Spirent (SPMYY) AI Stock Analysis

• Market Cap: $1.33B
• Dividend Yield: N/A
• Average Volume (3M): 168.00
• Price to Earnings (P/E): 106.5
• Beta (1Y): 0.23
• Revenue Growth: -21.44%
• EPS Growth: -81.63%
• Country: US
• Employees: 1,526
• Sector: Technology
• Sector Strength: 51
• Industry: Software - Infrastructure
• EPS (TTM): 0.09
• Shares Outstanding: 145,287,340
• 10 Day Avg. Volume: 396
• 30 Day Avg. Volume: 168
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.15
• Price to Cash Flow (P/CF): 23.40
• P/FCF Ratio: 26.20
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

Spirent's stock score reflects its financial challenges with declining revenue and cash flow, despite a strong balance sheet. Technical indicators suggest possible oversold conditions, but a high P/E ratio indicates overvaluation. Lack of earnings call insights adds uncertainty, tempering the overall score.

Spirent Business Overview & Revenue Model

Company Description

Spirent Communications plc provides automated test and assurance solutions for networks, cybersecurity, and positioning in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. The company operates in Lifecycle Service Assurance and Networks & Security segments. The Lifecycle Service Assurance segment provides testing solutions for 5G mobile core networks, and cellular and Wi-Fi devices in the lab, as well as diagnoses, troubleshoots, and resolves issues with production networks and services. The Networks & Security segment develops test methodologies, tools, and services for virtualised networks, cloud, and proactive security validation; and offers Ethernet/IP performance testing solutions, as well as provides navigation satellite system test and simulation solutions while addressing opportunities in the broader positioning, navigation, and timing market. The company was formerly known as Spirent plc and changed its name to Spirent Communications plc in May 2006. Spirent Communications plc was founded in 1936 and is headquartered in Crawley, the United Kingdom.

How the Company Makes Money

Spirent makes money through a diverse revenue model centered around the sale of its testing, measurement, and assurance solutions. The company's key revenue streams include the sale of hardware and software products, professional services, and ongoing support and maintenance contracts. Additionally, Spirent engages in strategic partnerships and collaborations with major telecommunication companies, technology providers, and network operators to ensure its solutions are integral to the development and deployment of new technologies. The company's earnings are heavily influenced by the ongoing demand for advanced network solutions driven by technological innovation and the growing need for reliable and secure communication systems.

Spirent Financial Statement Overview

Summary

Spirent's financial performance reflects a challenging period with declining revenue and profitability. While the company maintains a robust balance sheet with low leverage, its cash flow generation has weakened. The focus should be on improving revenue and profitability while sustaining its strong financial stability.

Income Statement

The company experienced a notable decline in revenue from $607.5M to $474.3M, a decrease of 21.9%. Gross profit margin stands at 72.4%, indicating strong production efficiency despite the drop in revenue. However, the net profit margin decreased to 5.3%, reflecting a decrease in overall profitability. EBIT and EBITDA margins are 3.9% and 9.8% respectively, signaling operational challenges.

Balance Sheet

The company maintains a strong equity position with an equity ratio of 64.4%, indicating financial stability. The debt-to-equity ratio is low at 0.06, suggesting conservative leverage and a healthy balance sheet. Return on equity declined to 6.7%, reflecting decreased profitability.

Cash Flow

Free cash flow decreased from $109.4M to $25.4M, a significant reduction indicating challenges in cash generation. The operating cash flow to net income ratio is 1.27, reflecting adequate cash flow relative to net income. Free cash flow to net income ratio is 1.01, showing a balanced cash generation relative to profits.

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
603.99M	474.30M	607.50M	576.00M	522.40M	503.60M
	Gross Profit
439.72M	343.60M	437.10M	424.70M	383.40M	368.60M
	EBIT
111.54M	18.40M	112.70M	104.20M	95.70M	88.60M
	EBITDA
134.27M	46.30M	139.20M	130.00M	119.20M	115.60M
	Net Income Common Stockholders
94.75M	25.20M	99.90M	89.20M	84.40M	78.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
121.60M	108.10M	209.60M	174.90M	241.40M	183.30M
	Total Assets
512.70M	583.80M	705.30M	691.30M	649.80M	604.70M
	Total Debt
0.00	21.40M	22.10M	29.80M	28.20M	33.00M
	Net Debt
-121.60M	-86.70M	-187.50M	-145.00M	-213.00M	-150.20M
	Total Liabilities
157.40M	208.00M	240.10M	243.80M	207.00M	202.40M
	Stockholders Equity
355.30M	375.80M	465.20M	447.50M	442.80M	402.30M
Cash Flow		Free Cash Flow
99.87M	25.40M	109.40M	92.70M	111.20M	106.40M
	Operating Cash Flow
108.86M	31.90M	117.80M	102.90M	121.20M	119.30M
	Investing Cash Flow
-8.66M	-7.90M	-6.10M	-60.20M	-7.00M	-10.80M
	Financing Cash Flow
-63.72M	-126.90M	-72.40M	-109.20M	-57.10M	-47.50M

Spirent Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 9.31
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SPMYY, the sentiment is Neutral. The current price of 9.31 is below the 20-day moving average (MA) of 9.45, below the 50-day MA of 9.43, and above the 200-day MA of 9.11, indicating a neutral trend. The MACD of 0.08 indicates Negative momentum. The RSI at 71.85 is Negative, neither overbought nor oversold. The STOCH value of 100.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SPMYY.

Spirent Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VRNT	68 Neutral	$986.76M	16.29	6.35%	―	-0.13%	263.78%
ATEN	67 Neutral	$1.18B	23.89	22.81%	1.51%	3.97%	25.83%
RDWR	66 Neutral	$880.20M	149.96	2.01%	―	5.20%	―
TUYA	65 Neutral	$1.33B	237.65	0.51%	3.01%	29.84%	―
SPMYY	58 Neutral	$1.33B	106.52	3.31%	―	-21.44%	-81.63%
Sector *	57 Neutral	$19.95B	9.66	-12.05%	2.76%	5.40%	-24.89%
NTCT	57 Neutral	$1.45B	―	-24.41%	―	-1.55%	-250.10%