Crexendo (CXDO) AI Stock Analysis

Compare

227 Followers

CXDO Dividends

Top Page

Crexendo

(NASDAQ:CXDO)

76Outperform

Crexendo's overall strong financial performance, marked by significant revenue and profitability improvements, forms a solid foundation for its stock score. Positive earnings call sentiment and technical indicators further bolster the outlook. However, high valuation metrics and overbought technical signals introduce caution, suggesting the stock is priced for substantial growth with associated risks.

Positive Factors

International Expansion

International growth is becoming significant, with Crexendo's software solutions segment seeing success in Europe and Australia, growing 39% and now representing 5% of total revenue.

Software Solutions Growth

Crexendo's NetSapiens software solutions business grew 32% in the quarter and 30% for the year, powering the company's beat for both revenue and EPS.

Strategic Benefits

The company is benefiting from the strategic pivots of major competitors like Microsoft/Metaswitch and Cisco/BroadSoft, which have boosted Crexendo's new logos and pipelines.

Negative Factors

Support Sunsetting

The company continues to benefit from an army of Microsoft Metaswitch and Cisco BroadSoft users evaluating other options given the sunsetting of support for these two platforms.

Crexendo (CXDO) vs. S&P 500 (SPY)

Market Cap

$149.27M

Dividend YieldN/A

Average Volume (3M)118.01K

Price to Earnings (P/E)92.9

Beta (1Y)1.61

Revenue Growth13.85%

EPS Growth38.33%

CountryUS

Employees179

SectorCommunication Services

Sector Strength84

IndustryTelecommunications Services

Share Statistics

EPS (TTM)0.08

Shares Outstanding27,901,072

10 Day Avg. Volume104,858

30 Day Avg. Volume118,007

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap0.86

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit2.69

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$8.30

Price Target Upside61.17% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering5

Crexendo Business Overview & Revenue Model

Company DescriptionCrexendo, Inc. provides cloud communication, unified communications as a service, call center, collaboration, and other cloud business services for businesses in the United States, Canada, and internationally. It operates through two segments, Cloud Telecommunications and Web Services. The Cloud Telecommunications segment provides telecommunications services that transmit calls using Internet protocol (IP) or cloud technology, which converts voice signals into digital data packets for transmission over the Internet or cloud; and resells broadband Internet services. This segment is also involved in the sale and lease of cloud telecommunications equipment. In addition, it offers hardware, software, and unified communication solutions for businesses using IP or cloud technology over high-speed internet connection through various devices and user interfaces, such as desktop phones and/or mobile, and desktop applications under the Crexendo brand name. The Web Services segment provides website hosting and other professional services. The company was formerly known as iMergent, Inc. and changed its name to Crexendo, Inc. in May 2011. Crexendo, Inc. was incorporated in 1995 and is headquartered in Tempe, Arizona.

How the Company Makes MoneyCrexendo makes money primarily through the sale of its cloud-based communication services, which include subscription fees for its unified communication solutions, hosted phone systems, and contact center services. The company operates on a recurring revenue model, where businesses pay regular subscription fees for access to Crexendo's communication platforms and tools. Additionally, Crexendo may generate revenue from professional services, including implementation, training, and support services that accompany the deployment of its communication solutions. The company's strategic partnerships with technology providers and channel partners also contribute to its revenue, allowing Crexendo to expand its market reach and enhance its service offerings.

Crexendo Financial Statement Overview

Summary

Crexendo exhibits strong financial health, marked by impressive revenue growth and profitability improvements. The balance sheet is well-managed with low leverage and high equity. Cash flow generation is a key strength, providing liquidity and supporting growth. While operational efficiency can be improved further, the overall outlook is positive with a solid foundation for future expansion.

Income Statement

Very Positive

Crexendo has demonstrated strong revenue growth, with a 14.37% increase from 2023 to 2024. The gross profit margin improved to 78.49% in 2024, indicating efficient cost management. The net profit margin improved significantly from negative in 2023 to 2.76% in 2024. However, the EBIT margin, while positive at 3.00%, remains modest, suggesting room for operational efficiency improvements.

Balance Sheet

Positive

The company's balance sheet is strong with a low debt-to-equity ratio of 0.04, reflecting minimal leverage. The return on equity improved to 3.26% in 2024, showing better profitability. The equity ratio is robust at 79.17%, indicating a strong capital structure. However, the lower total assets compared to 2021 indicate a potential area of concern for asset growth.

Cash Flow

Very Positive

Crexendo's cash flow is robust, with a significant increase in free cash flow from 2023 to 2024, growing by 83.66%. The operating cash flow to net income ratio is healthy at 3.75, highlighting strong cash generation relative to income. The free cash flow to net income ratio is high at 3.73, indicating efficient cash utilization. These metrics suggest strong liquidity and cash management.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
60.84M	53.20M	37.55M	28.09M	16.39M
	Gross Profit
47.75M	31.64M	23.87M	17.43M	11.44M
	EBIT
1.82M	-1.69M	-4.71M	-2.81M	991.00K
	EBITDA
1.82M	3.42M	-33.37M	-1.20M	1.25M
	Net Income Common Stockholders
1.68M	-362.00K	-35.41M	-2.44M	7.94M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
18.19M	10.35M	5.47M	7.47M	17.58M
	Total Assets
64.94M	56.16M	55.63M	77.15M	30.70M
	Total Debt
2.10M	2.19M	4.42M	2.79M	2.03M
	Net Debt
-16.10M	-8.16M	-1.06M	-4.68M	-15.55M
	Total Liabilities
13.53M	11.55M	14.18M	11.22M	4.94M
	Stockholders Equity
51.41M	44.61M	41.46M	65.93M	25.76M
Cash Flow		Free Cash Flow
6.26M	3.41M	-700.00K	-10.87M	-274.00K
	Operating Cash Flow
6.28M	3.50M	-411.00K	-1.01M	647.00K
	Investing Cash Flow
-27.00K	3.70M	-1.70M	-9.87M	-921.00K
	Financing Cash Flow
1.59M	-2.31M	-54.00K	650.00K	13.67M

