DB:NU42

Stock Analysis Report

Ribbon Communications

Executive Summary

Ribbon Communications Inc. provides networked solutions in the United States, Europe, the Middle East, Africa, Japan, other Asia Pacific, and internationally.


Snowflake Analysis

Undervalued with adequate balance sheet.


Similar Companies

Share Price & News

How has Ribbon Communications's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NU42's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-3.6%

NU42

-9.1%

DE Communications

-0.2%

DE Market


1 Year Return

-46.4%

NU42

3.6%

DE Communications

13.7%

DE Market

Return vs Industry: NU42 underperformed the German Communications industry which returned 4.8% over the past year.

Return vs Market: NU42 underperformed the German Market which returned 14.4% over the past year.


Shareholder returns

NU42IndustryMarket
7 Day-3.6%-9.1%-0.2%
30 Day-6.3%-7.8%0.3%
90 Day14.5%-9.4%3.7%
1 Year-46.4%-46.4%4.2%3.6%17.2%13.7%
3 Year-51.3%-51.3%-5.6%-5.9%15.4%5.3%
5 Year-82.2%-82.2%86.4%86.1%21.3%4.7%

Price Volatility Vs. Market

How volatile is Ribbon Communications's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Ribbon Communications undervalued compared to its fair value and its price relative to the market?

46.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NU42 (€2.68) is trading below our estimate of fair value (€5.04)

Significantly Below Fair Value: NU42 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: NU42 is good value based on its PE Ratio (19.3x) compared to the Communications industry average (20x).

PE vs Market: NU42 is good value based on its PE Ratio (19.3x) compared to the German market (20.7x).


Price to Earnings Growth Ratio

PEG Ratio: NU42 is poor value based on its PEG Ratio (3.4x)


Price to Book Ratio

PB vs Industry: NU42 is good value based on its PB Ratio (0.6x) compared to the DE Communications industry average (3.1x).


Next Steps

Future Growth

How is Ribbon Communications forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

5.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NU42's forecast earnings growth (5.6% per year) is above the savings rate (-0.4%).

Earnings vs Market: NU42's earnings (5.6% per year) are forecast to grow slower than the German market (13.3% per year).

High Growth Earnings: NU42's earnings are forecast to grow, but not significantly.

Revenue vs Market: NU42's revenue (6.6% per year) is forecast to grow faster than the German market (5% per year).

High Growth Revenue: NU42's revenue (6.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if NU42's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Ribbon Communications performed over the past 5 years?

-12.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NU42 has a large one-off gain of $35.8M impacting its September 30 2019 financial results.

Growing Profit Margin: NU42 became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: NU42 has become profitable over the past 5 years, growing earnings by -12.4% per year.

Accelerating Growth: NU42 has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: NU42 has become profitable in the last year, making it difficult to compare its past year earnings growth to the Communications industry (49.1%).


Return on Equity

High ROE: NU42's Return on Equity (2.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Ribbon Communications's financial position?


Financial Position Analysis

Short Term Liabilities: NU42's short term assets ($247.3M) exceed its short term liabilities ($205.3M).

Long Term Liabilities: NU42's short term assets ($247.3M) exceed its long term liabilities ($120.8M).


Debt to Equity History and Analysis

Debt Level: NU42's debt to equity ratio (13.2%) is considered satisfactory.

Reducing Debt: NU42's debt to equity ratio has increased from 0.8% to 13.2% over the past 5 years.


Balance Sheet

Inventory Level: NU42 has a low level of unsold assets or inventory.

Debt Coverage by Assets: NU42's debt is covered by short term assets (assets are 3x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: NU42 is profitable, therefore cash runway is not a concern.

Forecast Cash Runway: NU42 is profitable, therefore cash runway is not a concern.


Next Steps

Dividend

What is Ribbon Communications's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate NU42's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate NU42's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if NU42's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if NU42's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of NU42's dividend in 3 years as they are not forecast to pay a notable one for the German market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.2yrs

Average management tenure


CEO

Steven Bruny (60yo)

0.3yrs

Tenure

US$1,403,695

Compensation

Mr. Steven M. Bruny serves as Interim Co-President and Chief Executive Officer at Ribbon Communications Inc. since November 14, 2019. He has been Executive Vice President of Global Sales & Services at Ribb ...


