Ceragon Networks (CRNT) recently reported financial results that showcased significant revenue growth fueled by exceptional performances from India and the Asia-Pacific region. However, revenue from North America decreased due to reduced spending from Tier 1 carriers, despite an increase in bookings. Even with these promising outcomes, shares have declined roughly 30% because of a disappointing forecast for 2025. While the outlook for 2025 seems challenging, management remains optimistic. The stock trades at a discount, suggesting this downturn may offer a potential buy-on-the-dip opportunity for long-term value-oriented investors.
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Expanding Wireless Globally
Ceragon Networks offers wireless transport solutions globally, catering to cellular operators and wireless service providers. Utilizing microwave and millimeter wave radio technology, its solutions support the transfer of telecommunication traffic between base stations, small/distributed cells, and the service provider’s network.
The firm offers a variety of solutions, including IP-20 all-outdoor solutions, IP-20 split-mount, and all-indoor solutions, as well as IP-50 disaggregated solutions that are suitable for various applications, including short-haul, long-haul, fronthaul, small cells, routing, and enterprise access. Additionally, Ceragon provides services like network and radio planning, site surveys, solutions development, installation, network rollout, wireless transport network auditing and optimization, maintenance, and training.
Ceragon serves various sectors, including internet service providers, government, utility and maritime communications broadcasters, defense, oil and gas companies, public safety organizations, business and public institutions, broadcasters, energy utilities, and private communications networks. It distributes products through a variety of channels including direct sales, original equipment manufacturers, resellers, distributors, and system integrators.
Ceragon has recently announced the acquisition of End 2 End Technologies, LLC, a U.S.-based company specializing in systems integration and software development primarily for the Energy and Utilities markets. This expansion adds expertise to Ceragon’s capabilities, particularly in radio frequency communications, industrial applications support, and a unique network management software platform more tailored to private network clients, particularly in the North American market.
Solid Recent Financial Results
Ceragon Networks has recently published financial results for Q4 and FY2024, marking a successful year as it achieved its highest operating profit and revenue levels since 2012. Q4 revenue was $106.9 million, up year-over-year by 18.3%, making it the highest quarterly revenue since Q4 2014. The full-year revenue for 2024 stood at $394.2 million, showing an impressive growth of 13.5% compared to 2023.
The company’s GAAP gross profits for Q4 and the full year were $36.4 million and $136.9 million, respectively. The GAAP operating income also saw a record increase, reaching $9.5 million in Q4 2024 and $38.7 million for the entire year. The net income reported by the company was $3.6 million for the quarter and $24.1 million for the whole year. Non-GAAP earnings per share (EPS) for Q4 were $0.09, which is in line with analyst expectations.
Management has issued an optimistic outlook for 2025, projecting a year of growth with enhanced profitability. The company’s 2025 revenue is expected to range between $390 million and $430 million, with non-GAAP operating margins expected to be at least 10% at the lower end of this revenue range. The company also anticipates improved free cash flow compared to 2024.
Analysts Remain Bullish
The stock has been on an upward trend, climbing roughly 80% over the past three years. It trades near the lower-middle of its 52-week price range of $2.33 – $5.73, with the recent downward spike causing the shares to bearishly trade below major moving averages. Yet, with the P/S ratio at 0.77x, it trades a deep relative discount to peers in the Information Technology sector, where the average P/S ratio sits at 3.28x.
Analysts following the company have been bullish on the stock. For instance, Needham’s Ryan Koontz has reiterated a Buy rating on the stock with a $6.00 price target, noting the company’s recent strong financial performance and a promising outlook for the second half of 2025. Further, he is optimistic about the potential impact of new products scheduled for mid-year release.
Ceragon Networks is rated a Strong Buy overall, based on the recent recommendations of three analysts. The average price target for CRNT stock is $7.00, which represents a potential upside of 91.26% from current levels.
See more CRNT analyst ratings.
CRNT Stock in Review
Ceragon Networks has posted impressive financial results showcasing significant revenue growth, particularly from the markets in India and the Asia-Pacific region. Further, a successful acquisition potentially enhances the company’s services. The stock currently trades at a substantial relative discount, potentially offering an ideal ‘buy low’ opportunity for savvy long-term investors.
