RIBBON COMMUNICATIONS INC (RBBN) Stock Fundamental Analysis
NASDAQ:RBBN - Nasdaq - US7625441040 - Common Stock - Currency: USD
We assign a fundamental rating of 3 out of 10 to RBBN. RBBN was compared to 48 industry peers in the Communications Equipment industry. RBBN may be in some trouble as it scores bad on both profitability and health. RBBN has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year RBBN was profitable.
In the past year RBBN had a positive cash flow from operations.
RBBN had negative earnings in 4 of the past 5 years.
Of the past 5 years RBBN 4 years had a positive operating cash flow.
1.2 Ratios
RBBN's Return On Assets of -4.40% is in line compared to the rest of the industry. RBBN outperforms 45.83% of its industry peers.
RBBN has a worse Return On Equity (-13.12%) than 60.42% of its industry peers.
The Return On Invested Capital of RBBN (2.20%) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -4.4% | ||
| ROE | -13.12% | ||
| ROIC | 2.2% |
ROA(3y)-6.09%
ROA(5y)-5.14%
ROE(3y)-15.65%
ROE(5y)-13.53%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
Looking at the Operating Margin, with a value of 2.77%, RBBN is in line with its industry, outperforming 58.33% of the companies in the same industry.
RBBN's Operating Margin has improved in the last couple of years.
RBBN's Gross Margin of 51.46% is fine compared to the rest of the industry. RBBN outperforms 68.75% of its industry peers.
RBBN's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 2.77% | ||
| PM (TTM) | N/A | ||
| GM | 51.46% |
OM growth 3Y16.11%
OM growth 5Y34.16%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y0.05%
GM growth 5Y-1.31%
2. Health
2.1 Basic Checks
RBBN has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, RBBN has more shares outstanding
The number of shares outstanding for RBBN has been increased compared to 5 years ago.
The debt/assets ratio for RBBN is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of -0.48, we must say that RBBN is in the distress zone and has some risk of bankruptcy.
RBBN has a worse Altman-Z score (-0.48) than 70.83% of its industry peers.
RBBN has a debt to FCF ratio of 269.08. This is a negative value and a sign of low solvency as RBBN would need 269.08 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 269.08, RBBN is in line with its industry, outperforming 43.75% of the companies in the same industry.
RBBN has a Debt/Equity ratio of 0.86. This is a neutral value indicating RBBN is somewhat dependend on debt financing.
RBBN's Debt to Equity ratio of 0.86 is on the low side compared to the rest of the industry. RBBN is outperformed by 72.92% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.86 | ||
| Debt/FCF | 269.08 | ||
| Altman-Z | -0.48 |
ROIC/WACC0.2
WACC10.92%
2.3 Liquidity
A Current Ratio of 1.39 indicates that RBBN should not have too much problems paying its short term obligations.
RBBN has a worse Current ratio (1.39) than 68.75% of its industry peers.
RBBN has a Quick Ratio of 1.13. This is a normal value and indicates that RBBN is financially healthy and should not expect problems in meeting its short term obligations.
RBBN has a worse Quick ratio (1.13) than 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.39 | ||
| Quick Ratio | 1.13 |
3. Growth
3.1 Past
RBBN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 15.00%, which is quite good.
The earnings per share for RBBN have been decreasing by -12.59% on average. This is quite bad
Looking at the last year, RBBN shows a small growth in Revenue. The Revenue has grown by 1.91% in the last year.
Measured over the past years, RBBN shows a quite strong growth in Revenue. The Revenue has been growing by 8.17% on average per year.
EPS 1Y (TTM)15%
EPS 3Y-7.9%
EPS 5Y-12.59%
EPS Q2Q%-200%
Revenue 1Y (TTM)1.91%
Revenue growth 3Y-0.44%
Revenue growth 5Y8.17%
Sales Q2Q%0.9%
3.2 Future
The Earnings Per Share is expected to grow by 19.50% on average over the next years. This is quite good.
The Revenue is expected to grow by 5.78% on average over the next years.
EPS Next Y6.08%
EPS Next 2Y19.5%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year6.18%
Revenue Next 2Y5.78%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 16.87, RBBN is valued correctly.
Based on the Price/Earnings ratio, RBBN is valued a bit cheaper than the industry average as 72.92% of the companies are valued more expensively.
RBBN's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.19.
