Radcom Ltd (NASDAQ: RDCM)

Sector: Communication Services Industry: Telecom Services CIK: 0001016838
Market Cap 195.74 Mn
P/B 1.72
P/E 16.32
P/S 2.74
ROIC (Qtr) 7.18
Div Yield % 0.00
Rev 1y % (Qtr) 15.94
Total Debt (Qtr) 3.23 Mn
Debt/Equity (Qtr) 0.03
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About

RADCOM Ltd., also known by its stock symbol RDCM, operates in the telecommunications industry, specifically providing assurance solutions for operators transitioning to 5G and cloud-native networks. The company's offerings provide end-to-end network visibility, service assurance, and network insights, enabling operators to manage their networks efficiently and deliver high-quality services to their customers. RADCOM's main business activities involve developing and marketing cloud-native assurance solutions that support the transition to 5G and...

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Investment thesis

Bull case

  • Healthy cash reserves of 30.49M provide 27.74x coverage of short-term debt 1.10M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 142.71M provides 44.13x coverage of total debt 3.23M, indicating robust asset backing and low credit risk.
  • Tangible assets of 142.71M provide exceptional 129.73x coverage of deferred revenue 1.10M, showing strong service capability backing.
  • Short-term investments of 79.44M provide solid 4.12x coverage of other current liabilities 19.30M, indicating strong liquidity.
  • Tangible assets of 142.71M provide robust 7.40x coverage of other current liabilities 19.30M, indicating strong asset backing.

Bear case

  • Investment activities of 0 provide weak support for R&D spending of 19.88M, which is 0x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • High receivables of 25.15M relative to inventory of 318000 (79.08 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Operating cash flow of 0 provides insufficient coverage of deferred revenue obligations of 1.10M, which is 0x, raising concerns about future service delivery capabilities.
  • Short-term investments of 79.44M represent 0.73x of working capital 109.49M, suggesting potentially excessive financial asset allocation versus operational needs.
  • Operating cash flow of 0 provides minimal 0x coverage of tax expenses of 595000, suggesting potential tax planning inefficiencies or unsustainable tax positions.

Product and Service Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Telecom Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 TMUS T-Mobile US, Inc. 247.58 Bn 22.52 2.80 118.74 Bn
2 T At&T Inc. 210.50 Bn 12.86 1.15 155.04 Bn
3 VZ Verizon Communications Inc 202.20 Bn 11.00 1.54 181.64 Bn
4 CMCSA Comcast Corp 180.83 Bn 58.43 5.08 98.94 Bn
5 VOD Vodafone Group Public Ltd Co 44.88 Bn 3.20 0.62 60.54 Bn
6 CHT Chunghwa Telecom Co Ltd 33.41 Bn 26.87 4.32 1.20 Bn
7 SATS EchoStar CORP 32.60 Bn -2.52 2.15 30.58 Bn
8 CHTR Charter Communications, Inc. /Mo/ 32.03 Bn 6.42 0.58 96.20 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.24 0.87
EV to Cash from Ops. EV/CFO 15.80 7.73
EV to Debt EV to Debt 55.63 40.31
EV to EBIT EV/EBIT 21.67 2.24
EV to EBITDA EV/EBITDA 47.77 2.53
EV to Free Cash Flow [EV/FCF] EV/FCF 16.41 33.34
EV to Market Cap EV to Market Cap 0.92 1.71
EV to Revenue EV/Rev 2.52 5.12
Price to Book Value [P/B] P/B 1.72 2.16
Price to Earnings [P/E] P/E 16.32 76.35
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -0.17
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 2.05
Dividend per Basic Share Div per Share (Qtr) 0.00 0.79
FCF Dividend Payout Ratio % FCF Dividend Payout Ratio % 0.00 8.04
Interest Coverage Int. cover (Qtr) -1.94 -2.53
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex Growth (1y) % 0.00 19.27
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 58.43 61.85
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -2.07
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 164.86 373.65
EBITDA Growth (1y) % EBITDA Growth (1y) % 0.00 192.47
EBIT Growth (1y) % EBIT 1y % (Qtr) 168.97 814.56
EBT Growth (1y) % EBT 1y % (Qtr) 74.76 -29.03
EPS Growth (1y) % EPS 1y % (Qtr) 68.18 141.81
FCF Growth (1y) % FCF Growth (1y) % 0.00 78.17
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 19.97 -10.71
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.49 0.60
Cash Payout Ratio Cash Payout Ratio 0.00 0.06
Cash Ratio Cash Ratio (Qtr) 1.32 0.68
Current Ratio Curr Ratio (Qtr) 5.76 1.56
Debt to Equity Ratio Debt/Equity (Qtr) 0.03 -0.46
Interest Cover Ratio Int Coverage (Qtr) -1.94 -2.53
Times Interest Earned Times Interest Earned (Qtr) -1.94 -2.53
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % 0.00 46.49
EBIT Margin % EBIT Margin % (Qtr) 11.61 -51.60
EBT Margin % EBT Margin % (Qtr) 17.60 27.73
Gross Margin % Gross Margin % (Qtr) 76.00 55.49
Net Profit Margin % Net Margin % (Qtr) 16.80 26.33