Ceragon Networks (CRNT) AI Stock Analysis

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Ceragon Networks

(NASDAQ:CRNT)

68Neutral

Ceragon Networks demonstrates strong revenue growth and strategic expansion in key markets, particularly India and North America. However, the stock is underperforming technically, and cash flow challenges may hinder its potential. Valuation metrics suggest it is undervalued, which, combined with strategic growth initiatives, could present a longer-term opportunity if operational efficiencies improve.

Positive Factors

Financial Performance

CRNT reported solid F1Q25 results and strong bookings ahead of a meaningful 2H revenue ramp.

Market Expansion

An improving pipeline of SP opportunities and an increased TAM, including private networks, should position CRNT for sustained modest revenue growth.

Negative Factors

Margin Pressures

Near-term gross margins have been adjusted down due to the strength in the lower margin India business.

Visibility Concerns

Management messaged some concern for reduced 1H25 visibility.

Ceragon Networks (CRNT) vs. S&P 500 (SPY)

Market Cap

$206.11M

Dividend YieldN/A

Average Volume (3M)1.02M

Price to Earnings (P/E)9.0

Beta (1Y)0.86

Revenue Growth11.94%

EPS Growth377.86%

CountryUS

Employees1,056

SectorTechnology

Sector Strength69

IndustryCommunication Equipment

Share Statistics

EPS (TTM)0.03

Shares Outstanding88,839,080

10 Day Avg. Volume932,713

30 Day Avg. Volume1,017,561

Financial Highlights & Ratios

PEG Ratio0.29

Price to Book (P/B)1.14

Price to Sales (P/S)0.00

P/FCF Ratio18.57

Enterprise Value/Market Cap0.96

Enterprise Value/Revenue0.13

Enterprise Value/Gross Profit1.46

Enterprise Value/Ebitda1.12

Forecast

1Y Price Target

$4.83

Price Target Upside93.20% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering3

Ceragon Networks Business Overview & Revenue Model

Company DescriptionCeragon Networks Ltd. provides wireless backhaul and fronthaul solutions that enable cellular operators and other wireless service providers. Its solutions use microwave and millimeter wave radio technology to transfer telecommunication traffic between base stations, small/distributed cells, and the core of the service provider's network. The company also uses microwave technology for ultra-high speed, ultra-low latency communication for wireless 5G and 4G, 3G, and other cellular base stations. In addition, it provides IP-20 all-outdoor solutions, such as IP-20C, IP-20C-HP, IP-20S, IP-20E, and IP-20V; IP-20 split-mount/all-indoor solutions comprising IP-20N/IP-20A, IP-20F, and IP-20G; and IP-50 disaggregated solutions, including IP-50E, IP-50C, IP-50S, and IP-50FX for various short-haul, long-haul, fronthaul, and enterprise access applications. Further, the company offers network management system; and network and radio planning, site survey, solutions development, installation, network auditing and optimization, maintenance, training, and other services. It provides its services to oil and gas companies; public safety organizations; business and public institutions; broadcasters; energy utilities; and private communications networks. The company sells its products through direct sales, original equipment manufacturers, distributors, and system integrators. It operates in North America, Europe, Africa, the Asia Pacific, the Middle East, India, and Latin America. The company was formerly known as Giganet Ltd. and changed its name to Ceragon Networks Ltd. in September 2000. Ceragon Networks Ltd. was incorporated in 1996 and is headquartered in Rosh HaAyin, Israel.

How the Company Makes MoneyCeragon Networks generates revenue by selling its wireless backhaul solutions, which include both hardware and software components, to telecommunications service providers and other network operators. The company's key revenue streams include the sale of its high-capacity communication systems, maintenance and support services, and professional services such as network planning and optimization. Ceragon's earnings are influenced by its ability to maintain strong relationships with key telecommunications providers and adapt to the growing demand for high-speed mobile data services. Additionally, strategic partnerships and contracts with major mobile operators contribute significantly to its revenue.

Ceragon Networks Financial Statement Overview

Summary

Ceragon Networks has demonstrated strong revenue growth and improved profitability, with a significant increase in total revenue and an improvement in net profit margin. The balance sheet reflects stable leverage management, though the decline in free cash flow highlights a need for improved cash generation.

Income Statement

Positive

Ceragon Networks has demonstrated strong revenue growth, with a significant increase in total revenue from $347.2 million in 2023 to $394.2 million in 2024, marking a growth rate of approximately 13.5%. The gross profit margin improved to 34.7% in 2024, indicating efficient cost management. Net profit margin improved to 6.1%, showing enhanced profitability. However, EBIT and EBITDA margins were 9.8% and 13.7% respectively, indicating room for operational efficiency improvements.

Balance Sheet

Positive

The company's balance sheet shows a solid equity ratio of 48.2% in 2024, reflecting a stable capital structure. The debt-to-equity ratio has improved to 0.25, indicating better leverage management. Return on equity increased to 14.5%, highlighting improved profitability from equity. However, the company needs to maintain cautious debt management due to industry volatility.