Based on the Price/Forward Earnings ratio of 10.87, the valuation of RBBN can be described as reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of RBBN indicates a rather cheap valuation: RBBN is cheaper than 87.50% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 35.33, RBBN is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.87 | ||
| Fwd PE | 10.87 |
4.2 Price Multiples
75.00% of the companies in the same industry are more expensive than RBBN, based on the Enterprise Value to EBITDA ratio.
RBBN's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 547.54 | ||
| EV/EBITDA | 11.37 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates RBBN does not grow enough to justify the current Price/Earnings ratio.
RBBN's earnings are expected to grow with 19.50% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.77
PEG (5Y)N/A
EPS Next 2Y19.5%
EPS Next 3YN/A
5. Dividend
5.1 Amount
No dividends for RBBN!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
3.88
-0.15 (-3.72%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners73.49%
Inst Owner Change0%
Ins Owners2.43%
Ins Owner Change9.95%
Market Cap684.98M
Analysts81.67
Price Target6.02 (55.15%)
Short Float %1.54%
Short Ratio4.07
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)N/A
Avg EPS beat(2)N/A
Min EPS beat(2)N/A
Max EPS beat(2)N/A
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)1
Avg Revenue beat(2)-3.06%
Min Revenue beat(2)-7.27%
Max Revenue beat(2)1.16%
Revenue beat(4)1
Avg Revenue beat(4)-4.2%
Min Revenue beat(4)-7.87%
Max Revenue beat(4)1.16%
Revenue beat(8)1
Avg Revenue beat(8)-4.82%
Revenue beat(12)1
Avg Revenue beat(12)-4.15%
Revenue beat(16)1
Avg Revenue beat(16)-4.59%
PT rev (1m)0%
PT rev (3m)-6.35%
EPS NQ rev (1m)6.66%
EPS NQ rev (3m)40.34%
EPS NY rev (1m)1.56%
EPS NY rev (3m)0%
Revenue NQ rev (1m)0.03%
Revenue NQ rev (3m)1.64%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)-0.41%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.87 | ||
| Fwd PE | 10.87 | ||
| P/S | 0.82 | ||
| P/FCF | 547.54 | ||
| P/OCF | 20.38 | ||
| P/B | 1.79 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.37 |
EPS(TTM)0.23
EY5.93%
EPS(NY)0.36
Fwd EY9.2%
FCF(TTM)0.01
FCFY0.18%
OCF(TTM)0.19
OCFY4.91%
SpS4.73
BVpS2.16
TBVpS-0.54
PEG (NY)2.77
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -4.4% | ||
| ROE | -13.12% | ||
| ROCE | 2.79% | ||
| ROIC | 2.2% | ||
| ROICexc | 2.41% | ||
| ROICexgc | 6.45% | ||
| OM | 2.77% | ||
| PM (TTM) | N/A | ||
| GM | 51.46% | ||
| FCFM | 0.15% |
ROA(3y)-6.09%
ROA(5y)-5.14%
ROE(3y)-15.65%
ROE(5y)-13.53%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3Y14.11%
ROICexcg growth 5Y27.22%
ROICexc growth 3Y23.03%
ROICexc growth 5Y37.6%
OM growth 3Y16.11%
OM growth 5Y34.16%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y0.05%
GM growth 5Y-1.31%
F-Score6
Asset Turnover0.73
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.86 | ||
| Debt/FCF | 269.08 | ||
| Debt/EBITDA | 3.83 | ||
| Cap/Depr | 51.55% | ||
| Cap/Sales | 3.87% | ||
| Interest Coverage | 0.64 | ||
| Cash Conversion | 39.1% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.39 | ||
| Quick Ratio | 1.13 | ||
| Altman-Z | -0.48 |
F-Score6
WACC10.92%
ROIC/WACC0.2
Cap/Depr(3y)22.21%
Cap/Depr(5y)24.26%
Cap/Sales(3y)1.85%
Cap/Sales(5y)2.15%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)15%
EPS 3Y-7.9%
EPS 5Y-12.59%
EPS Q2Q%-200%
EPS Next Y6.08%
EPS Next 2Y19.5%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)1.91%
Revenue growth 3Y-0.44%
Revenue growth 5Y8.17%
Sales Q2Q%0.9%
Revenue Next Year6.18%
Revenue Next 2Y5.78%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y83.91%
EBIT growth 3Y15.6%
EBIT growth 5Y45.12%
EBIT Next Year32.98%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y102.92%
FCF growth 3Y135.34%
FCF growth 5Y-9.42%
OCF growth 1Y210.91%
OCF growth 3Y37.8%
OCF growth 5Y-2.04%