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Ribbon Communications
(NASDAQ:RBBN)
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Rating:53Neutral
Price Target:
$1.50
▼(-27.18% Downside)
Action:Reiterated
Date:10/28/26
Overall score is held back primarily by weak cash flow trends (TTM OCF/FCF turning negative) and bearish technicals (below major moving averages with negative MACD). These are partially offset by improved balance-sheet leverage, strong TTM revenue re-acceleration, and a constructive earnings outlook with improving backlog and positive Q4 EBITDA guidance, while valuation is reasonable at ~12.7x earnings.
Positive Factors
Revenue Re-acceleration
Sharp TTM revenue re-acceleration, reinforced by sequential and year-over-year quarterly growth, indicates improving demand across Ribbon’s networking portfolio. Sustained top-line expansion can support operating leverage, strengthen customer adoption, and provide a foundation for improved earnings over the next several quarters.
Negative Factors
Negative Cash Conversion
Recent negative operating and free cash flow shows that accounting profitability is not yet converting reliably into cash. Persistent weak conversion could increase dependence on balance-sheet resources, constrain investment capacity, and make execution more sensitive to working-capital timing.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue Re-acceleration
Sharp TTM revenue re-acceleration, reinforced by sequential and year-over-year quarterly growth, indicates improving demand across Ribbon’s networking portfolio. Sustained top-line expansion can support operating leverage, strengthen customer adoption, and provide a foundation for improved earnings over the next several quarters.
Read all positive factors
Ribbon Communications Key Performance Indicators (KPIs)
Any
Revenue by Type
Splits sales into types like recurring vs. one-time, licensing vs. maintenance, or product vs. services, indicating how predictable and resilient Ribbon’s revenue stream is. Higher recurring revenue typically means smoother cash flow and greater visibility, while a large share of one-time sales can lead to lumpy results and greater volatility.
Splits sales into types like recurring vs. one-time, licensing vs. maintenance, or product vs. services, indicating how predictable and resilient Ribbon’s revenue stream is. Higher recurring revenue typically means smoother cash flow and greater visibility, while a large share of one-time sales can lead to lumpy results and greater volatility.
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The Fly
The FlyRibbon Communications (RBBN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$250.35M
Dividend YieldN/A
Average Volume (3M)1.36M
Price to Earnings (P/E)12.7
Beta (1Y)1.70
Revenue Growth-7.62%
EPS GrowthN/A
CountryUS
Employees3,080
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.11
Shares Outstanding178,823,350
10 Day Avg. Volume1,317,446
30 Day Avg. Volume1,357,965
Financial Highlights & Ratios
PEG Ratio-0.08
Price to Book (P/B)1.13
Price to Sales (P/S)0.60
P/FCF Ratio19.48
Enterprise Value/Market Cap3.06
Enterprise Value/Revenue0.96
Enterprise Value/Gross Profit2.06
Enterprise Value/Ebitda29.47
Forecast
1Y Price Target
$2.97Price Target Upside44.01% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)0.05
Revenue Forecast (FY)$837.94M
Ribbon Communications Business Overview & Revenue Model
Company Description
Ribbon Communications Inc., established in 1997 and headquartered in Plano, Texas, is a global provider of advanced communication technology. Operating across the United States, Europe, the Middle East, Africa, and the Asia Pacific region, the com...
How the Company Makes Money
Ribbon primarily makes money by selling communications network products and related services to telecom operators and enterprises. Key revenue streams generally include: (1) Product revenue from hardware and software that supports real-time commun...
Ribbon Communications Earnings Call Summary
Earnings Call Date:Oct 27, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Feb 17, 2027
Earnings Call Sentiment Positive
The call was strongly positive overall. Management reported substantial sequential improvement in revenue, profitability, bookings, backlog, IP Optical Networks, Cloud and Edge, Verizon activity, international markets, and new government, AI, security, and infrastructure opportunities. The main challenges were year-over-year margin pressure, an IP Optical EBITDA loss, lower EMEA and Cloud and Edge year-over-year revenue, cash usage and leverage, and expected supply constraints and higher product costs.Positive Updates
Strong Third-Quarter Revenue and Profitability Improvement
Third-quarter revenue increased 14% sequentially to $219 million and 2% year over year. Adjusted EBITDA more than doubled sequentially to $27 million, while non-GAAP net income improved to $12 million, up $17 million sequentially and $5 million year over year. Non-GAAP diluted EPS was $0.07, up $0.10 sequentially and $0.03 year over year.
Negative Updates
Year-Over-Year Gross Margin Compression
Consolidated non-GAAP gross margin declined 32 basis points year over year, primarily due to product and customer mix.
