RIBBON COMMUNICATIONS INC (RBBN)
US7625441040 - Common Stock
We assign a fundamental rating of 3 out of 10 to RBBN. RBBN was compared to 54 industry peers in the Communications Equipment industry. Both the profitability and financial health of RBBN have multiple concerns. RBBN has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
RBBN had positive earnings in the past year.
RBBN had a positive operating cash flow in the past year.
In the past 5 years RBBN reported 4 times negative net income.
Of the past 5 years RBBN 4 years had a positive operating cash flow.
1.2 Ratios
The Return On Assets of RBBN (-5.40%) is comparable to the rest of the industry.
Looking at the Return On Equity, with a value of -13.72%, RBBN is doing worse than 61.11% of the companies in the same industry.
With a decent Return On Invested Capital value of 1.73%, RBBN is doing good in the industry, outperforming 61.11% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -5.4% | ||
| ROE | -13.72% | ||
| ROIC | 1.73% |
ROA(3y)-8.92%
ROA(5y)-7.4%
ROE(3y)-22.39%
ROE(5y)-16.24%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
With a decent Operating Margin value of 1.54%, RBBN is doing good in the industry, outperforming 61.11% of the companies in the same industry.
RBBN's Gross Margin of 51.07% is fine compared to the rest of the industry. RBBN outperforms 75.93% of its industry peers.
RBBN's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 1.54% | ||
| PM (TTM) | N/A | ||
| GM | 51.07% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-2.59%
GM growth 5Y-1.53%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so 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 an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of -0.86, we must say that RBBN is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of -0.86, RBBN is doing worse than 72.22% of the companies in the same industry.
RBBN has a debt to FCF ratio of 35.20. This is a negative value and a sign of low solvency as RBBN would need 35.20 years to pay back of all of its debts.
RBBN has a Debt to FCF ratio (35.20) which is in line with its industry peers.
A Debt/Equity ratio of 0.13 indicates that RBBN is not too dependend on debt financing.
RBBN has a Debt to Equity ratio (0.13) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.13 | ||
| Debt/FCF | 35.2 | ||
| Altman-Z | -0.86 |
ROIC/WACC0.17
WACC10.05%
2.3 Liquidity
RBBN has a Current Ratio of 0.73. This is a bad value and indicates that RBBN is not financially healthy enough and could expect problems in meeting its short term obligations.
RBBN has a Current ratio of 0.73. This is amonst the worse of the industry: RBBN underperforms 96.30% of its industry peers.
A Quick Ratio of 0.57 indicates that RBBN may have some problems paying its short term obligations.
With a Quick ratio value of 0.57, RBBN is not doing good in the industry: 94.44% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.73 | ||
| Quick Ratio | 0.57 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 33.33% 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 -19.73% on average per year.
Looking at the last year, RBBN shows a decrease in Revenue. The Revenue has decreased by -1.55% in the last year.
Measured over the past years, RBBN shows a small growth in Revenue. The Revenue has been growing by 7.41% on average per year.
EPS 1Y (TTM)33.33%
EPS 3Y-22.61%
EPS 5Y-19.73%
EPS growth Q2Q50%
Revenue 1Y (TTM)-1.55%
Revenue growth 3Y-0.69%
Revenue growth 5Y7.41%
Revenue growth Q2Q-3.51%
3.2 Future
The Earnings Per Share is expected to grow by 41.89% on average over the next years. This is a very strong growth
RBBN is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.15% yearly.
EPS Next Y46.29%
EPS Next 2Y41.89%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year2.59%
Revenue Next 2Y4.15%
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
The Price/Earnings ratio is 16.05, which indicates a correct valuation of RBBN.
Compared to the rest of the industry, the Price/Earnings ratio of RBBN indicates a somewhat cheap valuation: RBBN is cheaper than 68.52% of the companies listed in the same industry.
RBBN is valuated rather cheaply when we compare the Price/Earnings ratio to 28.06, which is the current average of the S&P500 Index.
RBBN is valuated reasonably with a Price/Forward Earnings ratio of 8.39.
Based on the Price/Forward Earnings ratio, RBBN is valued cheaper than 88.89% of the companies in the same industry.
RBBN's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 20.72.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.05 | ||
| Fwd PE | 8.39 |
4.2 Price Multiples
74.07% 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 | 68.52 | ||
| EV/EBITDA | 9.79 |
4.3 Compensation for Growth
RBBN's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
RBBN's earnings are expected to grow with 41.89% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.35
PEG (5Y)N/A
EPS Next 2Y41.89%
EPS Next 3YN/A
5. Dividend
5.1 Amount
No dividends for RBBN!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
RIBBON COMMUNICATIONS INC
NASDAQ:RBBN (5/2/2024, 7:15:53 PM)
After market: 3.21 0 (0%)3.21
+0.02 (+0.63%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryCommunications Equipment
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap553.60M
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
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Min Revenue beat(4)
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Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
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Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.05 | ||
| Fwd PE | 8.39 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.35
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -5.4% | ||
| ROE | -13.72% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 1.54% | ||
| PM (TTM) | N/A | ||
| GM | 51.07% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.76
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.13 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.73 | ||
| Quick Ratio | 0.57 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)33.33%
EPS 3Y-22.61%
EPS 5Y
EPS growth Q2Q
EPS Next Y46.29%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-1.55%
Revenue growth 3Y-0.69%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y