Cash Flow

Positive

The free cash flow decreased from $17.99 million in 2023 to $11.62 million in 2024, indicating a decline in cash generation efficiency. The operating cash flow to net income ratio is 1.09, suggesting that operating cash flow aligns closely with net income. The free cash flow to net income ratio is 0.48, showing a moderate conversion of profit into cash. Focus on enhancing cash flow generation is needed.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
394.19M	347.18M	295.17M	290.77M	262.88M
	Gross Profit
136.85M	119.87M	93.06M	88.38M	75.64M
	EBIT
38.73M	21.21M	1.35M	4.81M	-7.57M
	EBITDA
45.34M	30.25M	-1.19M	13.33M	3.79M
	Net Income Common Stockholders
24.06M	6.22M	-7.40M	-14.83M	-16.11M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
35.31M	28.24M	22.95M	17.08M	27.10M
	Total Assets
345.00M	298.52M	301.61M	292.56M	272.42M
	Total Debt
41.11M	50.20M	54.43M	36.37M	13.00M
	Net Debt
5.80M	21.97M	31.48M	19.29M	-14.10M
	Total Liabilities
178.67M	164.51M	169.53M	155.41M	126.29M
	Stockholders Equity
166.32M	134.02M	132.07M	137.15M	146.13M
Cash Flow		Free Cash Flow
9.73M	17.99M	-17.32M	-24.61M	10.76M
	Operating Cash Flow
26.20M	30.89M	-4.89M	-15.02M	17.67M
	Investing Cash Flow
-16.46M	-20.87M	-12.42M	-9.39M	-6.92M
	Financing Cash Flow
-1.52M	-4.86M	23.11M	14.53M	-7.38M

Ceragon Networks Technical Analysis

Technical Analysis Sentiment

Positive

Last Price2.50

Price Trends

50DMA

2.33

Positive

100DMA

3.32

Negative

200DMA

3.15

Negative

Market Momentum

MACD

>-0.01

Negative

RSI

62.04

Neutral

STOCH

68.00

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CRNT, the sentiment is Positive. The current price of 2.5 is above the 20-day moving average (MA) of 2.19, above the 50-day MA of 2.33, and below the 200-day MA of 3.15, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 62.04 is Neutral, neither overbought nor oversold. The STOCH value of 68.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CRNT.

Ceragon Networks Risk Analysis

Ceragon Networks disclosed 51 risk factors in its most recent earnings report. Ceragon Networks reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Ceragon Networks Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FEIM	76 Outperform	$163.92M	7.04	52.23%	5.90%	24.10%	603.04%
CRNT	68 Neutral	$206.11M	9.04	15.02%	―	11.94%	377.86%
AVNW	67 Neutral	$259.56M	―	-1.32%	―	12.39%	-123.62%
AUDC	63 Neutral	$262.96M	15.72	9.33%	4.06%	-1.13%	61.49%
Sector *	60 Neutral	$11.39B	10.52	-6.21%	2.95%	7.68%	-11.12%
INSG	49 Neutral	$117.66M	23.21	111.75%	―	1.60%	―

* Technology Sector Average

Performance Comparison

CRNT

Ceragon Networks

2.50

-0.17

-6.37%

AUDC

Audiocodes

8.98

-0.90

-9.11%

AVNW

Aviat Networks

20.81

-10.34

-33.19%

FEIM

Frequency Electronics

17.80

8.99

102.04%

INSG

Inseego

7.85

2.62

50.10%

FKWL

Franklin Wireless

4.63

1.63

54.33%

Ceragon Networks Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: 10.62%|

Next Earnings Date:Aug 04, 2025

Earnings Call Sentiment Neutral

Ceragon Networks had a strong quarter with significant revenue growth and record bookings in key regions like India and North America. The successful acquisition of E2E Technologies and expansion into fast-growing segments were notable achievements. However, challenges included a decline in gross profit, increased operating expenses, and a weakened cash position due to acquisitions. Overall, the company is positioned well for growth, but must manage cost pressures and improve profitability.

Q1-2025 Updates

Positive Updates

Record Bookings in India

India's revenue increased by 65% year-over-year to $42.9 million, with bookings reaching the highest levels since Q1 2024.

Strong Performance in North America

North America revenue increased from $13.4 million in Q4 2024 to $17.6 million in Q1 2025, indicating a rebound in the region.

Successful Acquisition of E2E Technologies

The acquisition strengthened expertise in Private Networks, particularly in energy and utilities in North America, with E2E's bookings outperforming expectations.

Improved Competitive Position

Ceragon is improving its competitive position with existing customers and getting more traction from new prospects in North America.

Expansion in Fast-Growing Segments

Enhanced capabilities in wireless connectivity segments, such as millimeter-wave and Private Network markets, through acquisitions.

Negative Updates

Decline in Gross Profit

Non-GAAP gross profit decreased by 8.6% from $32.5 million in Q1 2024 to $29.7 million in Q1 2025, with gross margin dropping from 36.7% to 33.5%.

Increased Operating Expenses

Sales and marketing expenses increased from $10.7 million in Q1 2024 to $11.8 million in Q1 2025, reflecting higher costs as a percentage of revenue.

Net Cash Position Weakened

Net cash position decreased from $10.1 million at the end of 2024 to $2.5 million at the end of Q1 2025, largely due to the acquisition of E2E.

Higher Restructuring Costs

Restructuring and related charges increased to $3.7 million in Q1 2025 from $1.4 million in Q1 2024, indicating higher efforts to achieve cost discipline.

Company Guidance

During Ceragon Networks' earnings call for the first fiscal quarter of 2025, the company provided guidance with several key metrics. The firm reported a revenue of $88.7 million for Q1 2025, a slight increase from $88.5 million in Q1 2024. The strongest revenue contribution came from India, at $42.9 million, marking a 65% year-over-year increase, while North America contributed $17.6 million. Non-GAAP gross profit was $29.7 million with a gross margin of 33.5%, down from 36.7% the previous year. Operating income on a non-GAAP basis was $4.5 million, a decrease from $7.6 million in Q1 2024, primarily due to lower gross profit. The company reiterated its full-year 2025 revenue guidance of $390 million to $430 million, with an expected non-GAAP operating margin of at least 10% at the low end of the guidance range. The call highlighted strategic initiatives, including the successful acquisition of E2E Technologies, expected to be accretive to non-GAAP earnings by the second half of 2025. Additionally, Ceragon is focusing on opportunities in the software-driven services and Private Networks segments to expand its addressable market and enhance margins.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.