Read all updates
Q3-2026 Updates
Positive
Negative
Strong Third-Quarter Revenue and Profitability Improvement
Third-quarter revenue increased 14% sequentially to $219 million and 2% year over year. Adjusted EBITDA more than doubled sequentially to $27 million, while non-GAAP net income improved to $12 million, up $17 million sequentially and $5 million year over year. Non-GAAP diluted EPS was $0.07, up $0.10 sequentially and $0.03 year over year.
Read all positive updates
Company Guidance
For the fourth quarter of 26, Ribbon expects revenue to be in a range of $233 million to $247 million and adjusted EBITDA to be in a range of $40 million to $47 million, with sequential and year over year growth supported by improved backlog and pipeline; the guidance assumes approximately $2 million per quarter in increased product cost associated with higher components and logistics expenses, with the potential to partially offset that through targeted price increases in 2027, and the company anticipates being supply limited to some extent in the fourth quarter. Ribbon expects further improvement in Verizon revenue in the fourth quarter, a solid 2027, a higher deployment rate or a migration rate in 2027, and potential for incremental business from their Frontier operation; it also expects $5 million to $10 million that customers would wanna get in the quarter probably ends up in the next quarter, operating cash flow to improve a little bit into the fourth quarter and certainly as we move into Q1 of 27, and continued EBITDA improvement to reduce the net debt leverage ratio as it moves through the fourth quarter and into 2027.Ribbon Communications Financial Statement Overview
Summary
Income Statement
56
Neutral
Balance Sheet
72
Positive
Cash Flow
41
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 800.98M | 844.56M | 833.88M | 826.34M | 819.76M | 844.96M |
| Gross Profit | 372.68M | 396.86M | 439.51M | 379.48M | 400.94M | 444.66M |
| EBITDA | 26.00M | 59.82M | 91.43M | 43.28M | -16.34M | -108.72M |
| Net Income | 18.59M | 39.64M | -54.23M | -66.21M | -98.08M | -177.19M |
Balance Sheet | ||||||
| Total Assets | 1.12B | 1.21B | 1.16B | 1.14B | 1.26B | 1.35B |
| Cash, Cash Equivalents and Short-Term Investments | 40.38M | 96.41M | 87.77M | 26.63M | 67.10M | 103.92M |
| Total Debt | 77.75M | 405.13M | 383.67M | 287.03M | 387.93M | 442.87M |
| Total Liabilities | 761.86M | 763.26M | 757.93M | 691.39M | 737.14M | 820.57M |
| Stockholders Equity | 388.72M | 448.99M | 404.62M | 452.76M | 518.43M | 527.17M |
Cash Flow | ||||||
| Free Cash Flow | -29.11M | 26.06M | 27.37M | 7.61M | -39.92M | 2.05M |
| Operating Cash Flow | -18.68M | 51.40M | 50.24M | 17.09M | -26.36M | 19.18M |
| Investing Cash Flow | -10.99M | -25.34M | -22.87M | -9.48M | -12.14M | -14.19M |
| Financing Cash Flow | -4.39M | -19.43M | 37.71M | -47.86M | 931.00K | -33.68M |
Ribbon Communications Technical Analysis
Negative
2.06
Price Trends
1.77
Negative
2.03
Negative
2.26
Negative
Market Momentum
-0.12
Positive
38.86
Neutral
37.37
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RBBN, the sentiment is Negative. The current price of 2.06 is above the 20-day moving average (MA) of 1.55, above the 50-day MA of 1.77, and below the 200-day MA of 2.26, indicating a bearish trend. The MACD of -0.12 indicates Positive momentum. The RSI at 38.86 is Neutral, neither overbought nor oversold. The STOCH value of 37.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RBBN.
Ribbon Communications Risk Analysis
Ribbon Communications disclosed 50 risk factors in its most recent earnings report. Ribbon Communications 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
Ribbon Communications Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $18.34M | 5.62 | 14.09% | 22.00% | -3.72% | 4.50% | |
62 Neutral | $326.42M | 68.48 | 3.34% | ― | 3.66% | ― | |
62 Neutral | $143.02M | 17.54 | 10.20% | ― | 3.06% | -72.26% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $595.33M | -29.20 | -24.96% | ― | 16.73% | 35.67% | |
58 Neutral | $419.86M | 36.21 | 1.96% | ― | 13.62% | ― | |
53 Neutral | $250.35M | 12.73 | 4.51% | ― | -7.62% | ― |
* Technology Sector Average
RBBN
Ribbon Communications
1.40
-2.06
-59.48%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.