CEO Compensation Analysis

Compensation vs Market: Steven's total compensation ($USD1.40M) is above average for companies of similar size in the German market ($USD792.94K).

Compensation vs Earnings: Insufficient data to compare Steven's compensation with company performance.


Leadership Team

NamePositionTenureCompensationOwnership
Steven Bruny
Interim Co-President & Co-CEO0.3yrsUS$1.40m0.10% $336.2k
Daryl Raiford
Executive VP & CFO2.3yrsUS$1.05m0.17% $577.2k
Anthony Scarfo
Executive Vice President of Products2.1yrsUS$1.58m0.065% $216.9k
Kevin Riley
Interim Co-President & Co-CEO0.3yrsUS$1.70m0.18% $586.6k
Eric Marmurek
Senior VP & Chief Accounting Officer2.3yrsno data0.028% $93.2k
Sara Leggat
Head of Investor Relations0yrsno datano data
Justin Ferguson
Executive VP1.8yrsno data0.065% $215.5k
Patrick Joggerst
Chief Marketing Officer & Executive VP of Business Development2.3yrsno data0.083% $277.3k
Petrena Ferguson
Senior Vice President of Human Resources0yrsno datano data
John McCready
Executive VP & Chief Strategy Officer2.3yrsno data0.085% $284.1k

2.2yrs

Average Tenure

55.5yo

Average Age

Experienced Management: NU42's management team is considered experienced (2.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Bruns Grayson
Independent Director2.3yrsUS$210.00k0.14% $466.8k
Beatriz Infante
Independent Director10.1yrsUS$205.00k0.11% $366.4k
Scott Schubert
Independent Director11yrsUS$230.00k0.11% $351.6k
Kent Mathy
Independent Director2.3yrsUS$195.00k0.068% $226.0k
Richard Lynch
Independent Chairman3.7yrsUS$285.00k0.11% $355.7k
Kim Fennebresque
Independent Director2.3yrsUS$222.00k0.049% $163.8k
Richard Smith
Director2.3yrsUS$160.00kno data

2.3yrs

Average Tenure

66yo

Average Age

Experienced Board: NU42's board of directors are not considered experienced ( 2.3 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 9.9%.


Top Shareholders

Company Information

Ribbon Communications Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Ribbon Communications Inc.
  • Ticker: NU42
  • Exchange: DB
  • Founded: 1997
  • Industry: Communications Equipment
  • Sector: Tech
  • Market Cap: US$360.261m
  • Listing Market Cap: US$333.817m
  • Shares outstanding: 110.17m
  • Website: https://www.ribboncommunications.com

Number of Employees


Location

  • Ribbon Communications Inc.
  • 4 Technology Park Drive
  • Westford
  • Massachusetts
  • 1886
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
RBBNNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDMay 2000
NU42DB (Deutsche Boerse AG)YesCommon StockDEEURMay 2000

Biography

Ribbon Communications Inc. provides networked solutions in the United States, Europe, the Middle East, Africa, Japan, other Asia Pacific, and internationally. The company offers service provider solutions, such as fixed network transformation, mobile network evolution, secure network interconnects, network functions virtualization, cloud communications, and communications security solutions that enables secure and innovative business and consumer communications services. Its enterprise solutions include unified communications (UC), Nortel private branch exchange evolution, UC security, contact centers, Microsoft Skype for Business, session management, and security and cloud communications solutions that allows enterprises to connect securely to SIP trunks and modernize communications networks. The company also offers solution and business consulting, system integration, deployment, and managed care services; and support services, such as managing software updates, appliance maintenance, appliance spare services and managed spares programs, and emergency assistance during disaster recovery. It serves telecommunications, wireless and cable service providers, and enterprises through direct sales and indirect channels. The company was formerly known as Sonus Networks, Inc. and changed its name to Ribbon Communications Inc. in November 2017. Ribbon Communications Inc. was founded in 1997 and is headquartered in Westford, Massachusetts. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/20 20:48
End of Day Share Price2020/02/20 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.