Crexendo Technical Analysis

Technical Analysis Sentiment

Positive

Last Price5.15

Price Trends

50DMA

5.29

Negative

100DMA

5.47

Negative

200DMA

5.21

Positive

Market Momentum

MACD

0.04

Negative

RSI

56.34

Neutral

STOCH

69.04

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CXDO, the sentiment is Positive. The current price of 5.15 is above the 20-day moving average (MA) of 4.76, below the 50-day MA of 5.29, and below the 200-day MA of 5.21, indicating a neutral trend. The MACD of 0.04 indicates Negative momentum. The RSI at 56.34 is Neutral, neither overbought nor oversold. The STOCH value of 69.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CXDO.

Crexendo Risk Analysis

Crexendo disclosed 50 risk factors in its most recent earnings report. Crexendo 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

Crexendo Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CXDO	76 Outperform	$149.27M	92.88	4.73%	―	13.85%	38.33%
RDCM	76 Outperform	$193.15M	28.06	7.82%	―	18.23%	81.31%
SIFY	65 Neutral	$313.80M	―	0.20%	―	9.62%	―
SNRE	63 Neutral	$140.56M	―		―	―	―
Sector *	60 Neutral	$13.74B	7.25	-2.74%	3.81%	2.21%	-37.97%
FNGR	54 Neutral	$180.57M	―	-48.67%	―	-16.91%	4.83%
KORE	44 Neutral	$41.70M	―	174.77%	―	3.43%	22.96%

* Communication Services Sector Average

Performance Comparison

CXDO

Crexendo

5.15

1.08

26.54%

RDCM

Radcom

12.72

3.66

40.40%

SIFY

Sify Technologies

4.37

-2.77

-38.80%

FNGR

FingerMotion

3.22

-0.02

-0.62%

KORE

KORE Group Holdings

2.50

-1.50

-37.50%

SNRE

Sunrise Communications AG Unsponsored ADR Class A

53.26

7.26

15.78%

Crexendo Earnings Call Summary

Earnings Call Date:May 06, 2025

(Q1-2025)

% Change Since: -3.74%|

Next Earnings Date:Aug 12, 2025

Earnings Call Sentiment Positive

Crexendo demonstrated strong revenue growth, user expansion, and improved profitability, particularly in the software solutions segment. However, the decline in product revenue and challenges in the telecom segment indicate areas that need attention. Despite these issues, the company's overall performance and strategic initiatives provide a positive outlook.

Q1-2025 Updates

Positive Updates

Revenue Growth

Crexendo's total revenue grew by 12% year-over-year to $16.1 million, with a 33% increase in software solutions revenue.

User Milestone

The software solutions platform surpassed 6 million users during the quarter.

Gross Margin Improvement

Software solutions gross margins increased by 500 basis points to 78% compared to Q1 2024 and 1,000 basis points higher than Q4 2024.

Profitability

Reported strong GAAP net income of $1.2 million and non-GAAP net income of $2.6 million, with adjusted EBITDA of $2.6 million.

Industry Recognition

Crexendo received multiple awards including the 2025 Product of the Year and the Hosted VoIP Excellence Award from Internet Telephony Magazine.

Partnership and Ecosystem Growth

Crexendo's ecosystem vendor partner program is gaining traction, setting the stage for significant revenue in the future.

Negative Updates

Decline in Product Revenue

Product revenue declined by 22% to $1.1 million compared to $1.3 million in the first quarter of the prior year.

Challenges in Telecom Segment

Telecom services retail segment grew only by 1% organically due to proactive reduction in selling lower margin opportunities.

Gross Margin Decline in Service Revenue

Service revenue gross margin decreased by 3% quarter over quarter to 57%.

Company Guidance

During Crexendo's Q1 2025 earnings call, the company provided robust guidance, highlighting a year-over-year revenue growth of 12% to $16.1 million, driven by a 33% increase in software solutions revenue to $6.9 million. The software segment saw gross margins rise by 500 basis points to 78% compared to Q1 2024. Crexendo achieved a GAAP net income of $1.2 million and non-GAAP net income of $2.6 million, both significantly higher than the previous year. The company's adjusted EBITDA stood at $2.6 million. The call emphasized the strategic focus on sustainable growth and profitability, particularly in the competitive UCaaS market, and highlighted significant milestones such as surpassing 6 million software platform users. Guidance for future quarters remains optimistic, with a commitment to double-digit revenue growth, bolstered by strategic investments and market opportunities arising from industry disruptions.

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.