Should I exit my Radcom (NASDAQ:RDCM) holdings?

RDCM Stock

USD 10.92 0.32 3.02%

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Radcom is scheduled to announce its earnings today. As many baby boomers are still indifferent towards communication services space, it makes sense to summarize Radcom as a unique choice for millenniums. I will address a few possible reasons stakeholders do not currently respect this stock. Here we also measure the ability of Radcom to meet its long-term debt obligations, such as interest payments on debt, the final principal payment on the debt, and any other fixed obligations like lease payments.

Published over two months ago

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The company currently holds 1.38 M in liabilities with Debt to Equity (D/E) ratio of 0.02, which may suggest the firm is not taking enough advantage from borrowing.

The company holds a Beta of 0.1147, which implies not very significant fluctuations relative to the market. Let's try to break down what Radcom's beta means in this case. As returns on the market increase, Radcom returns are expected to increase less than the market. However, during the bear market, the loss on holding Radcom will be expected to be smaller as well. Even though it is essential to pay attention to Radcom current trending patterns, it is always good to be careful when utilizing equity existing price patterns. Our philosophy towards forecasting any stock's future performance is to check both, its past performance charts as well as the business as a whole, including all available technical indicators. Radcom exposes twenty-eight different technical indicators, which can help you to evaluate its performance. Radcom has an expected return of -0.18%. Please be advised to check Radcom jensen alpha, semi variance, day typical price, as well as the relationship between the maximum drawdown and accumulation distribution to decide if Radcom performance from the past will be repeated at some point in the near future.

Should I exit my Radcom (NASDAQ:RDCM) holdings?

Radcom financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of Radcom, including all of Radcom's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Radcom assets, the company is considered highly leveraged. Understanding the composition and structure of overall Radcom debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it.

Please read more on our technical analysis page.

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 does Radcom utilize 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.

Is Radcom valued accurately by the market?

Radcom reported the previous year's revenue of 43.14 M. Net Loss for the year was (4.26 M) with profit before overhead, payroll, taxes, and interest of 28.86 M.

Momentum Analysis of Radcom suggests possible reversal in December

The value at risk is down to -2.28 as of today.

As of the 10th of November, Radcom holds the risk adjusted performance of (0.22), and Coefficient Of Variation of (627.88). 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 10.51 per share. Given that Radcom has jensen alpha of (0.23), we recommend you to check out Radcom's recent market performance to make sure the company can sustain itself at a future point.

Our Conclusion on Radcom

While many of the other players in the telecom services industry are either recovering or due for a correction, Radcom may not be performing as strong as the other in terms of long-term growth potentials. With a relatively neutral outlook on the new economy, it is better to hold off any trading of Radcom as the current risk-reward utility is not appealing enough. 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.

Editorial Staff

Vlad Skutelnik is a Macroaxis Contributor. Vlad covers stocks, funds, cryptocurrencies, and ETFs that are traded in North America, focusing primarily on fundamentals, valuation and market volatility. He has many years of experience in fintech, predictive investment analytics, and risk management. View Profile

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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