RIBBON COMMUNICATIONS INC (RBBN) Stock Fundamental Analysis
NASDAQ:RBBN - Nasdaq - US7625441040 - Common Stock - Currency: USD
Overall RBBN gets a fundamental rating of 4 out of 10. We evaluated RBBN against 48 industry peers in the Communications Equipment industry. While RBBN is still in line with the averages on profitability rating, there are concerns on its financial 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.
In the past 5 years RBBN reported 4 times negative net income.
RBBN had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
RBBN has a Return On Assets (-3.89%) which is in line with its industry peers.
The Return On Equity of RBBN (-11.98%) is worse than 60.42% of its industry peers.
RBBN's Return On Invested Capital of 3.11% is fine compared to the rest of the industry. RBBN outperforms 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -3.89% | ||
| ROE | -11.98% | ||
| ROIC | 3.11% |
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
RBBN's Operating Margin of 3.78% is fine compared to the rest of the industry. RBBN outperforms 60.42% of its industry peers.
In the last couple of years the Operating Margin of RBBN has grown nicely.
The Gross Margin of RBBN (51.12%) is better than 66.67% of its industry peers.
In the last couple of years the Gross Margin of RBBN has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.78% | ||
| PM (TTM) | N/A | ||
| GM | 51.12% |
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), RBBN 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.
Compared to 1 year ago, RBBN has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of -0.45, we must say that RBBN is in the distress zone and has some risk of bankruptcy.
RBBN has a worse Altman-Z score (-0.45) than 70.83% of its industry peers.
RBBN has a debt to FCF ratio of 43.32. This is a negative value and a sign of low solvency as RBBN would need 43.32 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 43.32, RBBN is in line with its industry, outperforming 41.67% of the companies in the same industry.
RBBN has a Debt/Equity ratio of 0.88. This is a neutral value indicating RBBN is somewhat dependend on debt financing.
RBBN's Debt to Equity ratio of 0.88 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 | 0.88 | ||
| Debt/FCF | 43.32 | ||
| Altman-Z | -0.45 |
ROIC/WACC0.29
WACC10.88%
2.3 Liquidity
RBBN has a Current Ratio of 1.38. 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 Current ratio of 1.38. This is in the lower half of the industry: RBBN underperforms 75.00% of its industry peers.
RBBN has a Quick Ratio of 1.14. This is a normal value and indicates that RBBN is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of RBBN (1.14) is worse than 64.58% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.38 | ||
| Quick Ratio | 1.14 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 9.52% over the past year.
Measured over the past years, RBBN shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -12.59% on average per year.
RBBN shows a small growth in Revenue. In the last year, the Revenue has grown by 7.68%.
The Revenue has been growing by 8.17% on average over the past years. This is quite good.
EPS 1Y (TTM)9.52%
EPS 3Y-7.9%
EPS 5Y-12.59%
EPS Q2Q%0%
Revenue 1Y (TTM)7.68%
Revenue growth 3Y-0.44%
Revenue growth 5Y8.17%
Sales Q2Q%14.52%
3.2 Future
Based on estimates for the next years, RBBN will show a quite strong growth in Earnings Per Share. The EPS will grow by 19.50% on average per year.
Based on estimates for the next years, RBBN will show a small growth in Revenue. The Revenue will grow by 5.83% on average per year.
EPS Next Y6.08%
EPS Next 2Y19.5%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year6.14%
Revenue Next 2Y5.83%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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
RBBN is valuated correctly with a Price/Earnings ratio of 16.67.
Compared to the rest of the industry, the Price/Earnings ratio of RBBN indicates a somewhat cheap valuation: RBBN is cheaper than 75.00% of the companies listed in the same industry.
RBBN's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.93.
RBBN is valuated reasonably with a Price/Forward Earnings ratio of 10.74.
Based on the Price/Forward Earnings ratio, RBBN is valued cheaply inside the industry as 89.58% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of RBBN to the average of the S&P500 Index (35.31), we can say RBBN is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.67 | ||
| Fwd PE | 10.74 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of RBBN indicates a somewhat cheap valuation: RBBN is cheaper than 77.08% of the companies listed in the same industry.
RBBN's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 87.46 | ||
| EV/EBITDA | 10.32 |
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)2.74
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 |
NASDAQ:RBBN (8/15/2025, 1:14:47 PM)
3.835
-0.12 (-2.91%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners73.4%
Inst Owner Change0.55%
Ins Owners2.6%
Ins Owner Change9.94%
Market Cap679.10M
Analysts81.54
Price Target6.2 (61.67%)
Short Float %1.88%
Short Ratio4.88
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)-2.96%
Min Revenue beat(2)-7.27%
Max Revenue beat(2)1.35%
Revenue beat(4)2
Avg Revenue beat(4)-1.9%
Min Revenue beat(4)-7.27%
Max Revenue beat(4)1.35%
Revenue beat(8)2
Avg Revenue beat(8)-4.4%
Revenue beat(12)2
Avg Revenue beat(12)-3.88%
Revenue beat(16)2
Avg Revenue beat(16)-4.18%
PT rev (1m)3.11%
PT rev (3m)3.11%
EPS NQ rev (1m)-18%
EPS NQ rev (3m)-12.4%
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)-2.71%
Revenue NQ rev (3m)-1.73%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)-0.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.67 | ||
| Fwd PE | 10.74 | ||
| P/S | 0.79 | ||
| P/FCF | 87.46 | ||
| P/OCF | 15.95 | ||
| P/B | 1.83 | ||
| P/tB | N/A | ||
| EV/EBITDA | 10.32 |
EPS(TTM)0.23
EY6%
EPS(NY)0.36
Fwd EY9.31%
FCF(TTM)0.04
FCFY1.14%
OCF(TTM)0.24
OCFY6.27%
SpS4.88
BVpS2.09
TBVpS-0.54
PEG (NY)2.74
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -3.89% | ||
| ROE | -11.98% | ||
| ROCE | 3.94% | ||
| ROIC | 3.11% | ||
| ROICexc | 3.36% | ||
| ROICexgc | 8.53% | ||
| OM | 3.78% | ||
| PM (TTM) | N/A | ||
| GM | 51.12% | ||
| FCFM | 0.9% |
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 Turnover0.76
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.88 | ||
| Debt/FCF | 43.32 | ||
| Debt/EBITDA | 3.46 | ||
| Cap/Depr | 56.27% | ||
| Cap/Sales | 4.03% | ||
| Interest Coverage | 0.82 | ||
| Cash Conversion | 45.04% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.38 | ||
| Quick Ratio | 1.14 | ||
| Altman-Z | -0.45 |
F-Score6
WACC10.88%
ROIC/WACC0.29
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)9.52%
EPS 3Y-7.9%
EPS 5Y-12.59%
EPS Q2Q%0%
EPS Next Y6.08%
EPS Next 2Y19.5%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)7.68%
Revenue growth 3Y-0.44%
Revenue growth 5Y8.17%
Sales Q2Q%14.52%
Revenue Next Year6.14%
Revenue Next 2Y5.83%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y127.01%
EBIT growth 3Y15.6%
EBIT growth 5Y45.12%
EBIT Next Year31.6%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y268.8%
FCF growth 3Y135.34%
FCF growth 5Y-9.42%
OCF growth 1Y545.27%
OCF growth 3Y37.8%
OCF growth 5Y-2.04%