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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Ribbon Communications Inc. (XNAS:RBBN) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
RBBN
Name:
RIBBON COMMUNICATIONS INC. (XNAS:RBBN)
Sector:
11.56M
Industry:
Telecom Services
CEO:
Mr. Bruce McClelland
Total Employees:
3,685
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -31.33% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF RIBBON COMMUNICATIONS INC.(RBBN) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND TELECOM SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
3.42
One Month Price Target:
$3.44
Six Month Price Target :
$3.53
Likely Price in One Year's Time:
Ticker:
$3.63
Likely Trading Range Today Under (Normal Volatility)
$3.4
Price Upper limit ($) :
$3.45
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$3.14
This week:
$2.8
This month :
$2.18
Other Primary facts
Market Cap:
448.35M
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
150.45M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
19.86%
-22.74%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$4.71
$4.11
$2.13
$2.73
Medium risk (<10%) entry points
Buy Call
Sell Call
$3.92
Buy Put:
Sell Put:
$3.79
$2.92
$3.05
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
RBBN
Sharpe Ratio:
2.52%
Comparison:
RBBN, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 159.47% higher than the industry
& ratio is 10.68% higher than the market/S&P 500 average
Average Returns/Yield of
RBBN
Daily returns:
0.11%
Weekly returns:
0.55%
Monthly returns:
2.20%
Yearly returns:
17.77%
Comparison of returns:
Average annual returns/yield (last 3 years) is 48.41% above industry average
Classification:
RBBN, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.63
Statistical test of Returns:
RBBN has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
4.01%
Weekly Volatility:
8.96%
Monthly Volatility:
17.91%
Yearly Volatility:
62.06%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
4.99%
Volatility in last five trading days has been 24.66% above long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-8.12%
Weekly VaR:
-18.15%
Monthly VaR:
-36.30%
How Much Can the price of
RBBN
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-31%
Worst case (decline):
>85%
This translates to price declining to:
$2.37
This translates to price declining to:
$0.51
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
RBBN is a 156.20% riskier investment compared to the market/S&P 500 & is 119.49% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 17.54% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
RBBN
Beta in relation to market/S&P 500--0.92
Expected beta in 1 year's time:
0.734
Expected beta in 3 year's time:
1.038
Unlevered (debt free) Beta:
0.544
Beta in relation to Nasdaq (XNAS):
0.717
Beta in relation to all global stocks::
0.839
Beta Comparison & Analysis
Beta of competitors/peers::
1.194
Beta is -22.99% lower than peers
Average Industry Beta:
0.819
Beta is 12.31% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
6.57%
Sustainable growth rate is -35.42% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.169
Alpha is 87.78% above industry average alpha yield
Alpha is 1078% higher than market/& is unsustainably high
Analysis of Cost of Capital of
RBBN
Equity cost of capital:
0.094
Equity cost of capital is 7.88% above industry mean WACC
Unlevered (without debt) cost of capital:
5.59%
Before-tax cost of debt:
3.88%
After-tax cost of debt:
3.06%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.06%
WACC is 30.91% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$5.49
Revenue growth rate per share of (3Y):
1.08
Annual revenue growth rate is -99.25% below industry average
EPS:
-$1.37
Expected Annual growth rate of EPS (3Y):
0.28%
Expected future EPS growth rate is -98.87% lower than the Telecom Services industry
Free cash flow (FCF) per share:
$0.17
-
-
Debt per share
$2.54
EBITDA per share
-$0.91
Valuation Analysis Today of
RBBN
P/E Ratio:
25.2
P/E Ratio of Competitors/Peers:
51.3
P/E ratio is -50.87% lower than main peers & is -14.60% lower than the industry
-
RBBN is -108.46% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
0.62
