84	0.00%	―	-1.35%	-59.67%
VTEX	70 Neutral	831.57M	86.10	5.34%	―	4.51%	8241.83%
WEAV	62 Neutral	$593.18M	―	-40.52%	―	18.10%	4.60%
DSP	59 Neutral	589.85M	279.76	8.57%	―	30.92%	0.00%
CMRC	58 Neutral	400.45M	-23.06	-46.74%	―	4.06%	57.50%
BMBL	52 Neutral	720.79M	-0.98	-147.04%	―	-5.06%	-2318.18%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%