Should we be acquiring Verizon or Radcom?

While some of us are excited about communication services space, we will evaluate how steady are Radcom and Verizon Communications fundamentals. We are going to summarize some of the competitive aspects of both Radcom and Verizon.
Published over a year ago
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Reviewed by Raphi Shpitalnik

By analyzing existing fundamental indicators between Radcom and Verizon, you can compare the effects of market volatilities on both companies' prices and check if they can diversify away market risk if combined in one of your portfolios. You can also utilize pair trading strategies for matching a long position in Verizon with a short position in Radcom. Check out our pair correlation module for more information.

Let's begin by analyzing the assets.
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Radcom has an asset utilization ratio of 186.54 percent. This denotes that the company is making $1.87 for each dollar of assets. An increasing asset utilization means that Radcom is more efficient with each dollar of assets it utilizes for everyday operations.
Out of tens of thousands of stocks, funds, and ETFs that trade on global exchanges each represent an individual company which you can analyze using comparative analysis. To determine which one of the two entities, such as Radcom or Desktop is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.

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. Financial leverage can amplify the potential profits to Radcom's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Radcom's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Radcom's total debt and its cash.

Correlation Between Radcom and Desktop Metal

In general, Stock analysis is a method for investors and traders to make individual buying and selling decisions. Stock correlation analysis is also essential because it can help investors realize that they may not be as diversified as they think. Risk management strategies are usually required to make sure all portfolios are properly aligned against their risk tolerance level. You can consider holding Radcom together with similar or unrelated positions with a negative correlation. For example, you can also add Desktop Metal to your portfolio. If Desktop Metal is not perfectly correlated to Radcom it will diversify some of the market risks out of the positively correlated stocks in your portfolio. However, the disadvantage of this sort of hedging is that it can potentially affect your investment returns throughout market cycles. When Radcom, for example, performs excellent and delivers stable returns, the negatively correlated position you locked in as a hedge may drag your returns down.
Are you currently holding both Radcom and Desktop Metal in your portfolio? Please note if you are using this as a pair-trade strategy between Radcom and Desktop Metal, watch out for correlation discrepancy over time. Relying on the historical price correlations and assuming that it will not change may lead to short-term losses. Please check pair correlation details between RDCM and DM for more information.

Is Radcom valued appropriately by the market?

Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include product or services discounts, promotions, as well as early payments on invoices or services rendered in advance.

Revenue Breakdown

Now, let's check Radcom revenue. Based on the latest financial disclosure, Radcom reported 37.56 M of revenue. This is 99.74% lower than that of the Communication Services sector and 99.83% lower than that of the Telecom Services industry. The revenue for all United States stocks is 99.6% higher than that of Radcom. As for Verizon Communications we see revenue of 129.55 B, which is much higher than that of the Telecom Services
VZ
129.6 B
RDCM37.56 Million0.027
Sector9.43 Billion6.79
VZ129.55 Billion93.19

Will Radcom pull back in June 2021?

The treynor ratio is down to -0.23 as of today.
As of the 11th of May 2021, Radcom holds the risk adjusted performance of (0.029658), and Coefficient Of Variation of (1,950). Compared to fundamental indicators, the technical analysis model allows you to check existing technical drivers of Radcom, as well as the relationship between them. Put it differently, you can use this information to find out if the company will indeed mirror its model of past market data, or the prices will eventually revert. We were able to break down nineteen technical drivers for Radcom, which can be compared to its competitors. Please check Radcom variance, as well as the relationship between the maximum drawdown and semi variance to decide if Radcom is priced some-what accurately, providing market reflects its current price of 9.6 per share. Given that Radcom has jensen alpha of (0.25), we recommend you to check out Radcom's recent market performance to make sure the company can sustain itself at a future point.

Our Final Take On Radcom

While many of the other players within the telecom services industry are still a little expensive, even after the recent corrections, Radcom may offer a potential longer-term growth to stakeholders. With an impartial outlook on the current market volatility, it may be better to hold off any inventment activity and neither buy nor drop any shares of Radcom at this time. The Radcom risk-reward trade off is not appealing enough to do any trading. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Radcom.

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Editorial Staff

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 Vlad Skutelnik do not own shares of Radcom. Please refer to our Terms of Use for any information regarding our disclosure principles.

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