Radcom Story

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RDCM -- USA Stock  

USD 9.86  0.04  0.41%

While some baby boomers are getting worried about communication services space, it is reasonable to summarize Radcom. Why are we still confident in hope for a quick recovery. Here I will also expose some primary fundamental factors affecting Radcom's services, and outline how it will impact the outlook for investors this year.
Published over a week ago
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What are the odds of Radcom to pull down in March?
The company reported the previous year's revenue of 36.34 M. Net Loss for the year was (4.62 M) with profit before overhead, payroll, taxes, and interest of 23.09 M. The company has Profit Margin (PM) of (12.72) %, which may suggest that it does not properly executes on its current pricing strategies or is unable to control all of the operational costs. This is way below average. Similarly, it shows Operating Margin (OM) of (14.6) %, which suggests for every $100 dollars of sales, it generated a net operating loss of -0.15.

How important is Radcom's Liquidity

Radcom financial leverage refers to using borrowed capital as a funding source to finance Radcom ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Radcom financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Radcom's total debt and its cash.

How Radcom utilizes its cash?

To perform a cash flow analysis of Radcom, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Radcom is receiving and how much cash it distributes out in a given period. The Radcom cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.

A Deeper Perspective

Radcom has a total of 13.94 Million outstanding shares. Radcom has significant amount of outstanding shares owned by insiders. An insider is usually defined as a CEO, other corporate executive, director, or institutional investor who own at least 10% of the company outstanding shares. Since such a large part of the company is owned by insiders, it is advisable to analyze if each of these insiders have been buying or selling the stock in recent months. Remember, it does not matter who owns the company or if the company is currently losing money. If the true value of the company is more than the market pays for it currently, you can still have a good investment opportunity.

Ownership Breakdown

Retail Investors
42.48%
Insiders
23.15%
Institutions
34.37%
Retail Investors42.48
Insiders23.15
Institutions34.37

The case for Radcom pull down maybe to hold

The semi deviation is down to 2.47 as of today. Radcom shows above-average downside volatility for the selected time horizon. We advise investors to inspect Radcom further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Radcom future alpha.

Our Conclusion on Radcom

While some firms in the telecom services industry are either recovering or due for a correction, Radcom may not be as strong as the others in terms of longer-term growth potentials. To summarize, as of the 17th of February 2021, our analysis shows that Radcom follows the market closely. The company is undervalued and projects very low odds of distress for the next 2 years. Our actual 30 days buy vs. sell advice on the company is Strong Hold.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Radcom. Please refer to our Terms of Use for any information regarding our disclosure principles.

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