Price to sales ratio is -90.03% below the industry mean
P/B (Price to book value ratio):
1.08
Price to free cash flow: 20.26
Price to free cash flow ratio is -13.39% lower than the industry
Net income growth rate (3Y):
62.43%
Net income growth rate is -84.66% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
80.51%
Net debt to equity ratio:
68.67%
Debt to assets ratio:
30.21%
Net debt to assets ratio:
25.77%
Debt-to-asset ratio is -60.48% below industry average
Ability to repay debt:
Interest coverage ratio:
-8.43
Interest coverage ratio is -637.23% less than industry average
Looking forward:
Debt growth rate:
-6.61%
Annual debt growth is -100% lower than industry average debt growth rate
Debt repayment rate in last quarter: 5.03%
Analysis of Key Statistics
Correlation of price movement with the market:
0.358
Statistical significance of correlation:
RBBN has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.461
Stock price is -22.49% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.461
Correlation of price movement with Nasdaq (^IXIC):
-0.075
Covariance of price movement with the market:
-0.174
Kurtosis
4.693
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.125
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
RBBN
Gross Profit Margin Ratio:
213%
Operating Profit Margin Ratio:
-17.48%
Operating profit margin is -658.38% lower than the industry
Net Profit Margin Ratio:
213%
Effective Tax Rate:
14.25%
Effective tax rate is -55.84% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-42.68%
Return on equity (ROE) is 1011.44% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-16.02%
Return on assets (ROA) is 8688.27% higher than the industry
Financial Leverage:
1.4x
Current Ratio:
1.25
Current ratio is -22.59% below industry average
Cash Conversion Cycle (days):
39.7
Cash conversion cycle is -43.86% below industry average
The remaining useful life of property plant & equipment is: 0.0 years
Stock based compensation to net income ratio:
-2.10%
In-depth Efficiency Analysis
Revenue generated per employee:
224.0K
Each employee generates -78% less revenue than industry average revenue per employee
EBITDA generated per employee:
- 37.2K
Each employee generates -111% less EBITDA than industry average revenue per employee
Profit generated per employee:
- 54.9K
Each employee generates -153% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
3.1K
Each employee generates -95% less free cash flow than industry average revenue per employee
Assets/Capital per employee
228.3K
Each employee generates -95% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 0.22%
Growth rate in R&D investment/expenditure is -101.37% lower than the industry
Competitors/Peer firms of
RBBN
ORBCOMM INC. (XLON:0A7Z)
FT:Gold Strat Target Inc (BATS:IGLD)
QUINSTREET, INC. (XNAS:QNST)
VIVID SEATS INC. (XNAS:SEAT)
PERION NETWORK LTD (XNAS:PERI)
BOSTON OMAHA CORPORATION (XNYS:BOC)
CONSOLIDATED COMMUNICATIONS HOLDINGS, INC. (XNAS:CNSL)
Trivago NV (XNAS:TRVG)
DOUYU INTERNATIONAL HOLDINGS LIMITED (XNAS:DOYU)
Current Analyst Ratings
Strong buy�13%
Buy�4%
Hold�4%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
825.38M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
383.78M
441.60M
200.23M
50.97M
201.65M
150.68M
49.17M
451.05M
2.22M
16.24M
82.97M
- 136926.00K
- 144246.00K
- 202473.00K
- 236127.00K
- 33654.00K
- 202473.00K
Statement of Cash Flow
Date:
Period:
19.43M
Differed Income Tax :
- 6773.00K
Stock Based Compensation :
4.26M
Change in Working Capital :
39.44M
Accounts Receivables:
60.46M
Other Working Capital:
- 1342.00K
Other Non-Cash Items:
28.66M
Net Cash Provided by Operating Activities:
15.03M
Investments in PP&E:
- 3471.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
92.84M
-
92.84M
220.96M
61.58M
47.35M
422.73M
97.59M
300.89M
335.19M
16.90M
53.84M
37.01M
841.43M
-
1.26B
97.84M
36.68M
-
109.08M
94.58M
338.19M
381.95M
42.19M
451.56M
-
789.74M
15.00K
- 1425636.00K
22.4M
1.88B
March 31, 2022 at 6:00:00 AM
834.83M
474.41M
1.26B
-
418.63M
325.8M
-
-
- 3471.00K
- 20213.00K
-
-
-
- 2182.00K
- 22395.00K
- 184.00K
- 11020.00K
95.47M
106.49M
15.03M
- 3471.00K
11.56M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
RBBN
2023
2024
2025
2026
2027
$3.64
$3.87
$4.11
$4.36
$4.63