Mind Cti Ltd (NASDAQ: MNDO)

Sector: Technology Industry: Software - Application CIK: 0001119083
Market Cap 27.36 Mn
P/B 1.23
P/E 9.46
P/S 1.38
ROIC (Qtr) 10.20
Div Yield % 17.89
Rev 1y % (Qtr) -7.39
Total Debt (Qtr) 961,000.00
Debt/Equity (Qtr) 0.04

About

MIND CTI Ltd., known by its ticker symbol MNDO, operates in the telecommunications industry, providing software solutions to communication service providers and enterprise customers. The company's main business activities include developing, manufacturing, marketing, and implementing convergent billing and customer care software solutions. MIND CTI primarily targets tier 2 and tier 3 service providers and enterprise customers. The company generates revenue through the sale of licenses and provision of services, such as professional services, customer...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 3.08M provides robust 3.21x coverage of total debt 961000, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 5.19M provide 16.63x coverage of short-term debt 312000, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 17.98M provides 18.71x coverage of total debt 961000, indicating robust asset backing and low credit risk.
  • Operating cash flow of 3.08M provides strong 14.26x coverage of stock compensation 216000, indicating sustainable incentive practices.
  • Robust free cash flow of 3.06M exceeds capital expenditure of 23000 by 132.96x, indicating strong organic growth funding capability.

Bear case

  • Operating cash flow of 3.08M barely covers its investment activities of 3.89M, with a coverage ratio of 0.79, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of 3.89M provide weak support for R&D spending of 3.81M, which is 1.02x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 3.08M provides insufficient coverage of deferred revenue obligations of 2.34M, which is 1.32x, raising concerns about future service delivery capabilities.
  • Tax assets of 153000 provide limited offset against tax liabilities of 428000, which is 0.36x, indicating potential future cash flow pressure from tax obligations.
  • Tangible assets of 17.98M provide limited backing for working capital of 10.98M, which is 1.64x, suggesting increased operational risk in market downturns.

Product and Service Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Software - Application
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SAP Sap Se 281.21 Bn 33.75 6.55 10.73 Bn
2 CRM Salesforce, Inc. 248.88 Bn 34.46 6.17 11.14 Bn
3 SHOP Shopify Inc. 217.18 Bn 121.94 20.30 1.12 Bn
4 UBER Uber Technologies, Inc 182.87 Bn 10.99 3.69 12.19 Bn
5 INTU Intuit Inc. 182.36 Bn 44.28 9.38 6.78 Bn
6 NOW ServiceNow, Inc. 151.53 Bn 87.54 11.96 2.40 Bn
7 ADBE Adobe Inc. 146.69 Bn 21.08 6.33 6.64 Bn
8 ADP Automatic Data Processing Inc 108.05 Bn 26.12 5.17 9.77 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.87 2.68
EV to Cash from Ops. EV/CFO 8.32 13.34
EV to Debt EV to Debt 26.68 57.60
EV to EBIT EV/EBIT 7.99 19.20
EV to EBITDA EV/EBITDA 9.01 15.11
EV to Free Cash Flow [EV/FCF] EV/FCF 8.38 14.78
EV to Market Cap EV to Market Cap 0.94 -93.16
EV to Revenue EV/Rev 1.30 4.63
Price to Book Value [P/B] P/B 1.23 4.29
Price to Earnings [P/E] P/E 9.46 -132.44
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 -3.95
Dividend Payout Ratio % Div Payout % (Qtr) 169.20 4.25
Dividend per Basic Share Div per Share (Qtr) 0.22 0.15
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 148.65 2.52
Interest Coverage Int. cover (Qtr) 0.00 -52.32
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -27.78 -259.78
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 89.80 9,763.58
Dividend Growth (1y) % Div 1y % (Qtr) -8.33 1.61
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -40.07 -263.15
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -35.31 56.46
EBIT Growth (1y) % EBIT 1y % (Qtr) -36.78 -225.15
EBT Growth (1y) % EBT 1y % (Qtr) -36.78 -86.10
EPS Growth (1y) % EPS 1y % (Qtr) -48.00 123.84
FCF Growth (1y) % FCF 1y % (Qtr) -32.03 -36.82
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -4.90 95.08
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.67 0.58
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 1.20 3.75
Current Ratio Curr Ratio (Qtr) 3.53 8.16
Debt to Equity Ratio Debt/Equity (Qtr) 0.04 0.17
Interest Cover Ratio Int Coverage (Qtr) 0.00 -52.32
Times Interest Earned Times Interest Earned (Qtr) 0.00 -52.32
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 17.50 -100.06
EBIT Margin % EBIT Margin % (Qtr) 16.23 -164.24
EBT Margin % EBT Margin % (Qtr) 16.23 -116.94
Gross Margin % Gross Margin % (Qtr) 51.10 58.20
Net Profit Margin % Net Margin % (Qtr) 14.60 -121.65